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Older UK homes wasting energy

A gas fire22/1/14

By Verena Vogt

"Old and draughty" homes which waste gas and electricity are to blame for high energy bills in the UK, according to npower.

The company's Energy Explained report states that British gas and electricity unit prices are among the lowest in Europe.

However, consumers spend so much on energy bills "because British houses waste so much energy".

Npower chief executive, Paul Massara, said: "If we can increase the efficiency of the UK's old and draughty housing, we can ensure that annual energy bills are some of the lowest too."

Average household energy bills to rise

In its first Energy Explained report in 2013, npower said it expects average household energy bills to rise by £240 to £1,487 by the end of the decade.

This is mainly because of "unprecedented investment in new infrastructure and the cost of improving energy efficiency in people's homes".

The latest report adds that energy bills in 2020 will be affected by at least 16 different policy and regulatory costs.

Massara also urged households to increase their homes' energy efficiency to help keep the cost of upgrading the nation's energy infrastructure down.

'Trust needs to be restored' in energy industry

He said: "At times during the debate on energy, facts have been in short supply, but we urgently need to dispel some myths to restore trust in the energy industry.

"In total there are over 140 companies involved in the production, generation, trading, delivery and supply of energy in the UK.

"All of whom influence the price we pay as consumers for the energy we all use.

"Suppliers control less than 20 per cent of a bill and I want to shine a light on all the different aspects of energy, particularly to reassure my customers that there is no hidden profit.

"We made a 3.2 per cent margin in our retail business in the first nine months of 2013.

Power stations struggling to recoup their investments

"Over the same period our power stations were struggling to recoup the hundreds of millions of pounds in investment required to build them, and made a loss of £59 million.

"In 2013 we traded energy with around 80 other companies through open market exchanges.

"The actual unit price of energy in the UK is one of the lowest in Europe but bills are high because British houses waste so much energy.

"If we can increase the efficiency of the UK's old and draughty housing, we can ensure that annual energy bills are some of the lowest too."

Npower's 3.1 million customers were told they would face a 10 per cent average bill increase in the latest round of energy price rises late in 2013.

Reduction of government levies

However, the company has since said that the actual price rise will be lower following a reduction of government green levies.

The firm also said that network charges are set to increase from 2015 to 2020, although Ofgem disputes this.

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