Hey everyone,
Just a short post today to tell you somethings that are happening in the energy market before the end of February, there’s a lot going on so a lot to keep your eyes on. I’ll jump straight in, here’s the timeline:
- 18 February – Cornwall Insights prediction of April price cap to be released
- 20 February – Expecting British Gas to announce 2024 profits
- 25 February – Ofgem announce April price cap
- 28 February – Government consultation on Ofgem closes
I’ll quickly talk through each of these points as well.
Control your bills:
Energy Price Comparison* with Uswitch – Save over £150 compared to the predicted 2025 price caps
Car Insurance Price Comparison* with Uswitch – Save up to £523 per year
Home Insurance Price Comparison* with Confused.com – Savings can be made by reveiwing your home insurance premiums annually
Broadband Price Comparison* with Uswitch – Broadband from as cheap as £19 per month
Boiler Insurance* with Home Emergency Assist – 35% off – Use code: REGULATORGUY
Cornwall Insights
Tomorrow, we’re expecting Cornwall Insights to give their prediction for the April 2025 price cap. This is important because they are usually accurate to about 1%, so basically whatever we hear tomorrow is going to be close to certain for the price cap announcement that Ofgem will make next week.
This will mean that suppliers can start working on fixed rate tariffs to promote the following week, probably priced around £100-£150 cheaper than the cap, depending on how aggressively they are looking to take on new customers.
We are expecting the price rise to be somewhere between 5-7% of the current cap, so somewhere between £87 and £122 increase on the current prices. We’re also expecting further price rises in July and October, so it’s a good idea to move to a fixed rate tariff soon if you can.
British Gas 2024 Profit Announcement
Until recently, British Gas has always been the largest energy supplier in the UK, in terms of the number of UK residents who are supplied by them. Their profit figures are often viewed by the industry as an indicator as to whether the price cap is too harsh or too lenient. In 2023, they recorded profit levels 10x higher than the previous year, sparking outrage. They went from £72m profit in 2022 to £750m profit in 2023.
The current hope is that we’ll see a normalisation of their profits, back down to double-digit millions. This would indicate that Ofgem and British Gas were right when they said that 2023 was a one-off because of a specific allowance in the cap. This will be interesting, but not likely to impact any of us in any significant way.
April 2025 Price Cap Announcement
Obviously, this is important because it’ll show us the actual amount we’re going to pay for the three months April – June 2025. The price cap is updated quarterly, and apparently gas prices are seeing a huge increase recently, so we’re expecting a big increase in the price cap.
Unfortunately, the UK Electricity pricing system has a single price mechanism for electricity, meaning the wholesale cost of electricity is equal to the most expensive electricity on the grid. We still rely on gas-fired power stations for a large portion of our electricity, so that means all electricity in the UK is linked to the price of gas. Terrible for consumers, but great for green energy generators who produce their electricity for cheap but sell it at gas-fired power station prices.
There will be a lot of news coverage on the price cap when it comes out, so I’m sure we’ll all see the news .
Government Consultation Reviewing Ofgem
There’s a lot going on here. The government are offering an open review of Ofgem, you can see the specifics on the .gov website here.
I’m working on finishing the report I’ve been working on for the last few months. But there are tonnes of charities and consumer groups that are also responding.
Once my report is done, I’ll be sharing it widely, asking everyone to get involved and share their thoughts on the failings of Ofgem over the past few years. In my eyes, they’ve failed to protect consumers adequately a number of times, and I plan to highlight these failings in a clear way, with evidence from Ofgem’s own consultation documents.
Thats everything for now, keep an eye on this blog and my petitions, updates will be coming.
Thanks everyone,
Richard Winstone
The Regulator Guy.
Control your bills:
Energy Price Comparison* with Uswitch – Save over £150 compared to the predicted 2025 price caps
Car Insurance Price Comparison* with Uswitch – Save up to £523 per year
Home Insurance Price Comparison* with Confused.com – Savings can be made by reveiwing your home insurance premiums annually
Broadband Price Comparison* with Uswitch – Broadband from as cheap as £19 per month
Boiler Insurance* with Home Emergency Assist – 35% off – Use code: REGULATORGUY
