Energy giant EDF says domestic gas and electricity bills in 2030 could be 13 per cent higher than those at the end of 2025, before the Iran war.
Bills are already set to increase today when the new Ofgem price cap is announced.
This expected rise will be driven by the cost of gas, which has soared because of the Middle East conflict.
It then emerged last night that household electricity bills could skyrocket by more than £260 over the next decade because of mounting Net Zero costs, according to major consulting firm Boston Consulting Group.
High prices are forcing electricity consumption down, making renewable subsidies and grid upgrades an increasing proportion of power bills, BCG says.
If demand keeps falling, the average household electricity bill will rise by £264 by 2030 to a staggering £1,145 thanks to a spike in net zero spending, the firm says.
Raoul Ruparel, from BCG, said: “There is a focus on the destination – how we will generate energy in the future – but that is less relevant if the path to get there is too costly.
“Britain isn’t an outlier because our system is more expensive: it’s largely because of how we’ve chosen to pay for it.”
EDF analysts earlier said that even if gas prices fall in the future, Britons’ bills will rise by nearly £130 by the end of the decade.
This is because of network and policy costs, which include green levies and charges to upgrade the electricity grid.
“Rising network and policy costs are one of the big challenges to delivering reductions in future electricity bills,” the report warns.
Labour had surged to power on a manifesto pledge of slashing energy bills by £300
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The study was written by head of policy and regulation, Dan Alchin, and Matt Levenston, head of energy system analysis.
Prime Minister Andy Burnham has announced a temporary cut of VAT on electricity bills from October.
The Government has also moved three quarters of the renewables obligation – a subsidy for older renewable generators – into general taxation. This is funded until 2029.
These measures have had a “notable impact on short term costs”, the authors write.
Extending the measures would see a £90 cut in 2030 bills, reducing them from £1,790 to £1,700.
But more clarity was needed on Government intentions with these discounts, they say.
EDF analysts earlier said that even if gas prices fall in the future, Britons’ bills will rise by nearly £130 by the end of the decade
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They call for greater transparency on overall future energy costs. This could give consumers more confidence to electrify, a move the Government believes is key to bringing down bills in the long term.
“Transparency and certainty matter”, their report says. “Households and businesses need confidence about the costs they are likely to face in the years ahead if they are to make informed decisions about their energy costs, let alone invest in heat pumps, EVs and other electrification technologies.”
Last week, EDF called for more information on transmission costs, which go towards connecting new, largely renewable, generators to an expanded grid.
It said it “strongly supports transmission investment where there is a well-evidenced benefit to consumers”.
But it added: “It is impossible for any individual or company to make a proper assessment based on the limited amount of information available.”
Mr Alchin and Mr Levenston say this issue needs to be tackled, and justification given for the billions in proposed expenditure.
“Given the pressures on customers, we have a responsibility to ensure investment is efficient and does not place unneccesary burden on today’s customers,” they say.
Energy bills could skyrocket by £130, according to EDF – or double that, according to BCG
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They also call for more support for those struggling with energy debt.
They conclude: “While recent Government interventions have had material impact in the short term, the 2030 outlook is largely unchanged. This should not be surprising. As we said last year, there is no silver bullet for lower energy prices.
“If the new Government is serious about tackling energy costs, greater transparency about where bills are heading and why investment is needed is the first step.
“Faster electrification remains the UK’s most credible long-term route to more affordable bills. In the meantime, we must do more to support those most in need.”
A Government spokesman said: “Tackling the cost of living is a key priority for this government and we know families will be worried by the prospect of higher energy bills this winter.
“We’re acting to give consumers breathing space with the cost of living – cutting VAT on electricity bills, ensuring around six million households get the £150 Warm Home Discount this winter, and making millions of homes cheaper to run through our Warm Homes Plan.
“Alongside our efforts to support rapid de-escalation in the Middle East, we will do everything we can to shield consumers from global energy shocks and bring down bills for good.”