The cost of natural gas in the UK has increased 420% in the last 12 months and this, along with environmental factors are affecting the production of electricity which has caused prices to sky rocket in recent months. This means that energy firms are changing their prices and creating new tariffs with higher prices without warning so to be certain you pay the unit rate and standing (daily) charge you see in the results you will need to switch immediately as waiting even a short time will likely see the prices increase. Unfortunately you will also be seeing an increase in what you were previously paying.
Currently it is not economically viable for many suppliers to generate gas and electricity for their customers so one of two things are happening; prices are going up significantly or they are ceasing trading. Five energy firms in the last 5 weeks* have gone bust – Utility Point, People’s Energy, PFP Energy, MoneyPlus and Hub Energy. 2 other suppliers have gone bust this year – Simplicity and Green Network Energy, between them, these 7 companies had over 2 million customers.
With the move away from burning coal to generate electricity the UK are relying more on wind farms, the largest being in the North Sea however, in recent weeks the usual windy conditions have calmed and this is the case for the majority of the wind farms across the UK and Europe which has sent costs spiralling as there is not the supply to meet the demand.
In the UK the reserve Gas storage is at record lows, general supply from overseas is down and the cost has increased. The knock on effect of this is higher energy prices for consumers. In fact, these prices are the highest in 13 years currently are not showing signs of going down.
Source: ICIS price data
UK consumers are protected by the energy cap every 6 months but this has already risen £235 this year and it is expected it will rise significantly next year too. The way to protect yourself against the potentially rises is to fix your tariff now. Most suppliers are offering 2 and 3 year fixed tariffs, it could be worth locking in the prices now for the foreseeable future to give households confidence in their monthly budgets. Whilst it is unlikely that a drop in prices will happen soon, should there be a huge price drop then you will need to pay an exit fee to move to a cheaper tariff, but the savings could outweigh the fee should prices drop significantly – but this is not expected any time soon.
Because of the supply issues and the increased prices, suppliers are not actively seeking new customers which is why you will see a smaller comparison than usual, we are constantly working on increasing the number of suppliers we are offering but this a nationwide problem.
*Correct as of 16/09/2021
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