Energy Price Cap rise: new gas at Peterhead could lock in higher bills

As the household energy bills rise 10% with the increased price cap, climate campaigners are warning that a proposed new gas power station at Peterhead would lock people in Scotland into higher bills for decades to come.

Energy regulator OFGEM admitted in August that the increasing price cap was “driven by our reliance on a volatile global gas market that is too easily influenced by unforeseen international events and the actions of aggressive states”.

The Scottish Government is considering approving the construction of a second power plant at Peterhead in Aberdeenshire which will burn gas to generate household electricity for the next 25 years.

Campaigners say that making this long-term commitment to gas will trap energy users into paying bills which are inherently “vulnerable” to increasing international gas prices. OFGEM calculates that 82% of the latest cap rise is attributable to prices on the international energy market.

In 2022, the Scottish Government estimated 31% (around 791,000 households) of all households were in fuel poverty.

Friends of the Earth Scotland’s climate campaigner Alex Lee (they/them) said:

“Families across Scotland will rightly be worried about another increase in energy bills due to the international price of gas, so it is staggering that Scottish Government Ministers are considering locking people further into this exploitative system.

“Using expensive gas to generate electricity will leave us all more vulnerable to international price shocks like we have suffered in recent years. The sure-fire way to bring down bills is by using affordable renewable energy to power our lives and a mass programme of home energy efficiency.

“The only beneficiaries from a new power station at Peterhead will be the greedy energy companies who have been lobbying hard for its approval.

“Even if new gas wasn’t such an awful deal for consumers, this project should not go ahead because of the enormous climate pollution it will inevitably bring. Building new fossil fuel infrastructure will take us in entirely the wrong direction, undermines a just transition and keeps power in the hands of companies who have exploited us for too long.”