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Price watch

Energy prices are increasing

An illustration of electricity pylons in a rural setting, with wind turbines on a hill in the background.

You’ve probably seen in the news today that Ofgem, the energy regulator, has announced that the energy price cap will increase to its highest ever amount. Read more about what that means for you.

Energy prices will increase on 1 April

The wholesale cost of energy has increased dramatically. It’s quadrupled in the past year, so we’ll need to increase our prices. We’ll send you an email later this month with your new rates, but it’s likely that we’ll increase them in line with the new energy price cap.

We can help you if you’re worried about paying your energy bills

We know this is a worrying time for many people and we'll provide extra help if you’re concerned about paying your bill.

This could include changing the way you pay, like asking us to install a top up meter, which can make it easier to budget. Or you can apply to make weekly or fortnightly payments, or arrange to have your energy bills paid straight out of your benefit payments, through Fuel Direct.

We can also help you do a financial assessment with one of our partner organisations like Citizens Advice or StepChange. The Bulb Energy Fund offers advice and financial support to eligible members who need help with their energy costs. Applications will open in spring.

We can help you install household energy efficiency measures through the Energy Company Obligation (ECO) scheme, and offer tailored advice to reduce your energy usage.

The Warm Home Discount is a government scheme which gives people receiving certain benefits a payment of £140 towards their winter electricity bills. It’s paid for by energy suppliers. This year’s scheme is almost full, but you’ll be able to register your interest for next year’s scheme in the coming months.

You may be able to access extra support

The government has announced measures to help people with the rising cost of living, including a £200 discount on energy bills in October, Council Tax rebates, and allowing more people to apply for the Warm Home Discount. We’re working through what this means for Bulb members and will provide an update soon.

In the meantime, you may also be able to access the Household Support Fund - a small grant given out by local authorities to help vulnerable households pay for food, clothing and utilities. Contact your local authority to ask about any funding that’s available to you. You can also search for other support using the grants and benefits calculator by Turn2us. We’ve written more about finding independent debt advice and financial support in our Help Centre.

Wholesale costs have increased dramatically

The wholesale cost of energy has quadrupled in the past year and remains volatile.

A chart which shows the breakdown of a typical energy bill. Wholesale costs make up 35% of the bill.
Source: Ofgem. Notes: An estimate of the different costs that make up an average dual fuel bill for a typical domestic customer, accurate as of August 2021. You might notice the chart doesn't add up to 100. That’s because we've stuck to nice, round numbers.

This increase in wholesale energy prices is being driven by the cost of gas. The UK is still dependent on gas-fired power plants for a significant chunk of electricity generation, and so when gas costs are higher, electricity costs are too.

There are a number of reasons the price of gas rose to such high levels. Global weather, including the cold winter we had in Europe last year, and heatwaves in Asia, contributed to low gas storage levels in the UK and around the world. There have also been ongoing issues with supplies of gas from Russia. All of this meant that both gas storage, and gas supply, were extremely low. So, the cost of gas rose.

Since the start of this year, wholesale prices have started to fall a little, but they are still at extremely high levels.

You might wonder why this affects our energy prices when Bulb supplies renewable energy. At the moment, there is only one price for gas or electricity in the UK. There aren’t separate markets for green and non-green energy sources. The price is determined by what people will pay for energy at a particular time, regardless of the source. So, when the cost of electricity produced by burning gas goes up, so does the cost of electricity from wind, solar and all other green sources.

Bulb is operating as usual in special administration

We want to reassure all Bulb members that we’re operating as usual while in special administration. Your credit balance and energy supply are protected. The team is here, working as normal and ready to help.