- Energy price cap set to decrease in October due to lower energy consumption
- Average household to save £200 in autumn despite prices remaining high
- Calls for alternative measures to protect consumers from high energy costs
Cornwall Insight anticipates that the energy price limit will decrease again in October due to high prices and energy-saving measures resulting in decreased energy consumption by the average household.
According to a closely followed forecast, the energy price cap will decrease once more. As the energy regulator has stated that the average household is consuming less energy.
According to Cornwall Insight, a specialist in energy research, the average household will spend approximately £200 less in the autumn compared to the following month, but will still pay “well above” historical levels.
Before the implementation of Ofgem’s new price cap on Saturday, 1 July, the research firm predicted that the limit for a typical household would be equivalent to £1,871 per year from October through December.
Cornwall Insight predicts that under the January 2024 price limit, expenses will increase once more. It is anticipated that annual expenses will reach $1,900 in the three months leading up to the end of March.
This is lower than Ofgem’s March–June £3,280 limitation and July–September’s £2,053 limit.
A household’s average yearly energy expenditure was capped at £2,500 by the energy price guarantee. This plan concludes on Friday.
While wholesale gas prices and electricity bills are decreasing, the primary reason the average bill is decreasing is that beginning in October, Ofgem will revise downwards the amount of gas and electricity the average house consumes, thereby affecting the average bill.
Ofgem examines the average domestic energy consumption every two years, but this evaluation was halted due to the COVID-19 pandemic.
Using pandemic-missed data from 2019 and 2021, the agency determined that UK homes are using less power and gas.
This decrease is the result of increasing energy costs, energy-saving measures, and the weather.
The definitive October price ceiling announcement will not be made until late August. Cornwall Insight criticized the price ceiling model, however.
The principal consultant of the research firm stated that “doubts about the effectiveness of the cap in protecting consumers and its impact on tariff competition become a regular topic of energy discussions” as a result of the public’s continued struggle with high energy costs.
Dr. Craig Lowrey stated that alternative measures, such as social tariffs and energy efficiency measures, should be examined.
“It is crucial to explore alternative measures that can better protect consumers, promotes fair competition, and ensure affordable and transparent energy pricing for all”
“Reductions in the price ceiling should not lessen the urgency of instituting necessary changes. The protection of vulnerable households from high energy expenditures remains an urgent matter requiring immediate attention, he stated.
