Every three months the UK energy regulator, Ofgem, reviews and sets a level on how much an energy supplier can charge for each unit of energy.
The most recent price cap change, from July 1st, saw the price of energy for the typical household going down to £1,568 per year, £122 per year lower than the previous price cap.
The price of energy is increasingly volatile, particularly natural gas, which trades on a global market and arrives in the UK via a complex and interconnected system, relying on a combination of pipelines and Liquid Natural Gas shipments.
Wholesale energy price influences include supply and demand dynamics, global energy markets, geopolitical events, and weather conditions, all of which make price cap changes impossible to control or predict.
To ensure long-term energy security and stability, it is crucial to phase out dependence on fossil fuels and invest in renewable energy sources. This shift will not only provide more consistent energy prices but also increase the resilience of our energy supply against increasing global market fluctuations and geopolitical tensions.
It’s equally difficult to know whether or when to choose a fixed price tariff, therefore 85% of UK households are currently on a standard variable tariff, and every price cap change directly impacts their pocket, (for good or bad).
Take back (a little) control…
It’s important to remember that whatever tariff you’re on, fixed or variable, the more energy you consume, the more you pay. Therefore, it’s useful to be able to monitor and keep track of your energy usage.
Taking regular meter reading can help you do this, and smart meters do that automatically, every 30 minutes, giving you real-time data which you act upon.
After the price cap falls, as it did this time, it’s a good idea to give a meter reading to your supplier as soon as possible, to avoid being charged more than you should.
This is also important when the price cap rises, as it can avoid disputes over what you used before and after prices changed.
Once again, if you have a working smart meter, you don’t need to do anything as it will all happen automatically.
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