Electricity bill for just one month could rise to £500 in January after Russia cuts European stocks

Energy bills could rise to £500 in January after Russia cut gas supplies to Europe.

Wholesale gas prices rose yesterday after Vladimir PutinThe regime halved deliveries to Europe via the Nord Stream 1 pipeline, in what Germany condemned as a ‘double play’.

The move pushed up the price of gas across Europe, with many countries drafting contingency plans to cut gas and electricity consumption by 15 percent to save supplies and protect families through the winter.

These include turning off street lights, not heating public swimming pools and shutting down production at some major manufacturers, although more drastic measures may be needed.

Germany and other European countries are rushing to buy containerized shipments of liquefied natural gas (LNG) from the United States, Africa and the Middle East, but this is pushing up prices and will not be enough to fill the gap left by Russia.

Any increase in the wholesale cost of gas is passed on to electricity as it is used as a fuel in around 40 per cent of the UK’s power stations.

Separately, there are concerns about the UK’s ability to generate enough electricity to keep the lights on this winter, with the gap between maximum supply and maximum demand being called ‘tight’.

The grid operator has indicated that the situation could be particularly difficult in the first half of December.

The current energy price cap is expected to rise from just under the equivalent of £2,000 a year – based on normal use – in October and again in January.

Early estimates put it at around £3,400 in the new year.

However, an analysis by energy industry experts at consultants BFY suggests the new rise in wholesale prices could lead to the equivalent of £3,420 in October and £3,850 in January.

As energy consumption is high in January as people leave central heating and lighting on for longer, the bill for that month alone could rise to £500.

Wholesale gas prices soared Wednesday morning to a record high of 530p per therm for the coming winter.

Moscow has blamed the maintenance problems, but the Nord Stream movement is widely seen as Moscow “arming” gas and deliberately limiting Europe’s supplies in retaliation for Western sanctions.

There are fears that Russia could cut supplies altogether.

Gemma Berwick, senior consultant at BFY, warned that ‘a further decline in flows will lead to a further rise in prices’.

While Britain typically only receives 4 percent of its gas from Russia, it is pipelined to Europe and also relies on securing LNG cargoes, meaning prices in the UK are closely correlated with those on the continent.

Earlier this week, MPs on the business selection committee demanded urgent action to improve the assistance provided to millions facing punitive energy bills this winter.

The government has announced support for households ranging from £400 to up to £1,200, but MPs said this did not take into account the increases coming this winter.

The committee chair, Darren Jones, said: ‘Once again, the energy crisis is hurtling the government.

“To prevent millions from falling into unmanageable debt, it is imperative that the bailout package is updated and implemented before October, when the tightness will become a complete constraint on household finances and push the economy further into recession.”