Energy prices in the UK - statistics & facts
Despite having decreased considerably since the 2022 energy crisis, energy prices in the United Kingdom were not at pre-Covid-19-pandemic levels as of 2024. Monthly average wholesale electricity prices and gas prices in Great Britain displayed a growing trend in October 2024 and amounted to 89 British pounds per megawatt-hour of power and 97 British pence per therm of gas, respectively. The country had some of the most expensive electricity prices in the world for residential and industrial consumers, while gas prices are below the European average.
The Energy Price Guarantee (EPG) was a special price cap introduced by the UK’s government Office of Gas and Electricity Markets (Ofgem) to protect consumers from the soaring wholesale prices. The EPG increased in 2023, causing the household expenditure on gas to peak, growing by over 20 percent compared to 2022. The EPG was removed in 2024 due to the decline in energy prices, but the national price cap for a typical domestic dual fuel household paying by direct debit has grown in the second half of the year, reaching 1,717 pence between October and December 2024.
Like in every country around the world, energy prices in the UK are influenced by the global fuel market and economy, domestic and international demand, weather, and national policies. Given the number of factors affecting the market, it is difficult to make energy price projections. However, current forecasts expect a decline in gas and electricity prices in the upcoming years.
Natural gas prices in the UK
Natural gas is one of the main sources of primary energy consumption in the UK. Thus, when a gas supply shortage hit Europe in 2021 and 2022, energy prices faced a new level of instability. The country is particularly vulnerable to market fluctuations due to a lack of large gas storage facilities, combined with declining domestic natural gas production.The Energy Price Guarantee (EPG) was a special price cap introduced by the UK’s government Office of Gas and Electricity Markets (Ofgem) to protect consumers from the soaring wholesale prices. The EPG increased in 2023, causing the household expenditure on gas to peak, growing by over 20 percent compared to 2022. The EPG was removed in 2024 due to the decline in energy prices, but the national price cap for a typical domestic dual fuel household paying by direct debit has grown in the second half of the year, reaching 1,717 pence between October and December 2024.
Electricity prices in the UK
Natural gas accounts for 35 percent of the electricity generated in the UK, the second-largest power source in the country with renewables. The UK’s dependence on natural gas was a combination of a quick coal phase-out campaign and inefficient nuclear power plants. In the European market, the marginal cost of the last source used to meet demand dictates wholesale electricity price. This role is often played by gas, the most expensive power source on the market. Consequently, as gas prices reached record highs, electricity prices in Great Britain also soared in 2021 and 2022. The average household electricity bill in the UK ranged between 922 and 1,152 British pounds in 2023, depending on the annual consumption. This was the highest figure ever recorded in the country.Like in every country around the world, energy prices in the UK are influenced by the global fuel market and economy, domestic and international demand, weather, and national policies. Given the number of factors affecting the market, it is difficult to make energy price projections. However, current forecasts expect a decline in gas and electricity prices in the upcoming years.
