Electricity prices in the UK – 2022

Who sets electricity prices?

Each energy supplier sets its own rates for the electricity that it provides to its customers. This is usually in the form of how much they charge for a standing rate, which is the amount you pay each day to maintain your connection to the grid and receive electricity, as well as the unit rate, which is the price per kWh for electricity used. According to the Energy Savings Trust, most suppliers charge around 20p per day for the standing charge. However, this could be anywhere between 5p and 60p.

The average price of a kWh unit in the UK is around 14.37p. But this could be more or less depending on your provider.

However, providers are not just allowed to charge whatever they want for power. The industry regulator, known as Ofgem, aims to monitor prices and ensure that no one is being unfairly charged for their energy. As such, they set a price cap to ensure all providers stay within a certain limit. This is known as the energy price cap.

The price cap only applies to:

1. Prepayment tariffs that allow you to top up in advance or pay as you go. The price cap for these tariffs is currently set at £ 1,309*.
2. Standard variable rates, which are the default tariffs provided by most suppliers. The price cap for these tariffs is currently set at £ 1,277*.

Based on the official TDCV : 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year

The price cap limits the amount they can charge in each unit rate, so in effect, it restricts the price per kWh of energy. Of course, they can’t limit the size of your bill as this also depends on how much energy you use. As most providers’ standard variable tariffs are their most expensive, this essentially works as an overall price cap on rates.

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How are electricity prices calculated?

Energy prices in the UK are calculated based on a number of factors. The first is the wholesale price, which is the cost of gas and electricity that suppliers pay per unit. This goes up and down according to global factors such as supply lines, economic measures and political circumstances. Price fluctuations in the wholesale price are generally passed on to the consumer but often energy suppliers use these as an excuse to raise prices.

Other factors include competition, with the Big Six generally dominating the market. They tend to keep their prices in a very similar bracket, and when one goes up or down the others tend to follow. Most other energy companies use these prices as a yardstick.

2021 electricity price changes

As of October 2021, just about every energy supplier have raised their prices in order to reflect the cost of wholesale energy in the UK. As a result of the global gas shortage, the UK is currently in the midst of an energy crisis that has led to several suppliers going bust. These price increases are also reflected in Ofgem's energy price cap, which is currently at a record high level.

According to Ofgem, around half the households in the UK are currently on a standard variable rate. That means half the people in the UK are paying more for their energy than they could be. Although the rates have gone down this year, if you switch to a fixed rate deal then you could save even more.

Have a look around at other tariffs if you are on a standard variable rate and see what savings you could make.

When do electricity prices go up?

There is no set time when energy prices go up. However, they usually follow certain markers throughout the year. These are the times when Ofgem set their price cap, which determines the maximum a company can charge per kWh for some tariffs.

Prices also go up when one or more of the Big Six raises its rates. They usually try and keep their prices aligned so when one goes up you can be sure the others will be close behind.

Why are electricity prices rising?

If electricity prices are rising this is usually due to an increase in the wholesale price. This can be affected by many factors. For electricity, this is usually down the amount generated which can be determined by environmental factors and the state of the economy. But it’s not just wholesale prices that are the cause of price rises.

Prices also go up with inflation and also because of the competition. The Big Six energy providers tend to set the prices and group very closely together. When one raises or lower prices the others usually do the same.

How much have electricity prices increased?

In 2020, the average cost of energy has actually gone down around £84 thanks largely to the regulator Ofgem adjusting its price cap. However, historically, the price of electricity prices in the UK have been steadily rising over the last ten years.

According to a report in The Guardian, Britons are paying 40% more for their energy now than they were in 2015. This rise has far outstripped inflation and any rise in wages, making electricity more expensive now than it has ever been.

Will electricity prices increase in 2021?

Ofgem has already set its price cap for the period between October 2020 and April 2021. That means there is a limit to what suppliers can charge per kWh or energy on their standard variable tariffs.

Suppliers tend to set their rates very close to these thresholds so it is unlikely there will be any price rises between now and April 2021. However, Ofgem has also said it will probably raise its price cap at that time, so we can expect suppliers to start raising their prices from April 2021 onwards.

How will Brexit affect electricity prices?

The UK has now formally left the EU which is almost certain to have an impact on energy bills in the long run. As we are still to find out what the final deal with the union will look like, it is hard to say exactly what form this will take. But, an increasing number of energy issues are almost certain to lead to higher household bills.

Three major issues could be:

1. A reduction in the EU investment and the subsequent increase in transportation costs
2. Leaving the EU Emission Trading System
3. There being no replacement for the European Atomic Energy Community

As a lot of energy currently comes from the EU through pipes or wires, there is likely to be some issues here that will raise prices. We currently import about 5% of our electricity from the EU.

What can I do if my energy supplier raises prices?

If your supplier puts up their prices then they need to let you know a certain amount of time before these changes take place. If you feel you have not been given a suitable time then you can complain to your supplier.

If you feel the new prices are too high, then one thing you can do is switch suppliers. This is very easy to do and should take no longer than 20 days maximum. However, if you owe money on your account your current supplier can prevent the switch from happening until this has been paid off.

However, if you are on a fixed rate tariff, remember that your supplier cannot increase the prices until the fixed term of the contract has expired, unless:

1. The government rises VAT
2. Your tariff has structured price increases laid out in advance

When your fixed rate tariff ends, you will be placed on the default standard variable rate which will be more expensive and more susceptible to price increases.

How to compare electricity prices?

A quick search of the internet should help you to find plenty of information about the various energy prices, tariffs and plans. However, it can all be a bit overwhelming. That’s why it’s a good idea to use a switching service like ours, as we can help you find the best deal for you. Find out more by calling us on 0330 818 6223.

What is the cheapest electricity tariff in the UK?

While defining which supplier has the cheapest electricity prices is quite subjective for a number of reasons, there are a few suppliers that have notable electricity tariff plans that are considered a great value without breaking the bank. Below you can find a top 5 list for several different forms of electricity tariffs.

What is the cheapest available electricity tariff?

Not all the tariffs are also available. For that we list you in the following table the cheapest available electricity tariffs.

Cheapest Electricity Live Tariffs

Supplier	Name	Tariff Type	Availability	Standing Charge	Unit Rate	Annual cost	Exit Cost	Green Tariff**
	Prepayment Variable	Prepayment	✅	38.28*	34.82*	£ 1,149.47*	£ 0.00	✔️
	Standard Variable	Double Gold	✅	31.57*	35.80*	£ 1,153.38*	£ 0.00	✔️
	Prepayment Variable	Prepayment Variable	✅	53.90*	34.81*	£ 1,206.36*	£ 0.00	✖️

Prices differ on a postcode basis, this table therefore displays national averages
Based on Ofgem’s TDCV (2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year).
Is a Green tariff if all the energy consumed is compensated by renewable energy injections in the grid.

What is the cheapest electricity tariff?

The overall cheapest electricity tariffs can be seen below.

Cheapest Electricity Tariffs

Supplier	Tariff Type	Name	Availability	Standing Charges	Unit Rate	Annual Cost	Exit Fee	Green Tariff**
	Fixed - 24 months	/	❌	480.56*	£ 480.56*	£ 480.56*	£ 480.56	✖️
	Fixed - 12 months	/	❌	510.72*	£ 510.72*	£ 510.72*	£ 510.72	✖️
	Green - Fixed 12	/	❌	535.26*	£ 535.26*	£ 535.26*	£ 535.26	✔️

Prices differ on a postcode basis, this table therefore displays national averages
Based on 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year on average
A Green tariff means the supplier injects in the grid the same amount of renewable energy that is consumed.

What is the cheapest standard variable electricity tariffs?

Below you can find the pricing information of the five best value standard variable tariffs currently available in the UK:

Cheapest Standard Variable Electricity Tariff

Supplier ™️	Tariff 🏷️	Tariff info 📋	Electricity costs💰
	✔️ Availability:❌	Standard Variable Green elec: ✔️	£ 649.88*
	/ Availability: ❌	Standard Variable Green elec: ✔️	£ 649.88*
	/ Availability: ❌	Standard Variable Green elec: ✖️	£ 692.24*
	/ Availability: ❌	Standard Variable Green elec: ✔️	£ 1,778.80*

Prices displayed are national averages
Based on Ofgem’s TDCV (2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year).
A Green tariff means the supplier injects in the grid the same amount of renewable energy that is consumed.

What is the cheapest 12-month fixed-rate electricity tariffs?

Below you can find the pricing information of the five best value 12-month fixed-rate tariffs currently available in the UK:

✨Cheapest Fixed Rate Electricity Tariff 12 months✨

Supplier ™️	Tariff 🏷	Tariff info 📋	Annual cost 💰
	/ Availability: ❌	$UK_NRJ_Cheapest_Elec_F12_type$ Green elec: ✖️	510.72
	/ Availability: ❌	$UK_NRJ_2ndCheapest_Elec_F12_type$ Green elec: ✖️	633.73
	/ Availability: ❌	$UK_NRJ_3rdCheapest_Elec_F12_type$ Green elec: ✖️	651.42	£ 15.00	✖️
	/	❌	40.35 p*	57.29 p*	£ 1,808.79*	£ 150.00	✔️

Prices vary from one city to another, so we display national averages
Based on the official TDCV : 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year
A Green tariff means the supplier injects in the grid the same amount of renewable energy that is consumed.

What is the cheapest Fixed Rate Electricity Tariff 24 months?

Below you can find the pricing information of the five best value 24-month fixed-rate tariffs currently available in the UK:

Cheapest Fixed Rate Electricity Tariff 24 months

Supplier	Name	Availability	Standing Charges	Unit Rate	Annual Cost	Exit Fee	Green Tariff**
	/	❌	8.90*	15.45*	£ 480.56*	£ 75.00	✖️
	/	❌	27.39*	22.62*	£ 756.02*	£ 0.00	✖️
	/	❌	42.17*	20.92*	£ 760.59*	£ 30.00	✖️
	/	❌	33.78*	57.29*	£ 1,784.79*	£ 150.00	✔️

Prices displayed are national averages
Based on Ofgem’s TDCV (2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year).
A tariff is green if for each kWh consumed a kWh of renewable energy is injected in the grid.

What is the cheapest Green Electricity Tariffs?

Green tariffs are always a good choice. The three best offers in the UK can be found below. These are the electricity-only rates from dual fuel tariffs.

Cheapest Green Electricity Tariffs

Supplier	Tariff Type	Availability	Standing Charge	Unit Rate	Annual Cost	Green Tariff**
	Green - Fixed 12	❌	11.65*	16.99*	£ 535.26*	✔️
	Green - Fixed 12	❌	27.39*	20.07*	£ 867.62*	✔️
	Green - Fixed 12	❌	27.39*	20.07*	£ 867.62*	✔️

Prices vary from one city to another, so we display national averages
Based on the official TDCV : 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year
Is a Green tariff if all the energy consumed is compensated by renewable energy injections in the grid.

What is the cheapest prepayment electricity tariffs?

The 3 cheapest prepayment electricity deals are as follows:

Cheapest Prepayment Electricity Tariff

Supplier ™️	Tariff 🏷️	Tariff info 📋	Annual costs💰
	/ Availability: ❌	$UK_NRJ_Cheapest_Elec_PAYG_type$ Green elec: ✖️	£ 668.33
	/ Availability: ❌	$UK_NRJ_2ndCheapest_Elec_PAYG_type$ Green elec: ✖️	£ 700.43
	/ Availability: ❌	$UK_NRJ_3rdCheapest_Elec_PAYG_type$ Green elec: ✖️	£ 710.83

Prices vary from one city to another, so we display national averages
Based on the official TDCV : 2,900.00 kWh of ⚡ and 12,000.00 kWh of 🔥 per year
A tariff is green if for each kWh consumed a kWh of renewable energy is injected in the grid.

Read More

• Energy Price Cap
• Will Brexit affect energy
• Gas prices
• Compare energy deals

FAQ

Who sets electricity prices?

Energy suppliers set their own rate for electricity in the form of their standing rate – the amount you pay to maintain your connection – and a unit rate per kWh. According to the Energy Savings Trust, most suppliers charge around 20 per day for the standing charge. The average price of a kWh in the UK is around 14.37p. The cheapest price per kWh is around 12p and the most expensive is 24p.

How are electricity prices calculated?

Energy prices are calculated based on the wholesale price, which is the cost of gas and electricity that suppliers pay. This fluctuates according to global factors such as supply lines and political circumstances. Price fluctuations are passed on to the consumer resulting in prices of energy going up.

Other factors include competition, with the Big Six generally keeping their prices at a very similar level.

Will electricity prices increase in 2021?

Ofgem has already set its price cap until April 2022, so there is a limit to what suppliers can charge per kWh of energy on their standard variable tariffs until then. Rates are usually kept very close to these thresholds so it is unlikely there will be any major price updates before April 2022. However, Ofgem will change its price cap at that time, so expect an increase in prices from April 2022 onwards.

Who has the cheapest gas and electricity prices?

It depends. New tariffs are always coming on the market and you have to look at the difference between unit prices per kWh and the standing charges, which are combined for overall energy prices. However, currently, the cheapest unit price is with Click Energy, at around 15p per kWh.