It’s the closing weeks of what has been a dreary excuse for summer, an unfortunately apt setting for the latest news on rising household energy prices heading into autumn.

The next quarterly price cap announcement by industry regulator Ofgem is expected to be announced on Friday and will cover what energy suppliers can charge from the beginning of October through to the end of this year. After two consecutive reductions in the maximum charges allowed, some might have hoped that the UK was on a steady path back to pre-crisis prices but that is not the case.

Analysts at Cornwall Insight – which is widely regarded for the accuracy of its predictions – have issued their final forecast for the October to December period and are expecting a 9% increase to £1,714 in the annual bill for homes using a typical amount of gas and electricity. That would be an increase of £146 per year from the current annual bill, which is sitting at it lowest for two years.

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That means that bills will still be roughly 65% higher than prior to the Russian invasion of Ukraine in February 2022, which is firm confirmation that the UK’s energy crisis is far from over.

While prices have stabilised somewhat compared to the last two years, markets remain highly sensitive to any global events that could disrupt supplies. The UK’s heavy reliance on imported energy leaves it vulnerable to the global volatility that has pushed up the wholesale cost of gas, which is paid by domestic suppliers, by roughly 20% in the last few months.

What’s worse, Cornwall Insight is expecting a further “modest” rise when the price cap for the first quarter of 2025 is announced in November. But this could be optimistic, as recent tensions in the Russia-Ukraine war could see prices rise more sharply at the start of the new year.

Craig Lowrey, principal consultant at Cornwall Insight, said he doesn’t expect a return to the extreme prices of recent years but it is also unlikely that household bills will fall to what was once considered “normal”. Without “significant intervention”, this “may well be the new normal”.

“The government will need to adopt a two-pronged approach to tackle rising energy bills,” Mr Lowrey added. “Immediate action is needed to ease the financial burden on households – such as the introduction of social tariffs, or reform of the price cap – but that’s only part of the solution.

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“We must also develop a long-term strategy to secure our energy future. This means a fundamental overhaul of our energy system, with a strong emphasis on increasing domestic energy production.”

On this latter point, the new-ish Labour government has invested significant political capital in plans to establish Great British Energy, a publicly-owned investment vehicle to help build low-carbon infrastructure. GB Energy won’t supply electricity directly to households, but instead will co-invest with the private sector in emerging energy technologies such as windfarms, green hydrogen, solar power and nuclear energy.

Another part of its remit is to create a “just transition” away from oil and gas into green energy which is to include the creation of a “huge number” of skilled jobs in Scotland, according to Prime Minister Kier Starmer. This is no doubt the reason why GB Energy will be headquartered in Scotland as a means of soothing the loss of the traditional offshore energy sector.

There’s a lot riding on this, and on the face of it GB Energy appears to have significant financial backing with a budget of £8.3 billion of public money over the course of this parliament. However, it is questionable whether even this large chunk of money will be enough to unlock the £60 billion in private sector investment that is being targeted.

Even if it does succeed on this front it’s difficult to see GB Energy as anything other than a minority co-investor, rather than a serious rival to the private sector. As the Common Wealth thinktank has pointed out, a lack of well-funded state intervention would result in the current market model of “uncoordinated [investment], replete with barriers and delays and vulnerable to policy errors”.

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Ed Miliband, the Secretary of State for Energy Security, has the lead on the GB Energy project and it will be his task to avoid these pitfalls while also lowering household bills by an average of £300 per year. Given the volatility in the market, and with a price cap that changes accordingly every three months, it will be interesting to see how that target is measured and judged.

Secure and affordable energy is of grave importance to long-term prosperity, so hopefully GB Energy will ultimately deliver. However, none of the activities in these early days of its inception will assist the millions of households struggling to stay warm in the coming winter.

The entire market is in need of reform – not just the source of our energy, but how it is distributed and paid for. The vulnerable still require protection in the short term from rising energy bills, which is why Ofgem is currently in the midst of a comprehensive review of the price cap and eying up potential changes to elements such as standing charges that weigh unfairly on those doing all they can to cut their consumption.

It has been said before and it remains true that the price cap, first introduced in January 2019, has evolved far beyond its intended purpose to act as a de facto regulated market price that is driving inflation by discouraging competition among retail energy suppliers. Cornwall Insight noted that the average annual saving from the top 10 cheapest tariffs on the market in August was a mere £5 when compared to the default tariff set by the price cap.

As Mr Lowrey points out, simply waiting for prices to drop on their own isn’t an option. A proactive approach taking coordinated account of current and future needs, and all aspects of the dysfunctional energy market, is imperative.