The energy price cap is determined by the energy industry regulator, Ofgem and the cap sets a maximum price that energy suppliers can charge customers for each kilowatt hour (kWh) of energy that they use.
After a 54% increase to the energy price cap in April 2022, the Energy Price Guarantee (EPG) was enforced .
This was a great reduction from the energy price cap level of £3,280 set by Ofgem.
What caused the Energy Crisis?
Our energy bills have been increasing due to supply and demand issues pushing up wholesale energy prices. This is the amount that your provider pays to the energy generators for gas and electricity. It is the rise in these wholesale costs that are the main driver in the energy price spikes. So, what has caused the wholesale prices to rise?
Peruvian imports have also more than doubled.
Sellindge. This is the European link combining the technical expertise of both the British National Grid and the French RTE. The site is still not running at full capacity, and is aiming to reach this goal by October 2023.
Why are Energy Bills still so high?
Our bills are dependent on the wholesale prices of energy, which are now decreasing. Network cost, which makes up 25.35% of our energy bills, pays for fitting and running gas pipes and electricity cables. It also covers the cost of energy firms that have failed. Our energy bills are therefore entirely dependent on the price of imports. As a result, most companies “hedge”.
Will Energy Bills stay down?
Market analysts do predict that energy prices will continue to decrease from 2023 into 2024. This may spark competition within the industry, pushing prices down further.
Sophie Ben-Tovim
8/08/2023
