Forecast Drop in GB Energy Price Cap to Save Typical Households £138 Annually
Cornwall Insight has forecasted an 8% fall in the Great Britain energy price cap in April, which would lower a typical dual-fuel bill by £138 to about £1,620, the lowest level since September 2024. The current Ofgem price cap for January stands at £1,758, marking a slight increase of 0.2% from the previous level.
This change follows government policy shifts announced in the Autumn Budget, which move certain policy costs from energy bills to general taxation. This has included ending the energy company obligation and cutting Renewables Obligation subsidies by 75%. However, planned grid upgrades costing around £28 billion are expected to add approximately £108 per year to bills by 2031.
The movements in the price cap are primarily driven by wholesale gas prices, grid-cost forecasts, and external factors such as increased US gas supply and a milder European winter. It remains important to note that the price cap is updated quarterly, does not apply to Northern Ireland, and represents a shift in how costs are allocated rather than a disappearance of costs.
Looking ahead, Labour aims to reduce domestic energy bills by around £300 by 2030 through increased clean power generation and further tax-shifting of policy costs. Their plans include a £13 billion warm homes initiative to promote low-carbon technologies.
There is ongoing discussion about a future levy framework which would move levies from bills to general taxation to encourage the use of electricity over gas, a move supported by industry advocates.
