Ofgem News & Analysis
4 articles
Market Mood
UK Electricity Prices Soar 18.91% Compared to Global Averages
UK electricity prices reached an average of $110.56 per megawatt hour in April, significantly higher than Japan's $92.89, Germany's $88.98, France's $26.48, and the US's $44.19. This price disparity is attributed to Britain's marginal pricing system and increased reliance on natural gas. The government is spending over £1 million (approximately $1.35 million) daily to support British Steel amid rising energy costs. Moreover, as of June 2025, households owed over £4.4 billion to energy suppliers, indicating financial strain on consumers. These developments may impact UK economic stability and energy policies.
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Households may receive free electricity on sunny weekends
Households and businesses in Britain may benefit from free or cheaper electricity during periods of excess supply, such as sunny weekends, according to the National Energy System Operator (NESO). The updated Demand Flexibility Service, approved by Ofgem, aims to manage low electricity demand in summer while increasing the use of renewable energy. This program is available to customers with smart meters from participating suppliers like British Gas and Octopus Energy. Rewards for participation may include lowered rates or points convertible to gift cards, enhancing energy consumption patterns based on weather conditions.
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UK Energy Prices Drop 7% as New Price Cap Takes Effect
On April 1, typical household energy costs in the UK fell by 7%, translating to a £117 annual decrease, due to the new energy price cap. Gas prices are now capped at 5.74p per kWh, while electricity is capped at 24.67p per kWh. However, due to rising oil prices linked to the US-Israel war with Iran, forecasts suggest bills could increase by 18%, or £288, by July, bringing annual costs to approximately £1,929. The energy regulator Ofgem will announce the further price cap on May 27.
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UK Conservative Leader Proposes Tax Cuts on Energy Bills Amid Rising Costs
Kemi Badenoch, the Conservative leader, has urged the UK government to cut taxes on energy bills prior to considering direct payments to households amid energy price inflation. She highlighted that current energy bills are set to decrease for three months under Ofgem's price cap, but are expected to rise subsequently due to geopolitical tensions. The Conservative Party has announced plans to eliminate green levies on energy bills. Additionally, the government has indicated limitations on financial support based on borrowing constraints to maintain inflation and interest rates.
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