Latest news with #energypricecap
BBC News
7 days ago
- Business
- BBC News
London heat network users say price cap lack has cost them dearly
Residents connected to council-run heat networks say they are struggling to pay for heating because their spiralling costs are not covered by the energy price network schemes are meant to keep costs down by buying fuel in bulk. But because gas is purchased on a commercial basis by councils, end-users are not covered by the energy price cap set by Ofgem, the gas and electricity obtained by the BBC revealed heat network residents in London have been paying nearly 30% more than the Ofgem price cap rate since government said Ofgem would be made the regulator for heat networks in 2026 to "deliver fairer bills and ensure networks are kept in good condition". About 500,000 homes nationally are connected to the UK's approximately 13,000 heat include the maisonette owned by Dolly Thomas, who has lived there since 2011 with her husband and two estimated service charge for her home, in North Peckham, London, is more than £6,600 next year. More than half - £3,508.91 - is for heating and hot water. She will struggle to pay, she said."It's had a serious impact, it's not funny," said Ms Thomas. "We have [had] to give up a lot of things."I've got to the point where I've even asked the council to buy the flat back, but they said they don't have the money."Ms Thomas is connected to the Southwark Council-run North Peckham Heat Network which provides heating and hot water to 842 other homes, via a vast web of total amount of gas used is divided between each property, regardless of how much they Thomas was able to afford the service charge when she moved in, but the cost has tripled since she moved in. What is a heat network? Gas is purchased on a commercial basis by councils, and therefore not covered by the energy price cap set by means there is no upper limit on how much consumers like Dolly can be say many older heat networks in London have been poorly maintained, meaning huge quantities of heat generated in the boil room is lost as it travels along inefficient and badly insulated pipes. Stephen Knight, from the Heat Trust, said: "We see so many heat networks in the UK that have been poorly put together, poorly maintained with heat loses that is more than the heat delivered to customers. "That's what is driving a lot of the high prices along with really expensive and volatile commercial energy costs."The BBC has spoken to dozens of residents in London who are linked to communal heating systems and say they have seen big price hikes since the energy crisis in 2023-24. Sharon Shanhani has lived alone in her three-bedroom flat opposite the Consort Estate in south London since 2019. She paid £3,369 for heating and hot water last year."I don't use it much and I only have one radiator on," she said. "I basically give all my money to Southwark Council and I don't understand how that can be when I own my own home. "I really have to scrape [by], but it's compacted by the fact that I shouldn't have to be paying it."We don't have any meters in this block... there is no connection between how much you're using and the price you pay."Ms Shanhani claims the system is unfair and said she was concerned that she may struggle to sell her flat in the future, because of the rising energy she would like her own boiler so that she only pays for what she uses. What the BBC Investigation found: The BBC used freedom of information requests to all London councils and found more than 34,000 homes are connected to a heat network operated by a local authority in LondonThis number could be much higher because only 18 out of 33 local authorities responded to our request - of those, nine confirmed they ran heat networksAnalysis of these figures by the Heat Trust found all those who responded were paying less for gas than the Ofgem domestic price cap up until 2022-23Since 2023-24 they have paid on average almost 30% more than the rate set by Ofgem's price cap The figures revealed all nine boroughs experienced a rise in gas prices between 2020-21 and 2023-24. Reported increases ranged from 140% in Kensington and Chelsea to 330% in Waltham Forest Mr Knight said the data collated by the BBC revealed that "in the middle of the energy crisis in 2023-24, local authorities were paying more for the gas than those who had a home boiler that was paid through the domestic price cap". "Typically," he said, "it should be much cheaper for a big operator of a heat network to procure energy (gas) than a domestic consumer. "But, because of the lack of price protection from the price cap that situation was reversed during the energy crisis and that has led to thousands of consumers facing enormous bills, with some being lumbered in debt." Sarah King, Southwark Council's cabinet member for council homes, said heat networks were "a key part of the government's plan to cut carbon emissions" and her council was "leading the way" with its network."We also have some older networks that use higher temperatures and more complex pipework, which can lead to more heat loss," she said. Ms King said the reliability of its network was "high" and, where performance was found to be lower it was "prioritising upgrades"."We buy fuel in bulk to keep costs down," Ms King said. "But rising energy prices have pushed up heating charges."The council said it was supporting residents who preferred heat meters to better manage and had already installed about 2,000 meters."We know energy costs are a real concern," Ms King said. "If you're struggling with bills, please contact the council for support."Miatta Fahnbulleh, the minister for energy consumers, said the government was "determined" to make sure heat network customers paid "fairer prices for the energy they use, with rapid support and compensation if things go wrong".She said the Energy Ombudsman, Citizens Advice and Consumer Scotland were all "now on hand" to offer help and advice to heat network customers."We will also go further by making Ofgem the new heat network regulator," she said, "with the power to deliver fairer bills and ensure networks are kept in good condition."
Telegraph
24-06-2025
- Automotive
- Telegraph
Punish electric car owners who charge at peak times, Miliband urged
Electric car owners should pay higher electricity bills for charging their cars at peak times, the Resolution Foundation has said. The think tank said electric vehicle (EVs) owners should be charged more for plugging in their cars in the evenings to encourage them to charge overnight instead. Delivering electricity to households and businesses at peak times, especially between 4.30pm and 8pm, is around twice as expensive as at other times of the day. Despite this, electricity costs the same regardless of when it is used, with the extra cost of delivery spread across the day. The Resolution Foundation warned that the mass adoption of EVs could make this system untenable as a surge in people topping up their cars when they get home from work would lead to a huge spike in delivery costs that would make bills far higher for everyone. 'As EV adoption grows, owners who don't shift their significant energy usage will push up peak demand, imposing greater costs on the system and inflating bills for everyone else,' the think tank said. It is calling for the Government to axe the energy price cap for EV owners who use too much electricity and instead introduce variable prices. This would in effect mean they would pay higher prices for charging in the evening, encouraging drivers to charge their vehicles late at night instead. 'To ensure households with EVs and other technologies that can use electricity in off-peak times do so, the Government should give a strong nudge to consumers by setting a usage limit above which Ofgem's current fixed-tariff price cap would not apply and shifting these households on to variable tariffs instead,' the Foundation said. Zachary Leather, author of the report, said: 'We're transitioning to a different kind of energy system, one where we need demand to respond a bit more to the supply [of energy]. 'Wind and solar and other kinds of renewables are variable, rather than being able to be turned off and turned on at will, so that means that we need more flexibility in the system.' He said EV owners who charged only during off-peak hours would not only lower average bills for the country as a whole but also save money themselves. The typical EV owner would be able to save £120 annually by charging overnight, the Foundation estimated. 'All of these people with lots of really high energy use are the kinds of households that are likely to be able to contribute to cheaper bills by flexing that energy use,' Mr Leather said. Zonal pricing The call for EV drivers to be punished for charging their cars at peak times through higher bills is part of a wider review of potential changes to the electricity market, including shifting to so-called 'zonal' pricing. This would see Britain's energy market broken up into different regions, with electricity prices in each areas based on local supply and demand. Zonal pricing already exists in several countries, including Australia, Italy and Sweden. Adopting it in Britain, however, could prove controversial as it poses higher bills for households and business in the South of England, where demand is greatest. Ed Miliband, the Energy Secretary, is considering whether to adopt a zonal system as part of the Review of Electricity Market Arrangements. An announcement is expected shortly. The Resolution Foundation said an energy system which varied prices by region and time of the day would offer households savings of £200 a year, on average. However, families who cannot avoid using higher amounts of energy in the evening risk being punished by the reforms, the think tank warned. Mr Leather said: 'The Government should encourage households with flexible but high-energy use technologies like Electric Vehicles to shift their electricity usage out of the peak-time early evening period, so as to reduce both theirs and others' energy bills. 'But it must also act to avoid the reforms penalising low-income households with unavoidable and inflexible electricity needs.' A spokesman for the Department for Energy Security and Net Zero said: 'We are working closely with industry to build a more flexible energy system, as part of our mission to deliver clean power by 2030. 'Off-peak tariffs already offer savings of around 75pc for electric vehicle owners when they charge overnight, in a strong incentive to make the most of cheap off-peak power.'
Sky News
23-05-2025
- Business
- Sky News
Energy price cap to dip by 7% from July, regulator reveals
Households on the energy price cap will see a 7% reduction in their average annual payments from 1 July, the industry regulator has announced. The default cap - which is reviewed every three months - will see a typical household using gas and electricity and paying by Direct Debit stump up an average annual £1,720, Ofgem said. That is down from the current April-June figure of £1,849 and reflects a reduction in wholesale gas prices. The lower cap does not affect the millions of households to have taken a time-limited fixed deal. Nevertheless, it represents some relief for families grappling the cost of living aftershock that saw many essential bills rise by well above the rate of inflation last month. Ofgem's announcement was made just days after fresh forecasts suggested that bills linked to the cap could come down further from both October and January, given recent wholesale market price trends. Prices last winter had been relatively stable until a cold snap hit much of Europe in January and early February, driving up demand at a time of weaker stocks. Other risk factors include extended EU gas storage rules and global conflicts, not least the continuing Russia-Ukraine war that sparked the 2022 energy price spike and cost of living crisis in the first place. Tim Jarvis, director general of markets at Ofgem, said: "A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas. However, we're acutely aware that prices remain high, and some continue to struggle with the cost of energy. "The first thing I want to remind people is that you don't have to pay the price cap - there are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you. And changing your payment method to direct debit or smart pay as you go can save you up to £136." Please refresh the page for the fullest version.
BBC News
19-05-2025
- Business
- BBC News
Energy price cap: What next for gas and electricity bills and can I fix?
Gas and electricity bills are expected to fall in July, when a new price cap takes is likely to reverse the increase for millions of households on 1 April, under the current annual bill for a household using a typical amount of gas and electricity rose to £1,849 per year, an increase of £111, in energy price cap sets the maximum amount customers can be charged for each unit of energy, but actual bills depend on how much gas and electricity you use. What is the energy price cap and how is it changing? The energy price cap covers around 22 million households in England, Wales and Scotland and is set every three months by fixes the maximum price that can be charged for each unit of energy on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct 1 April and 30 June 2025, gas prices are capped at 6.99p per kilowatt hour (kWh), and electricity at 27.03p per means the annual bill for a dual-fuel direct debit household using a typical amount of energy is £1,849 per year. Those who pay their bills every three months by cash or cheque pay £1, cap does not apply in Northern Ireland, which has its own energy market. What is a typical household? Your energy bill depends on the overall amount of gas and electricity you use, and how you pay for type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference. The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more. Should I take a meter reading when the energy cap changes? Submitting a meter reading when the cap changes means you will not be charged for estimated usage at the wrong is especially important when prices go with working smart meters do not need to submit a reading as their bill is calculated automatically. What is happening to prepayment customers? Between April and June, households on prepayment meters are paying slightly less than those on direct debit, with a typical bill of £1,803, a rise of £113 from the previous four million households had prepayment meters in January 2025, according to Ofgem. Many have been in place for years, but some were installed more recently after customers struggled to pay higher introduced in November 2023 mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households. Can I fix my energy prices? Fixed-price deals are not affected by the energy price cap, which changes every three months and can go up or offer certainty for a set period - often a year, or longer - but if energy prices drop when you are on the deal, you could be stuck at a higher price. You may also have to pay a penalty to leave a fixed deal the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal. What are standing charges and how are they changing? Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies. They vary slightly by 1 April, the average electricity standing charge fell from 60.97p to 53.8p but the average gas standing charge increased from 31.65p to 32.67pSome customers in London and the North Wales and Mersey region saw larger argue standing charges are unfair because they make up a bigger proportion of the bill of low energy response, Ofgem has said that energy firms must provide a choice of price-capped tariffs from winter would have a standing charge and unit rate - as is the case now - and another no standing charge but a higher unit rate. However, the proposals have been criticised as being too complicated. What help can I get with energy bills? The Household Support Fund, which was introduced in September 2021 to help vulnerable customers, has been extended until March Warm Home Discount scheme continues to offer a discount to eligible pensioners and low income government's Fuel Direct Scheme can help people to repay an energy debt directly from their benefit addition, suppliers must offer customers affordable payment plans or repayment holidays if they are struggling with suppliers also offer hardship to the winter fuel payment mean more than 10 million pensioners have not received the money this Help with bills
