Bills are currently the highest they’ll be all year, according to a research firm, who say customers can expect lower energy costs for the rest of 2024.
By Sarah Taaffe-Maguire, Business reporter @taaffems
Energy bills are projected to fall by an average of 15% – equivalent to £293 in annual savings – as a mild winter meant high gas storage levels.
A closely watched forecast by Cornwall Insight indicates energy bills from April to June will drop to £1,635 a year for the typical user.
By comparison, average yearly costs from January to March stood at £1,928. For the rest of the year, however, bills will be lower, Cornwall anticipates.
Such a drop would result in the lowest energy bills in two years.
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Energy prices remain above pre-pandemic levels meaning many households will continue to struggle.
But fears of a price spike, due to costly and time consuming Red Sea shipping diversions as Houthis targeted shipping vessels, have not materialised.
The price cap will fall further when revised again in July before a slight rise in October for the final three months of the year.
From July to September there’ll be another fall, to an expected £1,465 a year, saving the average bill payer £170.
The slight rise from October to December will be to £1,524, still less than the current price of keeping the lights on.
The energy regulator Ofgem puts a cap on the amount that energy providers can charge per unit of power every three months.
Those caps have come down as wholesale oil and gas prices have fallen.
As well as high gas storage levels the predictions suggest Red Sea disruption has been weather by the UK via a steady supply of liquefied natural gas (LNG) through the Atlantic and good availability of cargo in Europe and Asia partially due to mild weather. Cornwall said.
Despite the positive outlook, the UK energy system still remains volatile due to reliance on gas imports, said the chief executive of Cornwall Insight, Dr Craig Lowrey.
“Our energy system is still walking a tightrope, and we cannot be sure another political or economic crisis won’t send bills straight back up.
“If we don’t speed up the switch to sustainable energy and cut down on volatile imports, [bills] are likely to stay [high]”.
The next official price cap announcement for April will be published on 23 February.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
