Energy bills are set to rise for millions of households this winter as the UK energy regulator Ofgem has announced an increase in the energy price cap. The cap will be hiked by 10%, rising from £1,568 to £1,717 for a typical household. This change will come into effect from October 1 and will be in place until December 1.
The decision means that many households will face higher bills during the colder months compared to earlier this year when the price cap was reduced. On average, households paying for gas and electricity by direct debit will see their annual bills go up by £149, equating to around £12 more per month. Ofgem cited increased prices in the global energy market, attributed to heightened political tensions and extreme weather events, as the primary reason for the price cap adjustment.
It’s important to note that the price cap doesn’t limit the total energy bill but rather restricts the amount households pay per kilowatt hour. Despite the rise, average energy bills are still lower than at the peak of the energy crisis sparked by Russia’s invasion of Ukraine in February 2022.
In response to the news, Ofgem’s chief executive, Jonathan Brearley, acknowledged the difficulty this price hike poses for many households. He advised anyone struggling to pay their bill to ensure they are accessing all entitled benefits, such as pension credit, and encouraged reaching out to energy companies for further assistance. Brearley also recommended consumers explore fixed-rate tariffs that could potentially save them money.
Secretary of State for Energy Security and Net Zero, Ed Miliband, expressed concern over the price cap rise, attributing it to what he described as a failed energy policy that has made the country dependent on volatile international gas markets. Miliband highlighted the government’s commitment to clean, domestically sourced energy as a long-term solution to reducing bills and enhancing energy independence.
He outlined plans to reform the regulator to prioritise consumer interests, work towards fairer standing charges, and implement a comprehensive Warm Homes Plan aimed at saving families money. Miliband also emphasised ongoing efforts to promote renewable energy sources such as solar power and onshore wind.
The increase in the energy price cap underscores the ongoing challenge facing households in managing their energy costs amidst a backdrop of external factors influencing the energy market.
By Ellie Gosley, WalesOnline.