Can someone explain the new enrgy price cap, please?

[Gingerkittykat]

This article on the BBC once again talks about a typical household and I'm finding it difficult to work out what it means to me.

My bills were £50 a month each for gas and electricity so what percentage increase should I prepare for?

Will our bills still rise in October but at a lesser rate than we were expecting or is it capped at the price it is now?

We don't know the exact price per kwh and standing charge yet but it will be less than what was originally planned for October.

The average is described as follows:

According to Ofgem, the average British household has 2.4 people living in it and uses 2,900 kWh of electricity and 12,000 kWh of gas. This works out at 242 kWh of electricity and 1,000 kWh of gas per month.

Of course, this is just the average consumption for a household of between 2-3 people. The more gas or electricity you use, the higher your bills will be. It also assumes you’re using a mix of gas and electricity, but if your home uses only electricity, you’d expect your electric consumption to be higher.

www.moneysavingexpert.com/news/2022/09/energy-bills-price-freeze-cost-of-living-government-liz-truss-/

You need to know your predicted annual usage of gas and electricity.

When you know that, you can then use the cost of each unit that is predicted to work out your predicted annual bill.

No one quite knows the new figures yet.

If you post on here, we can make some predictions - but that's all they will be

Martin Lewis explains it perfectly as per ops link above

The email I've got from Hugo, which is an energy use monitor app, had new rates as roughly:

NEW PRICE FREEZE ELECTRICITY
starts 1st Oct

33p per kWh
CURRENT PRICE CAP ELECTRICITY
Ends 31st Sept

27p per kWh

NEW PRICE FREEZE GAS
starts 1st Oct starts

9p per kWh
CURRENT PRICE CAP FOR GAS
end 31st Sept

7p per kWh

Formatting a bit wonky but hopefully legible. So you can use those and your usage to work it out.

As a very rough estimate, your bills will be roughly double this winter what they were last winter (when the price cap was almost half as much), minus the £67 per month we're getting as the cost of living payment.

So, if your energy use from last January amounted to £200 for the month, this January it'll likely be around £333 (twice 200 - the £67).

I think!

And I think Martin Lewis said about a 6.5% increase to current bills as a rough way of working it out (that includes the £400 from government).

He did, but it's kind of impossible to gauge how much energy we use in winter based on our most recent bills from summer, so doesn't actually tell us anything useful.

True but it assumes you are paying via direct debit and that that estimate is reasonably accurate, as most people pay the same every month.

Fair point!

It'll be interesting to see how it applies to fixed tariffs, as ML says he believes it will.

You just need to know your expected annual usage.

We will know the new rates and standing charges soon

Why the hell is electricity ncreasing more than gas?! We've only got electricity (from a renewable source apparently) and this seems unfair

It's a percentage - so you need to look at the gas price percentage increase vs electric

There was talk of untying the price of electricity to the gas price - as the UK does use a lot of renewables to generate electricity.

It's the cost of a unit of energy that's capped, NOT what you pay. The more you use, the more you pay.
Electricity cost is linked to the cost of gas, unfortunately.

Us too. We have an air source heat pump which is efficient and environmentally friendly but because it uses electricity (also from renewables) we stand to get shafted more than everyone with an old gas boiler generating loads of co2 and using vastly more kwh overall. Massively pissed off about it tbh.

How have you only got energy from a renewable source? Do you have your own wind turbine?

Is the standing charge getting capped? Has it ever been capped? Or just the units of electricity?

Yes the standing charges are included in the price cap too

@Hugasauras thanks for posting, how does the standing charge work? I want to compare to my fix but is there a cap for the standing daily charge?

Yes, standing charges are capped too. They may increase slightly same as the unit prices, I don't think anyone is sure yet.

Us too. We have an air source heat pump which is efficient and environmentally friendly but because it uses electricity (also from renewables) we stand to get shafted more than everyone with an old gas boiler generating loads of co2 and using vastly more kwh overall. Massively pissed off about it tbh.

Same here!

Gas is used to generate electricity. You may be on a green tarrif which makes you think your electricity comes from renewables, but it doesn't - all electricity from the national grid is pooled, so you can't buy elecricity from only renewable sources (it's like thinking you can buy mains water that is only from reservoir A and not reservoir B!). What green tarrifs really mean is that your supplier will invest a proportion of the profits from your tarrif into renewable energy generation.

Gas is used to generate electricity. You may be on a green tarrif which makes you think your electricity comes from renewables, but it doesn't - all electricity from the national grid is pooled, so you can't buy elecricity from only renewable sources (it's like thinking you can buy mains water that is only from reservoir A and not reservoir B!). What green tarrifs really mean is that your supplier will invest a proportion of the profits from your tarrif into renewable energy generation.

Ah I get it now! Thanks for explaining. And according to DH we all pay taxes for that renewable energy regeneration.

We were moved from Ovo and then they folded and we were moved to So Energy. Fixed until March.

And no we haven't got our own wind turbine as a pp asked upthread! We have an air source pump which is expensive to service but our monthly bill is only £60 (for 2 bed semi).

And according to DH we all pay taxes for that renewable energy regeneration.

There has already been big capital investment into building the infrastructure for green energy supply (wind turbines etc) and this money has come from various sources, including the Government's green levy on consumers' bills (this is probably the tax your husband means) and investment from the energy companies themselves (because they want to own the green infrastructure which will generate the bulk of the energy in the future). That latter point is why the Government aren't imposing a windfall tax on energy companies - instead they want them to invest vastly more into renewable energy technologies to speed up the pace of change and reduce the reliance on gas.