Energy price cap dropping in July 2023
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With the energy price cap dropping in July and therefore people on the variable rate will pay less, what happens to those on a fix, if their fix actually turns out more expensive than those on variable? We fixed on a 2 Yr fix in April 2022 and pay £201 a month
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Bearing in mind these are predictions not fact at this point.
Bear in mind I already thing these are incorrect as the standing changes are 53p for electricity per day and 29p for gas each day on average from 1st April 2023.
That is the same as it has always worked, a fixed tariff is a commitment from both sides.
Why enter a fix if you don't understand the risks and rewards.
Yes Ukraine has made the potential swings larger - but the rules remain.
It's almost like some people (and some businesses) - more of them - now expect to benefit regardless.
First Covid, and now Cost of living aid, seems only to be encouraging it.
Ultimately, if you end up paying slightly more, remind yourself of the reasons you took the fix - which I presume included for certainty, and because you could afford the amount being charged. Presumably the latter hasn't changed, and you have at least had the benefit of the former through some very stressful times for many people not on fixes.
The suppliers may start introducing new fixed rates etc as I'm predicting as is the media that the prices will fall further as they have been low for months but the public is not getting the benefits.
So wait and see and see what is on offer
We are variables, and will stay like that until July's announcement
So the old rule of fixing - for stability and avoiding future rises - may again kick in.
If the rates diverge by more than the exit fee - jump if want to loose the fix and pay it.
If you can find another fix - maybe take that - but don't expect the system to operate as it was before 30 plus suppliers collapsed - in part due to unsustainable fix pricing.
The originally fixes from the big 6 often contained an initial - sometimes significant premium - to offset the potential future saving.
A bad winter in Europe - EDF in France having another bad summer- so importing not exporting etc to us and RofEurope easily can shift uk and wider European power balance - and so even gas reserves and prices - dramatically. We have c8GW of interconnects now - 20% of winter demand.
With at least 1 more being authorised ( despite iirc govt court attempts to block)
We were importing - and exporting on some of the interconnects yesterday when prices hit £1950 c 6:30pm - £1.95/kWh wholesale - not retail - as wind dropped off c430pm
Uk own energy security is still inadequate on a windless evening or night - and our exposure to gas prices - still c3x summer 21 - is far from over.
The fact we had to use c2GW from 2 coal stations - scheduled for closure last year - a clear warning of the precarious situation we find ourselves in.
The luckily this time brief price spike yesterday evening the result of decades of govt failure.