Electricity prices to soar by 2021, survey predicts

Wholesale electricity prices will rise by at least 40 per cent over the next ten years, according to a survey of leading industry figures.
More than 90 per cent of those questioned in the survey to mark the 10th anniversary of independent generation consolidator SmartestEnergy said they believed prices in 2021 will be higher in real terms than in 2011. Fewer than one in ten respondents said they expected wholesale prices to be the same or lower.

The Power Predictor 2021 survey was carried out among independent generators, energy buyers and brokers.

More than a third (35 per cent) of those questioned said they believed wholesale prices will be between £70-£79.99/MWh. A further 29 per cent  predicted prices will hit at least £80/MWh, more than 60 per cent higher than currently. Only 8.4% per cent believed prices will be the same or lower than today.

The average price predicted was just over £70/MWh compared to the £49/MWh average seen over the past year – an increase of 43 per cent.

“While it is impossible to forecast with any certainty what will happen over the next decade, it is clear from our survey that many in the industry are bracing themselves for significant increases,” said Robert Groves, chief executive of SmartestEnergy which is the UK’s leading purchaser and supplier of electricity from the independent sector.

“Wholesale prices have already more than doubled since SmartestEnergy was founded in 2001 and a continued upward trend presents major challenges as well as exciting opportunities for the energy entrepreneurs we work with.”

Environmental campaigner Jonathon Porritt, keynote speaker at a reception staged at the Swan at the Globe in London to mark SmartestEnergy’s anniversary, predicted the next decade would see “astonishing changes” in the way energy is generated, stored, distributed and consumed.

“Right now we are only in the foothills of what is going to happen in terms of innovation over the next decade. It won’t be a slow, incremental, unfolding process but a revolution,” said Porritt, the former director of Friends of the Earth who went on to co-found Forum for the Future, the UK’s leading sustainable development charity.

He made a number of predictions about how the energy sector will develop by 2021 including grid parity for solar PV being achieved within five years time and the rapid development of carbon capture and storage projects.