To say that energy prices have risen since 2021 is an understatement. This article examines why energy prices have risen and what is happening in the market now.
Why have energy prices gone up?
In 2021, as we began to recover from the global pandemic and workforces returned to business, the demand for gas increased to the newly reopening businesses, and they couldn’t meet the requirements because of supply shortages. The war in Ukraine threatened this supply and drove the gas prices even higher.
Electricity prices then rose in line with gas prices, as even though 40% of our electricity supply comes from renewable sources, this is also made up of gas-generated electricity transmitted across the electricity network.
Are energy prices still rising?
The good news is that we are starting to see energy prices decrease, thanks to the mild winter across the UK and Europe. Also, Liquid Natural Gas is coming to the rescue across Europe and the UK by filling storage facilities worldwide, meaning we no longer have to rely on gas from Russia.
Although energy prices are still higher than pre-pandemic rates, we should see an even greater price fall as spring and summer warm up the country and resources are not used as much as in winter.
Our handy graph on wholesale energy rates shows you the current market wholesale rates.
We advise you to sign up below for our household energy price alert. We will notify you when the comparison tool is up and running – when the energy market eases.
How much are the current household rates?
The current government energy price guarantee has set out the below rates from April 2023 – June 2023 for a typical household. (link to household averages}
|Region||Electricity per kWh (ex VAT)||Gas per kWh (ex VAT)|
|N Wales and Mersey||33.11||9.86|
Is there any support remaining?
Yes, there is still ongoing support for household energy. The support for households is as follows:
The energy price cap
The energy price cap is government protection put in place, calculated by Ofgem. It sets a maximum price that energy companies can charge households per kWh and is regulated by Ofgem, which has put a cap on the amount of profit suppliers can make.
Although Ofgem does not regulate the oil and gas production sector, it can control the amount of profit energy suppliers make, ensuring that household bills remain fair.
The energy price guarantee
The energy price guarantee came into effect in October 2022 as a measure put in place by the government to protect household energy bills.
It sets out to reduce the unit of gas and electricity to ensure that the typical household bill does not exceed £2,500 per year until 3 March 2023 and £3,000 per year until 31 March 2024.
Your bills may vary from this amount, depending on your energy consumption.
For more information on average household energy consumption, see our detailed article.
What can I do to reduce my energy bills?
There are many ways you can save energy on your household bills;
Is there financial support to help pay my energy bills?
If you are struggling to pay your bills, there are several schemes available to help you.
You can speak to your supplier and agree to a payment plan that suits your budget and ensures your supply remains on. You can also ask them about the following:
- A review of your payments and debt repayments
- Payment breaks
- Access to hardship funds
- The government offers a winter fuel payment to those people born before 26/09/1956; this is normally between £250-£600 and includes a ‘pensioners cost of living payment’
- The government also offers a cold weather payment to those on certain benefits. You will get £25 for each 7-day period of cold weather that falls below zero degrees Celsius between 01 November 2023 and 31 March 2024
Source: Government help with energy bills
Can I compare energy prices?
There is still no flexibility to switch to a new supplier or get into a contract with your current supplier; this is because there still needs to be more stability in the market.
It is expected that this will be back up and running later this year, and you’ll be able to compare gas and electricity prices – if you would like us to contact you when it returns, please sign up here, and we will contact you.
You should also consider reading our guide on fixing energy prices until 2024.