this post was submitted on 01 Jan 2024
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A £94 increase to the average annual household energy bill has come into effect after the regulator upped its price cap in response to a rise in global gas market prices.

The change, taking effect from 1 January, means average households are beginning 2024 with a 5% increase in energy bills – at the start of what could be the coldest three months of the year.

Every three months the energy regulator for Great Britain, Ofgem, sets a maximum price that suppliers can charge customers on standard variable tariffs for each unit of energy. wallet with money Glimmers of hope: your personal finance diary January-April 2024 Read more

The increase means that for the period 1 January to 31 March, the price cap is £1,928 a year for a typical household that uses gas and electricity and pays their bill by direct debit. That is up from £1,834 a year during the final three months of 2023.

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[–] not_woody_shaw@lemmy.world 14 points 10 months ago (3 children)

I've still not found a satisfactory explanation for why we have our electricity prices pegged to gas prices. It seems breathtakingly stupid, not to mention infuriating. Is there any sense behind it? Or is it just more corruption as usual?

[–] andthenthreemore@startrek.website 6 points 10 months ago (2 children)

Isn't it still that around 40% of electric is generated by gas turbines?

[–] not_woody_shaw@lemmy.world 3 points 10 months ago

So less than half, with more wind and solar being added all the time. Hmmm.

[–] wewbull@feddit.uk 2 points 10 months ago (1 children)

2023 was about ⅓, down from ⅖ the year before. The drop came from a decrease in demand, and an increase in wind and imports.

https://www.mygridgb.co.uk/historicaldata/

[–] andthenthreemore@startrek.website 2 points 10 months ago (1 children)

That's good. Each year the link gets more tenuous, but I can see that there was logic behind it however many years ago whenever it was set. Of course it'll have to get to the point where it's so totally absurd that even the Tories can't ignore it before there's any chance of a change.

[–] wewbull@feddit.uk 3 points 10 months ago (1 children)

Tories won't do shit. They've got an election to lose.

The electricity supply auctions need to stop paying all generators the price/MWh that the most expensive auction winner is at. For one thing, it means we're in this kind of feast or famine situation where the electricity price collapses when we have enough wind to cover demand. That kind of bimodal market is going to send companies to the wall, I'm sure.

Not sure what the right model is. The current on does have the advantage that generators really want to get into wind because the margins are so high, being able to sell for gas prices. Great, but it's at the expense of consumers. We need to balance that better.

[–] not_woody_shaw@lemmy.world 1 points 10 months ago

I guess the silver lining is that it encourages investment in wind and PV.

[–] Biohazard@feddit.uk 1 points 10 months ago

We have a lot of gas power stations. These are more efficient, cheaper and cleaner than coal or oil and can be brought online when it's a cold, windless winter day but when gas goes up, so does the cost of electricity.

Until there's a considerable battery base installed, this is the way of things for now.

[–] HeartyBeast@kbin.social 1 points 10 months ago

There are two components to the rise - the consumer's gas price (which is linked to the wholesale gas price for obvious reasons) and the electricity price, which as a substantial linkage to gas because a big chunk of generating capacity is based on gas for most consumers.

The government wants to avoid more energy suppliers going out of business, so it is raising the cap in recognition of the increased gas prices.