For the first time, UK households are facing higher electricity prices than anywhere else in the EU.
Over the second half of last year, British homes paid 36p per unit of electricity, while they paid the ninth lowest gas prices at just 8p per unit among 27 EU countries. Experts warn that the high price of electricity compared to gas is discouraging consumers from switching to cleaner technologies, such as heat pumps.
In the first half of 2023, Dutch and Belgian households were paying more for electricity than the UK, but for the rest of the year, the UK's 36p per unit cost was the highest, followed by Germany at 35p. Historically, the UK had average electricity prices compared to the EU. This is the first time UK households have faced higher electricity prices than any other EU country since 1998.
One reason for high UK electricity prices is gas. In 2021, gas set the wholesale price in UK power markets up to 97% of the time, more often than in any EU nation. Another factor is levies, including schemes to help poorer households fit insulation and carbon taxes, which are paid via electricity bills but not gas. Without these taxes and levies, UK domestic electricity prices would have been 27p per unit.
Analysts predict that the energy bill for a typical dual-fuel consumer this autumn will be £40 lower than previously forecast. However, the £1,723 annual cost from October will still be up 10% from the £1,568 a typical household will pay from Monday.
