SSE Energy Prices May Not Rise Next Year Says Boss
Times are still tough in the energy markets but the boss of Scottish & Southern Energy (SSE) said prices may not have to go up next year.
Ian Marchant, the chief executive of SSE, said the wholesale gas price had stabilised and therefore pressure on retail prices had eased giving consumers hope that future price rises won’t be as sharp as recent increases.
Both domestic and business gas prices and electricity prices have increased over the last six months with most of the Big Six energy providers blaming rising wholesale gas prices as the reason for these increases.
Mr Marchant said that half year profits for the company were down by 25% and that SSE actually made a loss on household energy until it increased prices in September because of the high cost of gas. Consumers also cut back on their energy consumption and as a result SSE had a 4% fall in demand for electricity and a 16% fall in gas demand.
The exceptionally mild weather over the last few months has reduced pressure on the wholesale gas markets and helped consumers as they’ve been able to delay putting their heating on. Not only are homes and businesses delaying switching on their heating but buildings are becoming more energy efficient so they use less gas and electricity in the first place.
SSE has told its customers that there won’t be another price increase before August 2012 and may not go up at all next year. Ian Marchant said “Wholesale prices of gas are up a lot and we lost money. It is not a great place to be but we are where we are. It has levelled off and the mild weather has eased the situation, so the pressure on retail prices is significantly less than for this year. The good news is that prices may not have to go up next year”.
The Chairman of SSE, Lord Smith of Kelvin said the volatility of the energy markets and the uncertainty within the economy has resulted in tough times for the energy industry.
He said “SSE’s half-year results reflect the impact of a number of these issues, especially the high wholesale cost of gas which eventually necessitated the increase in household prices that unfortunately had to be made in September”.