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Energy bills may rise by £600 a year

Household energy bills could rise by more than £600 a year within six years to help power companies keep the lights on, the consumer group Which? has claimed.

The watchdog has written privately to the Treasury before next week’s Budget to warn of rising costs.

The group predicted that energy companies would need to spend £118 billion on new infrastructure between now and 2020.

This would include building power stations, replacing grids and erecting wind farms as part of a drive to sustain the power supply and cut down on carbon emissions.

Which? believes this cost will inevitably be passed on to consumers, adding the equivalent of £640 a year to household bills.

This would mean that the average bill would reach almost £2,000 a year, even if wholesale costs of gas and electricity remained stable.

In December 2013, the Treasury released estimates of planned infrastructure investments up to 2020 and beyond. As a result Which? has written to the Government demanding action.

The group is campaigning for a market investigation to find out if consumers are paying a fair price for energy.

Richard Lloyd, the executive director of Which?, told Sky News: “I don’t think consumers know that this is heading their way and that the decision has already been made by the government.

“This means one thing, that household bills are set to rise, and to rise for many people very steeply for the foreseeable future.”

The issue of rising energy bills has become a crucial one for political parties.

In the past three years, the Big Six power companies have increased prices by more than a third.

Ed Miliband promised last year to freeze costs to households for two years if Labour wins the next election.

George Osborne, the Chancellor, responded in his Autumn Statement by reducing green levies on power companies to knock £50 off the average bill.