ENERGY firm npower has claimed household gas and electricity bills are so high because the country's "old and draughty" houses waste so much gas and electricity.

Chief executive Paul Massara said the actual unit prices of gas and electricity in the UK are among the lowest in Europe, but bills are high "because British houses waste so much energy".

Mr Massara said in a report explaining energy bills: "If we can increase the efficiency of the UK's old and draughty housing, we can ensure that annual energy bills are some of the lowest too."

Loading article content

He warned that the cost of upgrading the nation's energy infrastructure is set to increase bills unless households can take action.

The document claims that at least 16 policy and regulatory costs will have a direct impact on energy bills by 2020.

Npower announced a 10% average bill increase in the latest price rises late last year, affecting about 3.1 million customers, but has said that it will reduce bills as a result of a shake-up of Government green levies.

Mr Massara said: "Suppliers control less than 20% of a bill and I want to shine a light on all the different aspects of energy, particularly to reassure my customers that there is no hidden profit. We made a 3.2% margin in our retail business in the first nine months of 2013. Over the same period our power stations were struggling to recoup the hundreds of millions of pounds in investment required to build them, and made a loss of £59 million.

"In 2013 we traded energy with around 80 other companies through open-market exchanges. The actual unit price of energy in the UK is one of the lowest in Europe, but bills are high because British houses waste so much energy."

Npower last year said average household bills would rise by £240 to £1487 by 2020 mainly because of new infrastructure costs. It also claimed that network charges will rise from 2015 to 2020.

However, Ofgem said it sets the network charges and they are set to remain flat. Its spokesman said: "Their data on network costs is incorrect and misleading."