UK energy prices set to fall to lowest level since Putin’s invasion of Ukraine

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"My mission is to cut costs and get bills even lower so that families can spend their money on the things that matter most to them" - Claire Coutinho, Secretary of State for Energy Security at the National Nuclear Laboratory in Salwick. Picture by Simon Dawson / No 10 Downing Street CC BY-NC-ND 2.0 DEED

As energy prices fall to their lowest level in two years, the government is launching a package of measures to help families save even more with cheaper deals.

  • Energy Security Secretary welcomes £238 fall in Ofgem price cap.
  • Government invites views on making standard default tariffs more flexible, so families pay less if using electricity when prices are lower.
  • Scheme to help customers repair or replace smart meter in-home displays after one-year warranty is launched.
  • Companies to receive £10 million funding to test new technologies and tariffs with customers to make the most of cheap, low-carbon power.

A new package of measures to help families save on energy costs and access cheaper deals is being launched by the government, as figures published today show prices set to fall to their lowest level since Putin’s invasion of Ukraine.

Ofgem confirmed the price cap – the maximum amount a typical household pays for gas and electricity – will fall by £238 from April. Energy Security Secretary Claire Coutinho has welcomed the decrease as a milestone in the government’s work to reduce costs for families – proof the plan to reduce bills for hardworking Brits is working.

Long-term measures announced today include examining how standard energy deals should work to pass on the cheapest electricity costs, plus £10 million in funding for companies to test new technologies and tariffs with their customers, to make the most of cheap, low-carbon power.

A new scheme to help customers repair or replace smart meter in-home displays after the one-year warranty is also being launched. Eight suppliers, covering the majority (60%) of the market, have signed up so far, including E, E.ON, Good Energy, Octopus, Ovo, Scottish Power, Utilita and Utility Warehouse. These displays provide an important service in helping families, including older and vulnerable people, keep track of their energy use. Extending support will help customers continue to make the most of the savings smart meters can offer as the price cap falls and competitive deals return to the market.

Over half of British homes already use a smart meter, meaning they can access cheaper, off-peak energy tariffs. These deals can save households around £900 a year by charging an electric car, for example, at off-peak times such as during the night – with 63% of people saying they would be likely to switch to a flexible tariff to help them save money.

The government is also putting out a call for evidence on standard energy tariffs, which customers are rolled onto at the end of fixed-term contracts, resulting in the vast majority paying a flat rate throughout the day and a potentially higher price than they need to. The government is seeking views on making these tariffs more flexible, so families pay less if using electricity at a time of day when prices are lower while protecting those who aren’t suited to a flexible tariff.

This builds on significant steps to deliver cheap, clean, British energy and create a strategic advantage in emerging industries including:

  • progressing a number of new carbon capture and hydrogen projects across the UK to capitalise on this emerging market backed by £20 billion
  • opening a competition to build small modular reactors – one of the most advanced nuclear technologies in the world – backed with investment
  • launching a £160 million fund to support the emerging UK floating offshore wind sector
  • opening bids for new British low-carbon electricity generation projects, worth £205 million this year alone

Energy Security Secretary Claire Coutinho said:

Today’s announcement that energy bills will fall by £238 on average will be welcome news for families across the country. This means households will be paying the lowest cost for their energy since Putin’s illegal invasion of Ukraine 2 years ago.

My mission is to cut costs and get bills even lower so that families can spend their money on the things that matter most to them. Today we’re announcing further measures to slash bills for families and improve access to cheaper, flexible deals.

Minister for Energy Affordability and Skills Amanda Solloway said:

Households will soon see their energy bill fall to the lowest level in 2 years. And to bring them down ever further, we want more families to able to benefit from the real savings that smart, flexible energy deals can offer.

Over half of British homes already have the potential to access cheap off-peak power through a smart meter but we can all fall victim to not having time to shop around for a good energy rate.

These new measures will ensure people can access these savings even if they’re on the standard basic tariff, so even the busiest families don’t miss out on cheaper bills.

As previously announced by Ofgem, from April 2025 suppliers will start to be charged by how much electricity their customers use during half-hour intervals – rather than via estimated daily or monthly usage. The government expects the low off-peak prices this generates to be available to every single household, including those who are on default tariffs, so that they are not overcharged.

The government has also today set out further plans to drive forward innovation in the energy market, to open up new offers and energy saving technologies for customers.

This includes:

  • £10 million for 3 projects that will give communities the chance to trial innovative energy tariffs and technology. Families across the UK will be able try out new services to help them manage energy use at home – such as personalised tariffs that offer them cheap off-peak prices which fit with their daily routine, or smart chargers for electric vehicles that switch on at night when electricity is cheaper
  • setting up 2 new working groups on customer protections and innovation, bringing together consumer advocates and suppliers to push the market ever further in delivering high-quality, cheaper energy deals. The commitment follows the government’s call for evidence on innovation in the consumer energy market last year

Daniel Portis, Deputy Director at Energy UK said:

A smart, flexible energy system will bring benefits for all customers. Energy suppliers are investing and innovating to meet this challenge with new products and services that help their customers have more control over their bills and take advantage of times when energy is cheapest.

So we welcome today’s package from government which could help households make the most of smart technology, provides important funding for innovation and kickstarts a vital conversation about how we ensure the future energy market works for all customers.

Source: Department for Energy Security and Net ZeroAmanda Solloway MP, and The Rt Hon Claire Coutinho MP

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