Energy prices skyrocket as markets brace for sub-zero temperatures
Plunging temperatures and a surge in demand has seen electricity prices reach an all-time record and gas prices at their highest level in almost three years. The price for electricity has risen to almost £1,500 a megawatt hour and gas has jumped a fifth to 80p a therm.
It’s estimated UK gas consumption is currently 40% higher than this time last year, with low levels of renewable energy generation making us more reliant on imported fossil fuels.
With the majority of Brits staying home, households that are usually empty between school and working hours (say 9am to 5pm) are consuming much more energy than usual.
Additionally, freezing conditions and heavy snowfall across the northern parts of the country has caused households to crank up the thermostat, having a direct effect on energy bills.
In response to rising wholesale costs, energy regulator Ofgem is expected to increase the price cap when it is reviewed next month.
When the cap was last reviewed in August 2020 it was reduced to its lowest level due to a sharp decrease in wholesale costs as a result of the pandemic.
The cap, which came into force in January 2019, was introduced to protect 15 million UK households from upsurges to standard variable and default energy tariffs.
Households currently on a default or standard variable tariff could be saving hundreds by shopping around for a better energy deal, with over 100 cheaper tariffs available on the market.