Every three months the energy price cap is updated, which changes the maximum amount that energy suppliers can charge for their standard variable tariff. That's the tariff that most people are on right now (Feb 2024).
The next update to the price cap will be on April 1st 2024.
Here are some links to some handy bits of this blog:
The Ofgem energy price cap is priced per kilowayy hour.
Kilowatt hours are the units used to measure the power you use. Gas and electricity are both measured in kWh, and if you have a traditional capped energy deal from a supplier, you'll be charged for each kWh you use during your contract.
Ofgem says that one kilowatt hour (kWh) is the amount of energy it would take to power a 100-watt lightbulb for 10 hours or a fridge-freezer for 26 hours. An electric oven uses 2kWh every 30 mins. If you wondered.
The next price cap will come into effect on July 1st 2024. And the good news is that energy prices are predicted to come down.
Exact prices are always announced in advance so suppliers and consumers can get ready for the change in prices. July 2024 energy prices will be announced at the end of May 2023.
Fused customers will get get at least 30 days notice of price updates, so keep an eye on your emails.
The price cap from April 1st - June 30th 2024 is:
That puts the annual bill for that "average household" at £1,690 a year. But remember, suppliers charge customers per unit, so everybody's bills will look different depending on how much power they use.
The next price cap will come into effect from 1st July 2024. Leading energy analysts Cornwall Insight predict that it will decreased again to about £1,497 a year for the "average" household. This number was reported in Jan 2024 and could change.
These are predictions based on wholesale prices and the predicted costs per unit of gas and electricity based on energy market data. It could turn out to be incorrect when the new price cap is announced. We'll update this blog ASAP when we know more about the July price cap.
If you're on a capped energy deal (rather than an Unlimited Energydeal from Fused) you'll be charged per unit of energy you use at the current price per unit:
Your usage is measured by your energy meter, which is why it's always important to submitmeter readings.
Your energy meter measures how many units of energy you use, which is why the price per unit has the potential to have such a big impact on your bill.
Your monthly direct debit for gas and electricity bills is usually set at a fixed price, but you'll be charged extra if you use more than your usage limit.
Find out more in about how bills work inguide to bills for students.
Or take a look at a deep dive to the alternatives to capped energy deals with our Unlimited Energy for students page.
Some smart energy meters won't update automatically, so might show the wrong rate for energy. You'll still be billed correctly, though, and your supplier will keep trying to update it, so eventually it should reflect the actual cost of the power you use each day.
All energy suppliers will change the price of their standard variable tariff after the price cap. If you're on a fixed energy tariff, your price won't change because of the price cap, but you may default to the SVT at the end of your contract.
The energy price cap only affects the price of the standard variable tariff. The price changes in response to changes to wholesale costs in the energy market. This explains the variable part of the standard variable tariff (SVT).
A fixed tariff keeps the price of energy the same throughout your contract - you'll always pay the same per kWh of energy, no matter what happens with the cost of energy. This caused problems during the energy market when wholesale energy prices increased dramatically.
If you're on the standard variable tariff, the amount you pay for energy will change after the price cap. This is true every time the price cap changes, if you're on a SVT.
Your new monthly direct debit will reflect the changes per unit of energy from the date the price cap comes into effect. The price cap also affects how much energy companies can charge you for your daily standing charge.
You'll always get at least 30 days notice of any changes to your monthly payments.
How the SVT affects your payment will depend on the type of package you have. You can get in touch via your customer dashboard if you have any questions.
When you sign up for your Fused package, your quote is based on the cost of energy for the whole of your contract. If the costs we base your package on turn out to be different than the price cap that's actually announced, your price will be updated.
If you're not a Fused customer, but you like the idea of a bills package, why not find out what a bills package is and how it could simplify your finances?
Ofgem is the independent energy regulator for Great Britain, which is England, Scotland and Wales. Northern Ireland is covered by a different regulator.
They work with the government and energy suppliers on behalf of energy bill payers. Part of their role is to make sure energy is sustainable, customers get the right information and services from their suppliers, and manages prices with the energy price cap.