According to consultancy firm Cornwall Insight, UK households could see their annual energy bills decline by £268, as predicted for April. It is expected to result from a significant decrease in wholesale energy prices that will influence the official price cap set by the UK’s energy regulator Ofgem, possibly dropping bills to £1,660. Currently, millions of homes in England, Wales and Scotland will see their bills rising in January when the next price cap comes into effect, setting the typical dual-fuel annual household bill from £1,834 to £1,928, meaning an additional £94.
Analysts at Cornwall suggested a fall in prices may continue throughout the year, potentially seeing energy bills fall to £1,590 by July, before a slight increase to £1,640 from October. The relatively mild winter and European gas storage levels above expectations for the rest of winter combined with the Israel-Hamas conflict, strikes at a liquified natural gas plant in Australia, and disruption at a gas pipeline in Finland are reasons behind this projected downward path, as they have yet to significantly impact energy supplies, leading to lower wholesale prices.
Dr Craig Lowrey, the principal consultant at Cornwall, pointed out that the energy market is volatile and there is no guarantee that the price cap will remain. There are ongoing consultations to determine the potential impact of changes, including the standing charge and bad debt collection, on the overall price cap level. Ultimately, waiting and hoping to avoid another global incident that spikes energy prices is unsustainable for the government.
The energy watchdog, Ofgem, sets a maximum price that suppliers can charge customers per unit of gas and electricity and affects 29 million households in England, Wales and Scotland. However, customers may still pay substantially higher bills, depending on their energy consumption. To prevent people from having to pay higher bills, the government introduced a £400 discount for each household, which has since ended
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