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What's happening in the energy market?

What's happening in the energy market?

Our energy specialists look at what's happening in the energy market.

2 November

Forecasts by the independent consultancy Cornwall Insight predict that the price cap for a typical dual fuel household could be approximately £1,923 per year from January 2024. Latest predictions have risen between 5-6% since September 2023 in response to the growing volatility in the global wholesale energy market.  Disruptions to the Finnish Balticconnector, the Israel-Hamas conflict and industrial action at gas production facilities in Australia means that the price cap is likely to remain above the current level at least until the end of 2024.

1 October

The energy regulator Ofgem has changed their definition of ‘average energy use’ to better reflect current trends in energy usage. Ofgem’s old definition of average energy use, known as the Typical Domestic Consumption Values (TDCV), were used when they made their announcement of the October price cap (25 Aug). That figure for the price cap was £1,923 for October-December 2023 but under their new TDCV the figure would be £1,834 for the same period. Learn more about Ofgem’s average electricity and gas usage and how they will use it in the future.

29 September

The latest analysis from Cornwall Insight predicts that the price cap for a typical, dual-fuel, Direct Debit, household could rise by around 3.5% in January 2024. From 1 October Ofgem’s price cap will be £1,923. But from January consultancy firm Cornwall Insight predicts that average annual bills could increase to £1,996.

28 September

The National Grid’s electricity system operator (ESO) has published their winter outlook for 2023/24. The ESO said that Britain was in a stronger position heading into the coldest months than it was a year ago when Russia’s invasion of Ukraine. The risk of blackouts in Great Britain will be lower this winter thanks to higher gas storage levels in Europe and more nuclear power imported from France.

20 September

The government has set out changes to its green commitments. Prime Minister Rishi Sunak said he would delay a ban on the sale of new petrol and diesel cars along with other changes to grants for heat pumps and exemptions on fossil fuel boilers. However, the prime minister insisted that he was committed to reaching net zero carbon emissions by 2050. A taskforce to speed up home insulation and boiler upgrades has also been disbanded, according to BBC News.

5 September The UK government has eased an effective ban on new on-shore wind farms making it easier for them to be built. The changes involve broadening ways wind farm sites can be identified and speeding up the planning process. 25 August The energy regulator Ofgem announces that the price cap will fall to £1,923 from 1 October for the annual bill of a typical household. This is a further fall since the July price cap which means that unit prices continue to remain below the government’s Energy Price Guarantee. 31 July The prime minister has announced support for a carbon capture project in Scotland. Rishi Sunak also confirmed the granting of 100 new North Sea oil and gas licences. The UK government said the plans would help it grow the economy, meet its 2050 net zero commitment and strengthen the UK's wider energy security strategy. But opponents say the Conservatives are "doubling down" on fossil fuels. 27 July The latest analysis from Cornwall Insight predicts that the price cap for an average typical household could be approximately £1,860 between 1 Oct to Dec 2023. Ofgem’s price cap is currently £2,074 and runs to 30 Sept. Following this initial dip, the cap is projected, by Cornwall Insight, to rise to around £1,960 in Jan 2024, before experiencing small decreases in March and July. 1 July Ofgem's price cap changes to £2,074 for the annual bill of a typical household. The government's Energy Price Guarantee increases to £3,000 until 31 March 2024 but with the price cap below that threshold, unit prices will be determined by Ofgem's price cap. 29 June The latest analysis from Cornwall Insight predicts that the price cap for an average typical household could be approximately £1,871 between 1 Oct to Dec 2023. Ofgem’s price cap of £2,074 starts on 1 July and runs to 30 Sept. 25 May The energy regulator Ofgem announces that the price cap will fall to £2,074 from 1 July for the annual bill of the typical household. From July the price cap will determine the unit prices for energy as the amount will be below the government’s Energy Price Guarantee. 18 April The energy regulator Ofgem has said that all energy suppliers in England, Scotland and Wales have signed up to a code of conduct that sets out the practices they should adhere to when fitting prepayment meters, which the regulator plans to make mandatory. Customers must be given more chances to clear debts and forced meter installations will be banned in homes of those over 85 or anyone with a terminal illness, regulator Ofgem said. Those with health conditions such as chronic bronchitis, emphysema and sickle cell disease, which could be worsened by living in a cold home, will also be exempt. 30 March The government has published a new net zero plan after the High Court ruled the government's existing plans were not sufficient to meet its climate targets. The government was forced to publish the "Powering up Britain" strategy after the High Court ruled, in July 2022, that the government’s current plan was not detailed enough to show how the UK would meet its goal to reduce its greenhouse gas emissions to net zero by 2050. 27 February The energy regulator Ofgem has announced that the price cap will decrease to £3,280 from 1 April 2023. Ofgem’s announcement will not affect what customers pay for each unit of electricity or gas because that is limited by the government’s Energy Price Guarantee. 24 February The government's EBSS Alternative Funding £400 online portal, for people who live 'off grid', opens. People who live in a park home, houseboat or off the electricity grid should apply through the government's online portal or by phone (0808 175 3287 Mon-Fri 8am-6pm). 7 February In a government restructuring the Prime Minister has broken up the Department for Business, Energy and Industrial Strategy (BEIS) to create a new Department for Energy Security and Net Zero (ESNZ). The government says that the new Department for Energy Security and Net Zero will be led by Grant Shapps MP. 23/24 January The National Grid activated its Demand Flexibility Service (DFS) which pays eligible smart meter users to reduce their energy consumption during peak time events. Eligible E.ON Next customers, who've so far taken part in test DFS events, have saved the equivalent energy of 184 years worth of powering a 50w TV. Over £240k has been paid to E.ON Next customers who saved energy and met their reduction targets, since Nov 2022. 9 January The government announced that their Energy Bill Relief Scheme (EBRS) will change from 1 April 2023. The current scheme provides a cap on wholesale gas and electricity prices for all non-domestic customers. Under the new Energy Bills Discount Scheme (EBDS), firms will get a discount on wholesale prices rather than costs being capped as under the current one. Heavy energy-using sectors, will get a larger discount than others. The new scheme runs until 31 March 2024.

Published 30/06/2023
Edited 01/11/2023