Gas and electric prices across the United Kingdom have been surging at a rapid rate since January 2021. Wholesale prices for gas are up 250% in the last 9 months and there is no sign of the crisis coming to a halt.
The Government is discussing the option of offering emergency loans as energy suppliers struggle and the household bills of customers continue to rise. Consumers, however, are protected by sudden hikes in price via the energy price cap. This denotes the maximum price at which the consumer can be charged on a normal tariff.
However, the rising demand for gas and flailing supply means that without the ability to pass on costs to consumers, some energy companies are at risk of going bust. Bulb, a household name in Britain, is seeking funds to stay afloat. Bulb have a staggering 1.7m customers who rely on them for their energy, and they are working vigorously with an investment banking firm to maintain their balance sheet. This crisis could, and most probably will, spell the end for smaller energy companies.
Are your gas and electric bills at risk?
These market surges may quite possibly lead to one of the most expensive winters in the previous decade when it comes to energy costs. Ofgem, whose role it is to protect consumers by regulating a fair energy system in the UK, has claimed this week that energy prices will climb by an average of 12.5%. Companies are even increasing the prices of fixed-rate energy agreements with predictions of further energy cost rises to come.
An expert at Barina Partners predicts there will only be ten energy suppliers left by winter’s end. Down from 70 at the start of January 2021.
Put energy into keeping your costs down
Millions of people across the UK are set for higher heating bills from next month. For instance, the 11 million households who pay for their gas and electricity by direct debit will see an average cost increase of £139 from October onwards.
There are simple steps you can take at home to keep your bills down.
The first thing, if you haven’t already, is to fit a smart meter into your home. You can purchase one of these for around £30 and they can go into incredible detail on your daily usage. It will show you the impact you have by turning a light on or how much water you’re wasting.
Saving water is a huge way to avoid big bills at the end of the month. Did you know that the average person in the UK uses approximately 145l. of water every day? 145 litres every single day.
Also, ⅕ of your energy bill comes from the heating of water.
There are many ways to reduce the cost of heating in your home. Aerated showerheads, for example, mix water with air and sharply reduce the amount of water you use per shower. You can get them on Amazon for as little as £20!
Shower timers are another nifty device you can get for your home. The average adult in the UK spends over 7 minutes in the shower. Reducing that to around 4 minutes can make a huge difference in your energy bill.
Another way to reduce water-heating costs is with an instant boiling water tap. You may be thinking, how can a boiling water tap be less expensive than a kettle when it maintains a temperature close to boiling point?
Well, there is more to running costs than you may think. On average, the kettle will cost you about 2p every time you boil it. The average cost of a boiling water tap is about 3p a day.
Do you work from home? Drink a lot of tea? Boil your kettle for pasta?
You’re probably spending about 12-15p a day by boiling your kettle when you could be spending 3p. Someone wise once told me (My grandma), look after the pennies and the pounds will look after themselves.
Obviously, the initial investment into buying an instant hot water tap is greater than a kettle. But once installed, you’ve got access to boiling, hot, cold, and filtered water. You only use the exact amount of water you need each time, and it will help in keeping your energy costs down in a highly volatile energy market.