Ofgem has announced that from 1 July – 30 September 2023, the cap on the unit cost of electricity will be £0.30 per kilowatt hour (kWh) and £0.08 per kWh for gas.
This means that the typical annual household energy bill will be around £2,074, which is around £420 lower than the current Energy Price Guarantee set by the UK Government.
While the price of energy bills is expected to come down, more needs to be done to address the energy and climate crises.
Statement from Mike Thornton, chief executive at Energy Saving Trust, about the Ofgem price cap announcement:
“It will be a relief for many that gas and electricity bills are expected to come down on 1 July, with a reduction in wholesale costs set to bring consumer prices below the current Energy Price Guarantee.
“However, the UK Government must not lose the acute sense of urgency needed to address the root causes of the energy and climate crises for the long term, while ensuring that proper support remains in place for those that need it now.
“Energy prices are still around twice as high as they were just over two years ago. Ten-year predictions indicate that prices are likely to stay at elevated levels if we remain tied to volatile international fossil fuel markets. Further increases to the price cap are expected as soon as the end of this year.
“The urgency of the climate impact resulting from our over reliance on fossil fuels is once again at the forefront of our minds. Renewed warnings from scientists are that global temperatures are likely to exceed 1.5C within the next four years.
“We already know what the solutions are to these challenges. They are not new and alongside many other industry leaders, we reiterate our calls to invest in energy efficiency and accelerate the electrification of heat to drive down energy demand. Recent analysis has revealed that if the UK Government doesn’t roll out a widespread insulation programme and renewable energy projects, gas imports will account for £500 of people’s energy bills every year for the next 12 years.
“Unfortunately, the latest announcements in this area from the UK Government, on its Energy Security Day, still fell short of what is required to both address the long-term impacts on prices and achieve net zero.
“Despite setting a target of 15% reduction in energy demand by 2030, the UK Government has not set out a plan about how it will be delivered. They need to drive forward the systemic changes required to minimise bills, cut carbon and increase energy security for the long term. We cannot afford to wait any longer for the urgent action required.”