Energy price cap per kwh 2022: what is Ofgem rate from October - how much will electricity and gas bills rise?
To help combat soaring energy prices the government is giving all UK households £400 off their energy bill
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Energy discount payments will be available to all UK households this October and in Northern Ireland from November. The £400 grant will help ease the pressure, but prices are still expected to be twice as high as last year.
So how much will energy prices be? Here’s everything you need to know about the energy price cap and how much it has increased per kilowatt (kwh).
What is the energy price cap?
The energy price cap was created to regulate the energy sector.
It stops energy companies from charging excessive bills and making huge profits.
It launched in 2019 and gives energy suppliers a cap on how much they can charge customers on their tariffs.
The cap was originally updated every six months, but with the soaring cost of fuel, this has been shortened to every three months, meaning household bills are regularly rising.
How does the energy price cap work?
The energy price cap gives energy suppliers a limit on how much they can charge their customers.
These prices are calculated by each kWh of electricity and gas the household has to pay.
There are also standing charges, which is a fixed daily fee to supply the household with energy, even if they do not use it.
There can be regional differences, there currently is no energy price cap in Northern Ireland.
What is the energy price cap for October 2022?
Ofgem have announced that the energy price cap will see a hike of 80% in October.
On 1 October the cap will increase from £1,971 to £3,549.
To meet the soaring prices the government will be be giving every UK household £400 off their energy bill, however costs are still substantially higher than that of last year.
They are also bringing in an Energy Price Guarantee that will see the average UK households bills sit at around £2,500.
Lewis said: “THERE IS NO £2,500 CAP ON ENERGY BILLS. Instead the new 1 Oct guarantee, like the old caps, limits - Daily charge (28p gas, 46p elec) - & Unit rates (10p/kWh gas, 34p/kWh elec) So use more, pay more. £2,500 is just what someone with avg use’d pay.”
What is the Ofgem price cap in kWh?
The price a customer will pay in kWh will depend on their tariff, but due to measures brought in are cheaper than previously anticipated.
After the government’s Energy Price Gurantee and Energy Bill Support Scheme the overall charges have fallen lower than previously predicted.
The average daily standard charge for gas will now be 28p and electricity 46p, whilst unit rates per kWh sit at 10p for gas and 34p for electric.
How much will energy prices rise?
Ofgem have declined to offer predictions for January’s price cap as the market is “too volatile”.
However, consultancy firm Cornwall Insight has predicted that the cap could peak at £5,341 in April 2023.
Could I end up paying more than the price cap?
The price cap is an estimated cost based on the average UK household and is not a cap on your bills.
Ofgem have explained that the price cap is “not a cap on customers’ overall energy bills, which will still rise or fall in line with their energy consumption.”
They explain: “The price cap is a cap on a unit of gas and electricity, with standing charges taken into account.”
This means that if you use more energy than the average home, your costs end up much higher than the cap has predicted.
What support is available?
In response to the rising energy prices the government will be giving every household in the UK a £400 payment that will go towards energy bills.
Households will receive £400 off their energy bills from October, with the discount made in 6 instalments.