Energy Price Comparison in United Kingdom

The latest statistics on international domestic energy prices by DESNZ cover the second half of 2023 and reveal that electricity prices in the UK were more expensive than in any other EU country whereas the price of the gas is the lowest.

According to a recent estimate, fuel-poor households amount to 13% of households in England, 20% in Scotland, 14% in Wales, and 24% in Northern Ireland. Nowadays the amount of energy produced by using renewable sources is increasing. However, the cost-benefit is not transferred to the households. The higher cost ratio of electricity to gas retards the UK‘s decarbonization efforts compared to other European countries. Increased expenses on electricity can negatively impact the adoption of new technologies like electric vehicles, heat pumps, and other electric-based clean technologies.

Key insights from the latest data

The electricity price hike faced by household consumers of the UK in the second half of 2023 is higher than any of the 27 EU countries. It reached 0.36 euros per KWH (including all taxes and levies).

  • Among the European countries, the UK stands at the 9th least expensive country in gas price.it is only  0.08 per KWH
  • The use of renewable energy sources accounted for 47.3% of electricity generation in the UK. However, the cost-benefit is not transferred to the users.
  • One reason for the price hike is the carbon tax imposed on electricity but not on gas.
  • The ratio of the cost of electricity to the cost of gas was 4.7 times the price of gas per KWH compared to 2.5 times in the EU.

UK Electricity price is higher than other EU Countries

The consumer price of electricity in the UK has been increasing at a faster rate compared to other EU countries. But the price of electricity stood at 0.36 euros per KWH  for medium households. In 2023 the contribution of renewable energy increased and the demand for gas dropped to levels that were present at the time of 1970. Renewable sources of electricity like wind created a boom in the UK. The market price of electricity is determined by factors such as the rate of fossil fuel.

Upcoming governments of the UK have to reform the policies so that additional levies are removed and to close the gap between gas and electricity. This will create an impact on competence and environmental commitments towards the people. The goal is to create an energy-affordable for the consumers of the nation. This could help reduce the money spent on staying warm within their households.

Energy Bill Components

The price cap from July to September consists of the following components:

  • Wholesale cost of energy: 30%
  • Network Costs: 23%
  • Operating Costs: 14%
  • Policy Costs: 12%
  • VAT: 5%
  • Assumed Supplier Margin: 5%
  • Other Costs: 4%

Martin Lewis’ Guide to Finding the Cheapest Gas and Electricity Deals in 2024

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