With energy prices remaining a key concern for many households, EDF’s decision to slash annual standing charges by £100 aims to provide additional relief. The company’s tracker tariff, Simply Tracker Extra Jun27, allows customers to benefit from savings of £50 per fuel on standing charges, regardless of how much energy they consume. The offer is expected to appeal especially to low-usage households, who often find themselves excluded from benefits tied to consumption-based savings.
What is the Energy Price Cap and Why Does It Matter?
The energy price cap, regulated by Ofgem, determines the maximum amount that energy suppliers can charge customers on standard variable tariffs. It sets limits on unit rates for electricity and gas, as well as daily standing charges, which cover the infrastructure costs of supplying energy to homes. According to Ofgem, the latest reduction of 7% in the cap reflects a decrease in wholesale gas prices and the government’s decision to remove certain levies from bills.
The typical £1,641 annual bill represents the cost for a “typical” household using an average amount of gas and electricity. For customers using more energy, the cost will be higher, while those who use less will pay less. This price cap aims to protect consumers from excessive charges while ensuring suppliers remain viable in a volatile energy market.
EDF’s new offering directly addresses the concerns many have about rising energy costs. The company is positioning itself as a more affordable option compared to the price cap, focusing specifically on lowering standing charges. By cutting standing charges by £100 for dual-fuel customers, EDF ensures all eligible customers can save the same £101 regardless of their energy usage. This makes it easier for those already looking to reduce their consumption, as well as those who may not have been able to take advantage of savings based on unit rates alone.
EDF’s Strategy to Beat the Price Cap
EDF’s Simply Tracker Extra Jun27 tariff offers a fixed-term tracker deal that guarantees customers will always save £100 against the price cap, regardless of future changes. The company’s Managing Director of Customers, Philippe Commaret, explained that the goal is to offer savings beyond Ofgem’s adjustments. He noted that with 57% of customers still on standard variable tariffs, EDF’s new initiative encourages customers to opt for fixed or tracker tariffs to start saving right away.
What sets EDF’s offer apart is its emphasis on standing charges, rather than unit rates. Many other energy suppliers focus on reducing unit rates, which benefits customers who use more energy. EDF, however, has chosen a different approach, which could prove more attractive for low-usage households. By applying the £50 discount per fuel directly to standing charges, the company ensures that customers with low consumption are not left behind.
This approach also ensures that customers who are making an effort to reduce their carbon footprint and energy consumption will still benefit equally from the savings. According to EDF, this will appeal to households already working to improve energy efficiency, as it ensures all customers, regardless of usage, benefit from equal savings.
While energy prices continue to fluctuate and the government’s energy price cap adjusts accordingly, EDF’s strategy reflects the ongoing competition in the energy market. Suppliers are now vying for market share by offering competitive fixed and tracker tariffs to customers who are looking for predictable pricing.
