While the typical UK household now pays £1,834 for electricity and gas, down from a staggering £4,239 peak, the true story of the energy crisis is found in the soaring debts, regional disparities, and a commercial sector where some small businesses are still paying 65p per kilowatt-hour.
Key Takeaways
- In April 2023, the Ofgem energy price cap for a typical dual-fuel household (using medium levels of 2,900 kWh electricity and 12,000 kWh gas) was set at £2,500 annually, a 1% reduction from the previous cap.
- As of October 2023, the average electricity unit rate for direct debit customers was 27.03p/kWh under the price cap, down from 34.22p/kWh in July 2023.
- The standing charge for electricity for standard variable tariffs in England, Scotland, and Wales was 52.33p per day in the April-June 2023 price cap period.
- April 2023 Ofgem price cap set average gas unit rate at 10.3p/kWh for direct debit dual-fuel homes.
- Gas standing charge under April 2023 cap was 29.82p/day for standard tariffs.
- October 2023 price cap reduced gas unit rates to 6.57p/kWh from 10.3p/kWh.
- Commercial electricity prices for small non-domestic sites averaged 45p/kWh in Q1 2023.
- Medium-sized business electricity unit rates hit 52p/kWh in Oct 2022 peak.
- Large industrial electricity prices rose 78% YoY to 28p/kWh in Q4 2022.
- Commercial gas prices for small businesses averaged 12p/kWh in Q1 2023.
- Medium non-domestic gas rates peaked at 18p/kWh in Oct 2022.
- Industrial gas prices up 120% YoY to 9p/kWh Q4 2022.
- Day-ahead wholesale electricity price averaged £100/MWh in Q1 2023.
- UK NBP gas winter 2022-23 futures peaked at 300p/therm.
- Baseload electricity wholesale fell to £50/MWh by Oct 2023.
UK energy prices spiked dramatically in 2022 and have since fallen but remain much higher than before.
Commercial Electricity Prices
- Commercial electricity prices for small non-domestic sites averaged 45p/kWh in Q1 2023.
- Medium-sized business electricity unit rates hit 52p/kWh in Oct 2022 peak.
- Large industrial electricity prices rose 78% YoY to 28p/kWh in Q4 2022.
- In 2023, average commercial electricity bill increased 60% to £15,000 for small firms.
- Half-hourly settled commercial sites saw 10% price premium in 2023.
- Cornwall Insight forecast commercial electricity at 38p/kWh for Q2 2024.
- SMEs on deemed contracts paid 65p/kWh electricity in mid-2023.
- Renewable PPA electricity prices for commercial averaged 25p/kWh in 2023.
- Commercial electricity demand fell 5% in 2022 due to price hikes.
- Fixed-term commercial electricity deals 6-12 months averaged 40p/kWh Q4 2023.
- Micro-business electricity cap set at 34p/kWh from April 2023.
- East Anglia commercial electricity prices 10% above UK average in 2023.
- EV fleet charging commercial rates averaged 30p/kWh peak 2023.
- Energy broker fees added 5-7% to commercial electricity contracts.
- 2021 commercial electricity average 15p/kWh, quadrupled by peak 2022.
- Demand-side response saved commercial users 15% on peak electricity in 2023.
- Northern Ireland commercial electricity 50p/kWh average 2023.
- Large energy users (>100GWh) negotiated 22p/kWh electricity 2023.
- Commercial electricity arrears rose 40% to £1bn in 2023.
- Green commercial electricity tariffs 2p/kWh premium average.
- Q1 2024 forecast commercial electricity 32p/kWh for small biz.
- Commercial electricity consumption 120TWh in 2022.
- 70% of commercial electricity contracts renewed at higher rates in 2023.
Commercial Electricity Prices Interpretation
Even the smallest UK businesses are now paying a king's ransom just to keep the lights on, with electricity prices so volatile that forecasting them feels less like economics and more like reading tea leaves.
Commercial Gas Prices
- Commercial gas prices for small businesses averaged 12p/kWh in Q1 2023.
- Medium non-domestic gas rates peaked at 18p/kWh in Oct 2022.
- Industrial gas prices up 120% YoY to 9p/kWh Q4 2022.
- 2023 average commercial gas bill £8,500 for small-medium enterprises.
- Half-hourly gas settlement premium 8% for commercials in 2023.
- Cornwall Insight Q2 2024 commercial gas forecast 9.5p/kWh.
- Deemed gas contracts for SMEs hit 25p/kWh mid-2023.
- Commercial gas PPAs averaged 6p/kWh renewable in 2023.
- Commercial gas demand down 12% in 2022 from high prices.
- 12-month fixed commercial gas 10p/kWh Q4 2023 average.
- Micro-business gas cap 15p/kWh from April 2023.
- Regional commercial gas prices 5% higher in Scotland 2023.
- Commercial gas broker commissions 4-6% of contract value.
- 2021 commercial gas 3p/kWh average, sextupled peak 2022.
- Gas flexibility markets saved commercials 12% on bills 2023.
- NI commercial gas 16p/kWh 2023 average.
- Large gas users (>1TWh) at 7p/kWh negotiated 2023.
- Commercial gas bad debt up 35% to £800m 2023.
- Green gas commercial premium 1p/kWh.
- Q1 2024 commercial gas forecast 8p/kWh small biz.
- Commercial gas use 250TWh in 2022.
- 65% commercial gas renewals price-hiked 2023.
Commercial Gas Prices Interpretation
Navigating UK commercial gas prices in recent years has felt less like a predictable market and more like a feeding frenzy of market volatility, where businesses must dodge everything from quadrupling baseline rates to punitive deemed contracts, all while chasing elusive fixed deals or green premiums in a grim carnival of pricing that leaves SMEs particularly winded.
Residential Electricity Prices
- In April 2023, the Ofgem energy price cap for a typical dual-fuel household (using medium levels of 2,900 kWh electricity and 12,000 kWh gas) was set at £2,500 annually, a 1% reduction from the previous cap.
- As of October 2023, the average electricity unit rate for direct debit customers was 27.03p/kWh under the price cap, down from 34.22p/kWh in July 2023.
- The standing charge for electricity for standard variable tariffs in England, Scotland, and Wales was 52.33p per day in the April-June 2023 price cap period.
- In January 2023, the price cap resulted in an average annual electricity bill of £1,654 for typical usage, a 54% increase year-on-year.
- Prepayment meter electricity unit rates averaged 27.66p/kWh under the October 2023 price cap, 2% higher than direct debit rates.
- For Economy 7 tariffs in April 2023, peak unit rates were 30.24p/kWh and off-peak 9.51p/kWh for direct debit customers.
- The average electricity bill for a medium-sized home rose to £693 annually in Q2 2023, up 7% from Q1.
- In 2022, residential electricity prices increased by 113% compared to 2021, driven by wholesale market volatility.
- Fixed-rate electricity deals averaged 28.5p/kWh in early 2023, 5% above the price cap rate.
- Regional variation showed Northern Scotland electricity standing charges at 54.21p/day in April 2023, higher than mainland rates.
- Electric vehicle tariff unit rates for Octopus Energy averaged 7.5p/kWh off-peak in 2023.
- Average smart meter electricity usage savings were 8% or £100 annually per household in 2022.
- In Q4 2022, electricity prices for typical households hit £4,239 annually before government intervention.
- Post-July 2023 cap adjustment, electricity bills fell 16% for typical dual-fuel homes to £1,834.
- Time-of-use tariffs like Octopus Agile averaged 15p/kWh during low-demand periods in 2023.
- In April 2024 forecast, residential electricity unit rates expected at 24.5p/kWh under new cap.
- Average annual electricity spend for low-usage homes (1,900 kWh) was £489 in Oct 2023 cap.
- High-usage homes (4,200 kWh electricity) faced £1,257 annual bills in April 2023.
- Electricity arrears for residential customers reached £2.8 billion in Q1 2023.
- Green tariffs added 1-2p/kWh premium on average residential electricity rates in 2023.
- In 2021, residential electricity prices were 23.4p/kWh on average, doubling by 2023.
- Digital variable tariffs offered 5% discounts on electricity unit rates for app users in 2023.
- Northern Ireland residential electricity prices averaged 35p/kWh in 2023, 30% above GB average.
- Heat pump electricity tariffs averaged 13.5p/kWh on dedicated rates in 2023.
- Average prepayment electricity bills were £1,717 annually in Jan 2023 cap period.
- Fixed one-year electricity deals post-cap averaged £1,450 annual cost in late 2023.
- Electricity price cap for direct debit fell to 24.84p/kWh unit rate in Jan 2024 forecast.
- Residential electricity demand averaged 3,800 kWh/year per household in 2022.
- Price cap protections covered 80% of residential electricity customers in 2023.
- In Q3 2023, average residential electricity bill was £752 for electricity-only.
Residential Electricity Prices Interpretation
The energy price rollercoaster has finally slowed to a nauseating crawl, offering a fleeting and confusing breather between climbs, where the mere concept of 'savings' now means not being financially electrocuted quite as badly as last month.
Residential Gas Prices
- April 2023 Ofgem price cap set average gas unit rate at 10.3p/kWh for direct debit dual-fuel homes.
- Gas standing charge under April 2023 cap was 29.82p/day for standard tariffs.
- October 2023 price cap reduced gas unit rates to 6.57p/kWh from 10.3p/kWh.
- Typical medium household gas annual bill was £1,717 under Jan 2023 cap, up 129% YoY.
- Prepayment gas rates averaged 6.64p/kWh in Oct 2023, slightly above direct debit.
- Economy 7 gas rates unchanged at standard levels, averaging 7.5p/kWh post-cap.
- Average gas bill for medium homes was £406 in Q2 2023, down 28% from Q1.
- Residential gas prices surged 145% in 2022 vs 2021 due to global supply issues.
- Fixed gas deals averaged 7.2p/kWh in Q1 2023, premium over cap.
- Northern Scotland gas standing charge 30.12p/day in April 2023.
- Octopus Tracker gas rates averaged 4p/kWh during low wholesale periods in 2023.
- Smart meter gas savings averaged £90/year per household in 2022.
- Peak 2022 gas bills reached £3,244 annually pre-intervention.
- July 2023 cap cut gas bills 39% to £1,717 typical dual-fuel.
- Low-usage gas homes (8,000 kWh) paid £517 annually Oct 2023.
- High-usage (15,200 kWh) gas bills £1,104 in April 2023.
- Residential gas debt hit £1.2 billion in Q1 2023.
- Green gas tariffs premium 0.5-1p/kWh over standard in 2023.
- 2021 average gas price 4.5p/kWh, tripled by 2023.
- Digital gas tariffs discounted 4% for online management in 2023.
- NI residential gas 12p/kWh average 2023, 50% above GB.
- Average residential gas consumption 11,500 kWh/year in 2022.
- Price cap shielded 22 million gas accounts in 2023.
- Q3 2023 average gas bill £344 for gas-only medium home.
Residential Gas Prices Interpretation
In the year of our energy crisis 2023, we went from gas bills that felt like financial cardiac arrest to merely a severe pinch, proving that while the government's price cap can soften a fall from a cliff, it can't magically restore the gentle slope of 2021.
Wholesale and Market Trends
- Day-ahead wholesale electricity price averaged £100/MWh in Q1 2023.
- UK NBP gas winter 2022-23 futures peaked at 300p/therm.
- Baseload electricity wholesale fell to £50/MWh by Oct 2023.
- TTF gas hub prices influenced UK at €80/MWh equivalent Q4 2023.
- Imbalance prices for electricity averaged £200/MWh peak hours 2022.
- Carbon price floor at £18/tCO2 impacted wholesale in 2023.
- LNG import prices to UK averaged $15/MMBtu in 2023.
- Interconnector flows from Norway electricity 20TWh in 2023.
- Gas system sell price hit £5/therm in demand peaks 2022.
- Renewable generation share 40% lowered wholesale electricity 2023.
- Capacity market auction cleared at £49/kW for 2024/25 delivery.
- Volatility index for NBP gas reached 150% annualized 2022.
- Offshore wind auctions RO4 cleared at £73/MWh strike price.
- French interconnector bids averaged €100/MWh import 2023.
- Storage injection costs £2/therm average 2023 season.
- Wholesale electricity spread (day-night) £20/MWh average 2023.
- Russian gas ban increased UK spot prices 20% short-term.
- Forward curve for gas Q1 2024 at 80p/therm.
- Negative prices occurred 50 hours in 2023 due to renewables.
- Pipeline gas from Norway 50% of UK supply 2023.
Wholesale and Market Trends Interpretation
After riding a rollercoaster from gas-induced panic to a renewable-powered comedown, Britain's energy market now nervously sips its tea, eyeing both the calming interconnectors and the volatile fine print.
Sources & References
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