From October 1, UK households will face an increase in energy bills, with the price cap rise adding £144 annually to customers’ costs.
UK Energy Bills Set to Rise by £144 Annually as Price Cap Increases
By Arezki AMIRI
Published on 26 September 2024 17:03
Customers of major UK energy providers like British Gas, OVO, EDF, EON, and Octopus should prepare for an additional £144 per year on their energy bills. This amounts to an extra £12 each month, beginning on October 1, when the energy price cap is set to increase.
Why Are Energy Prices Going Up?
The price hike is a direct result of rising wholesale gas prices, which have pushed up costs for energy companies. Ofgem, the UK’s energy regulator, announced the price cap change during its quarterly review on August 23. The new cap will affect customers across England, Scotland, and Wales who are on standard variable or default tariffs.
This increase will influence most households, whether they pay by direct debit or through a prepayment meter. However, those on fixed-rate tariffs will not see a change in their rates.
What the Price Cap Means for You
The actual annual cost for each household will vary depending on energy consumption. According to Birmingham Live, the average bill is estimated at £1,717 per year. If a household uses more than this, their bills will increase further.
The cap controls the cost per unit of energy, rather than the total bill amount. From October 1, the following rates will apply:
- Electricity: 24.5p per kWh (up from 22.36p)
- Gas: 6.24p per kWh (up from 5.48p)
- Electric standing charge: 60.99p per day (up from 60.12p)
- Gas standing charge: 31.66p per day (up from 31.41p)
Calls for Reform in the Energy Sector
The rise in energy costs has prompted calls for changes to the UK’s energy system. Juliet Phillips of E3G, a climate-focused think tank, emphasized the upcoming budget on October 30 as a chance to address the “broken energy system.” She advocates for specific measures to help low-income households struggling with these rising costs.
Phillips also stressed the importance of transitioning away from gas in favour of renewable energy and low-carbon energy storage solutions.
Energy Secretary Ed Miliband echoed this sentiment, attributing the rising price cap to past energy policies that have left the UK vulnerable to fluctuations in international gas markets. He emphasized the government's commitment to clean, home-grown energy as the solution to reducing bills and gaining energy independence.