Ofgem’s Post

The quarterly energy Price Cap will change tomorrow (1 January 2024). The new #PriceCap is £1,928 The level is based on the typical use of an average household on a supplier’s standard default dual fuel tariff. It's a cap on the energy unit price suppliers can charge, not a cap on our total bills. If you use more, you will pay more. More on how this might affect you ⬇️ https://ow.ly/xaO850QaBtJ

The quarterly energy Price Cap will change from 1 January 2024. The new #PriceCap is £1,928 The level is based on the typical use of an average household on a supplier’s standard default dual fuel tariff. It's a cap on the energy unit price suppliers can charge, not a cap on our total bills. If you use more, you will pay more. More on how this might affect you ⬇️ https://ow.ly/xaO850QaBtJ

The energy price cap is set to change on 1 July 2024, with the new cap at £1,568 for a typical household on a standard default dual fuel tariff. This cap reflects the cost of supplying energy and sets the maximum price suppliers can charge per unit of energy purchased on the global market. It’s important to note that this cap limits the unit price, not the total bill. Higher usage will result in higher costs. Read more: https://buff.ly/3UZWCGK #PriceCap #EnergyIndustry #ClientAdvisory

The “price cap” does not limit how much consumers pay if they use more than the typical amount of energy, instead it mandates a maximum cost per unit for electricity and for gas. 

The price cap sets the maximum amount suppliers can charge for each unit of gas and electricity but not the total bill - so if you use more, you will pay more. https://lnkd.in/dBt3PE5i

New energy price cap level starts today - The change will bring the average dual-fuel energy bill below £2,000 a year for the first time since April 2022, saving households an average of £151 on the previous quarter. #April

In our second Insight on the UK's Review of Electricity Market Arrangements (#REMA) we look in more detail at the proposals for locational pricing and the alternatives. Locational pricing would involve splitting GB into different areas ('zones'), each with a different wholesale price. We look at what this could mean for generators, investors and customers, and whether the benefits outweigh the risks. https://lnkd.in/ehXBMvbm #electricitymarket #lmp #renewables Richard Goodfellow Matthew Williams Sophie Hiley Martin Stewart-Smith Karen Rowe Anna A.

I have already been involved in a transaction where the perceived commercial "threat" of the introduction of locational pricing de-railed a lengthy and complex negotiation of a long-term power offtake contract for a renewable generation asset in the UK. The parties simply couldn't find a way around the re-pricing risk, particularly where project financing was involved. It's hard to see larger projects being developed in future lower pricing zones without the safety net of a CfD. #energytransition #REMA

A shift to locational pricing would be an enormous change to the UK electricity market, and has implications for everyone; new and existing #generation projects, #interconnectors, and electricity consumers. We've summarised what this is and what it might for mean for you at the link below. #REMA #electricitymarket

Below is our second Insight on the UK's Review of Electricity Market Arrangements (REMA) in which we look in more detail at the proposals for locational pricing and the alternatives. As Anna set outs, locational pricing would involve splitting GB into different areas ('zones'). Each zone would have a different wholesale price, reflecting the balance of supply and demand, and the network capacity, in each location. So areas like Scotland, where there is high supply and low demand, would have a lower electricity price than the South East of England, where the opposite is true. What does this mean for generators, investors and customers? What does the benefits/risk analysis look like?