Market news energy prices

What's happening to energy prices this year?

You may be aware that energy bills are made up a variety of costs. These include operator costs, government scheme costs, such as, Feed in Tariffs (FiT), Renewables Obligation (RO), Electricity Market Reform (EMR) and Climate Change Levy CCL, and the cost of purchased energy.

How these costs are aggregated into charges on your bill can vary from supplier to supplier. It is worth noting that the largest single cost is the price of energy and this makes up approximately 35% of an electricity bill and 65% of a gas bill.

Keeping track of costs

To help keep track of energy costs, every quarter, the government (BEIS – Department for Business, Energy & Industrial Strategy) produces an update on electricity and gas prices for the non-domestic (business) market. This is published once a quarter in arrears and below we have covered non-domestic electricity and gas prices to the end June 2019. Find out more here

Electricity prices

The good news is that although year on year prices in the non-domestic sector have increased by 4.6 per cent (Q2 2018 to Q2 2019) in Q1 and Q2 2019 we have seen a decline across the vast majority of consumption bands for average electricity prices.

The average pence per KWH across all consumption bands is now 11.62p compared to a peak of 12.37p. The biggest fall has been for the smallest customers, up to 20,00MWHs, who have seen a 0.69p fall from the peak of Q4 2018.

Gas prices

The story for gas prices is more mixed, between Q2 2018 and Q2 2019, average gas prices in the non-domestic sector rose by 2.8 per cent.  There was a fall of 11 % in the Very Large band to an increase of 11 per cent in the Very Small band.

p/kWH = Unit rate paid and excludes any other costs
CCL – Climate Change Levy
ppu -= pence per unit

Why do prices change?

The reason prices change so often can be wide ranging and are linked to Third Part Costs and the Wholesale Market Energy price. Factors that impact on the global energy price can range from Weather forecasts (think what might happen to price if a “cold snap” is forecast) through to global demand, for example, Chinese economic growth, or global instabilities e.g. conflict in the Middle East.