Conflict in the Middle East: Martin Lewis' 'get off the Energy Price Cap' mini briefing

Altior

I suppose the follow on is does the electricity energy price cap track the gas price. It certainly didn't appear to, post the end of lockdown spike in demand.

I'm sure there is some sort of correlation, my suspicion is that it wouldn't be as strong as the post assumes. As the raw material input is only fraction of the overall retail price of domestic energy. Similar to pump petrol and derv.

born_again

https://forums.moneysavingexpert.com/discussion/comment/81907931#Comment_81907931

Not forgetting the costs of the 20+ companies that went bust in that period, we all had to pay for.

The_Groat_Counter

Altior posted:

Seems to me that this is element of the post This rate is a prime driver of UK electric prices is stated as fact.

It's pretty well understood that the wholesale price of gas plays a crucial part in setting electricity prices in this country. There are oodles of well-referenced mentions of this on the web, but I'll give one example - this May 2025 ONS article, The impact of higher energy costs on UK businesses: 2021 to 2024.

A one line extract from the ONS article reads:

Therefore, it is the wholesale price of gas that is almost always the main factor in establishing UK electricity prices.

The ONS article in turn refers to a research paper in the November 2023 volume of the journal Energy Reports, The role of natural gas in setting electricity prices in Europe. This is free to read.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/81908023#Comment_81908023

Its just arguably a bit easier to track - the trickle of new charges these days - net zero or policy - as they add in - and the rare (in one case in theory temporary - as only promised for 3 years) drops announced for Apr.

That is if you take time to read the Ofgem press releases - change summaries / letters - that now come every 3 months with new caps.

And of late - the media headlines tend to only focus on the dual fuel headlines - and these have - like in Jan - hidden new electric only - or dominantly electric - costs - from the majority - due to gas price drops.

Of course not all levies / charges are new - the largest component of the £150 budget "not savings" - the 75% of RO costs (treasury ave £92) - the RO itself dates back over 20 years - to 2002.

[And its not the right time for the discussion - but it will prop up again repeatedly between now and 2045/2050 - is whether it is still correct that things like the RO levy - should only be on electric - such that homes using increasingly clean electric for heating - continue to pay disproportionately more than those using carbon emitting gas (based on cap TDCVs 3900/2700 = 45% more) - when i reality much of the new generation - and for that matter new network capacity - is now to replace that gas energy use. ]

Scot_39

Bit off topic -

Has anyone given a thought to those on commercial rates - like those hurt immediately or subsequently - in the last energy crisis 3 years ago.

So many articles on likes of BBC use phrase like "domestic users are safe until July, as cap in place" - but not all are or rather were not - I am afraid I lost track of what actions if any Ofgem have taken to help protect those in the same situation now.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/81907910#Comment_81907910

In large part - although the large SC rise began as SoLR - SoLR became so low to be negligible within 2 years (from posted reductions in cap letters/summaries).

But then was replaced by a larger if anything for most shift back from unit rates - to standing charge - as a result of Ofgem's Charging Review - when decided low users were not contributing their share of fixed network infrastructure costs (and due to net zero - expecting them to grow significantly as a share of our bills).

I'd have to look back but from the initial zero SC consultation report - that was iirc £103 of electric network costs shifted (ex VAT?)

- thats an average +28p / day on SC - most of that change.

- but a corresponding -3.8p/kWh on units at current median 2700kWh TDCV.

And just that- 3.8p being about 13% of current average retail SVT - I suspect would mask other real cost additions not related to wholesale costs - even if not recovering from the Ukraine peaks - if looked at unit rates in isolation.

https://consult.ofgem.gov.uk/energy-supply/standing-charges-domestic-retail-options/supporting_documents/standing_charges_domestic_retail_options.pdf

So rather than 1 vs the other - I suspect a wholesale gas vs retail total electric cost comparison for instance - would be cleaner than say unit rate or SC in isolation - in that 2022 - 24 cost shift in particular - and would show a divergence - due to the many extras - but would take a lot of data manipulation to dig into what would be a very messy chart.

QRizB says by and large wholesale rates have "kinda-ish track"ed gas price historically - I have no reason to question that - seems logical given in past gas has dominated our grid auction pricing.

But wholesale generation rates - vs retail costs - thats another thing entirely.

Sadly the recent history of pricing is full of a mix of Ofgem (govt indirect ) and govt direct policy (most recent examples include WHD, New Nuclear etc) and of course major wholesale disruptions.

And the renewables mix itself - a disruption to old norms - which might be again about to invert cost impact (as did during Ukraine peaks) - such as increased CfD renewables in mix - that bypass that gas link essentially

How much of last years 34% ave generation from wind - was CfD contracts on fixed / minimum pricing - so not tied to in AFAIK lower gas pricing (last Ofgem letter fig said CfD was adding £27 to wholesale costs for the cap 2700kWh but that was maybe year+ ago - thats 1p/kWh - and recent Ofgem data suggesting by one metric market rates on ave - maybe around 7-8p Jul-Dec 25 ) and so is that alone big enough to disrupt past trends in recent past. And I suspect thats again not simple - as wind intermittent - its impact on ave cost will be

https://www.ofgem.gov.uk/news-and-insight/data/data-portal/wholesale-market-indicators/

danlightbulb

I'm on octopus intelligent go because of my EV. What's the risk on prices and does the same advice to get on a fix apply? @MSE_Clare

dizzyblonderach

Hi everyone, my current energy fix is due to end early next month and I’ve secured a new fix via the energy club but it’s due to start in 5 days, which will incur a £100 early exit fee from my current provider. I’m trying to ask the new supplier to not take over until my current fix ends, but can they do that? And do people think it’s worth me paying the cut fee, given the current uncertainty? Thanks.

northernstar007

https://forums.moneysavingexpert.com/discussion/comment/81908994#Comment_81908994

you can move free of fees from 49 days before your current deal ends, so if your current deal ends before 22nd april then you wont pay any fees

EssexHebridean

As things stand right now, it would appear to be questionable whether the thread title is still good advice.