You might have seen in the news recently that lots of suppliers are putting their prices up because the cost to supply energy has been rising. At Bulb we always hold off on putting our prices up for as long as we can. Unfortunately, we do now need to increase our prices. In this post, we explain what this means for energy bills and what’s behind the changes.
Our rates are going up on 19 April
We’re increasing our electricity and gas rates, along with our daily standing charge. A typical home (as set by Ofgem, the energy regulator) using both electricity and gas will see an increase of £91 a year.
We’ll be in contact with all our members individually between Wednesday 17 March and Friday 19 March to explain what the changes mean for you.
For current Bulb members, all rates will change on Monday 19 April. We don’t do exit fees, so any member who is unhappy with the new rates can leave at any time without penalty.
People who switch to Bulb from Monday 29 March will be on the new rates once their switch completes. Members with traditional top up meters will be on the new rates from Monday 19 April. You can look up the new rates for your area by getting a quote on the Bulb website.
Bulb is below the energy price caps
After these changes, Bulb will be below the energy price caps, which come into force on Thursday 1 April. While our standing charge is going up, we'll be below the cap and around the average for a supplier. Overall, Bulb prices are £81 below the ’Default’ energy price cap, which limits the annual cost of energy for people who pay by direct debit. And for Pay As You Go members, Bulb prices are £9 below the ’Prepayment’ price cap, which limits the cost of energy for people who top up.
What's behind the changes
Since our last update in September 2020, the cost of supplying energy has increased significantly. Wholesale costs are now 31% higher than they were in September when we last changed our prices.
Weather is the largest driving force behind these changes. In the autumn, while temperatures were mild, wholesale costs were relatively stable. But as the winter kicked in, both Europe and Asia have experienced cold spells driven by the Polar Vortex, a freezing circulation of winds from the Arctic Circle. Cold weather in Europe means we’ve been using more gas than normal to heat our homes. At the same time, it’s been cold in Asia and shipments of Liquified Natural Gas (LNG) have headed there rather than to Europe. The combination has meant gas storage across Europe is depleted. Storage levels are 24% lower today than they were at this point last year. The cost to buy gas is up as a result.
The cost of electricity tends to follow gas (because significant amounts of electricity are still produced using natural gas). On top of this, it’s been less windy than usual for this time of year, meaning wind farms have produced less electricity than expected. The cost to buy electricity is up too.