Proactive Investors - British Gas boss Chris O'Shea has warned that the worst still may be in store for UK households as energy bills look set for another winter of highs.
Speaking to Bloomberg, O’Shea said that debt from consumers missing payments could well climb this winter as the colder months approach.
"We are seeing direct debits being cancelled,” he said. “We are seeing people struggling.”
According to Ofgem, collective debt among energy suppliers hit £2.6 billion over the summer as sustained high prices squeezed consumers.
This is despite a fall in Ofgem’s price cap, which determines how much suppliers can charge, from the highs of last winter.
Ofgem has proposed an emergency clause be added to the price cap to allow companies to charge around £17 more per household annually to offset this rising debt.
Commenting on the proposal, O’Shea said that Ofgem had landed itself in a “difficult situation”.
“But, they’ve created this market,” he continued. “If everybody is losing money in the market, the market will collapse.”
However, O’Shea urged the regulator to do more to encourage domestic production to ensure a longer-term solution.
In a separate report, he called for reform of the UK’s project approval process, arguing that by ruling out unviable power developments, grid connections could be sped up.
Dubbing these “phantom” projects, he pointed to developments that were higher up the UK’s first-come-first-served type grid connection process that had run out of money or failed to secure land rights.
“It defies belief that the queue for new, green energy connections is blocked by phantom power projects,” O’Shea said.
“Not only do these developers not have the money to develop, but many also don’t even have planning permission or land rights.”
“They’re gambling that holding a space in the queue will make them rich."
According to British Gas owner Centrica PLC (LON:CNA), some 62GW of the 114GW of projects due to be connected to the grid by 2029 are at risk of missing milestones.
Rule changes by Ofgem, due to be decided on next month, to allow National Grid PLC (LON:NG) to remove projects from the queue could see some 12GW added in the short term, the firm added.