Energy Price Cap Information 2024

Latest Energy Price Cap Announcements

According to the latest announcement from Ofgem, energy bills fell by an average of 12.36% between 1 April to 30 June 2024; around £238 cheaper than the price cap set at the beginning of 2024 (£1,928). This is due to a mild winter boosting gas storage levels in the UK.

However, prices may increase again in October 2024 according to predictions. The price cap does not apply to business energy.

Updated 23rd April 2024.

What Is The Energy Price Cap? 

Ofgem introduced the price cap in 2019 to ensure suppliers charge fair prices in line with wholesale costs. It restricts the amount suppliers can charge customers for each unit of gas and electricity used. If you use more energy, you will pay more for your energy. The price cap only applies to customers on a standard variable tariff. 

How The Price Cap Is Calculated 

The costs worked into the price cap include wholesale energy costs, network maintenance, government policies (e.g. cold weather payments etc), capped supplier profits and VAT. 

Here’s a breakdown of the costs that are included in the price cap: 

• Wholesale costs - this is the cost of the gas and electricity from the grid. 
• Network/ operating costs - this covers all the costs of pipe and cable maintenance that delivers energy to UK households, including all operational costs associated with metering and billing. 
• Policy costs - this supports government initiatives and social schemes. 
• VAT - 5% is added to the price.
• Supplier profits - this sits at around 2% of the bill under the price cap. 
• Payment method allowance - a slight variance in price to cover the costs of the payment method used. 

The price cap is set at a different level for each payment method.