UK Energy Secretary Explores Possibility of Household Energy Price Cap Overhaul

The UK Energy Secretary is considering revising the current format of the household energy price cap to improve competition and alleviate concerns of stifled market.

Grant Shapps is reportedly contemplating adjustments to the household energy bill price cap initially introduced in 2019 to prevent excessive charges being levied by energy companies to household customers.

Most UK households have been on the price cap since Russia invaded Ukraine which drove the market to levels above the cap. The cap then kicked in to protect household from these massive spikes.

An unnamed insider informed news agency Bloomberg that Mr Shapps is currently evaluating the caps effectiveness, although it is understood that scrapping it is not currently under consideration and no decisions are imminent.

Advocates for change are pushing for modifications to the way the government approach the domestic sector as a whole and have asked that specific sectors should qualify for more help under a social tariff concept.

The current price cap is forecast to fall this October.

Cornwall Insight projects the price cap to dip from the current level of £2,074.00 to £1,860.00 for typical households in October 2023, followed by a rise to approximately £1,960.00 in January 2024.

Don’t forget, if you are a business customer, you are not protected by the household price cap.

Business electricity and business gas is not affected by any changes to the household energy price cap.

Business energy prices change all of the time and will move up and down based on the current level of wholesale energy.

For this reason, if it important to track the wholesale price of energy.

Track the latest price trends by clicking here.