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11 Jun 2019
Adam Bate Confused.com

How to beat energy price rises

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Energy suppliers will change their gas and electricity prices two or three times a year. You’ll often read in the papers that one company or another is raising its prices by a certain amount.

But what does this mean for your personal gas and electricity bills?

And how do you make sure that you are getting the best bang for your buck when paying for your energy?

We take a look at the reasons why prices rise, and how to best protect yourself to make sure you’re not overpaying for every unit of gas and electricity you use.

Are energy prices set to rise?

2018 was a bad 12 months for both energy companies and consumers, with price hikes on a record 57 different tariffs putting the average household energy bill up by around £74 per year. This represented almost four times as many rate rises as the previous year, while a combination of wholesale price increases and government levies saw 11 energy providers forced out of business.

It seems 2019 will be another year of rate rises, with the government’s cap on standard variable rate energy tariffs setting the tone with an increase of £117 following the first rate review of the year.

What causes energy price rises?

There are many factors which affect the price we pay for gas and electricity, such as wholesale costs, supply and demand, the cost of sourcing and transporting the energy, and maintenance of the infrastructure.

Instability in countries disturbed by war and natural disasters can also have a say on the price we pay for our central heating and hot water. The reason for this is that those incidents will often lead to fewer resources and lower production in these countries.

Also contributing to rising energy prices has been the introduction of the energy price cap in January 2019 by the UK government. Designed to control the increases in energy prices charged to consumers, so far energy companies have simply raised their rates in line with the cap increase each time.

How does increased demand affect energy prices?

Energy demand also makes a contribution to the rates we pay. An increase in demand from domestic energy consumers and particularly business energy consumers, including everything from manufacturing to telecommunication, and service industries to construction, puts more strain on all parts of the supply chain to push prices up .

Why do wholesale costs affect energy prices?

Raw resources, such as coal and gas – and the wholesale prices of these – play a huge role in the prices that consumers pay for energy. On both a European and global scale, prices change constantly as countries try to meet the demands of their consumers.

The prices of smaller suppliers are quickly impacted when there is a wholesale market change. And when the ‘Big Six’ energy suppliers, who supply nearly three quarters of UK households, raise their energy prices it affects the majority of our domestic energy bills.

Our reliance on traditional fossil fuels such as coal and gas is being reduced over time by the increasing use of sustainable energy sources such as solar and wind. This could be good for energy prices as this diversification puts less demand on any single resource which could mean prices remain more stable, or even start to come down as the technology to produce it becomes cheaper.

How to beat energy price hikes

When an energy company increases its prices by a certain amount, or the price cap rises by a specific amount, this doesn’t mean that your personal energy bill will rise by this value. The price increase announced is how much will be added to the average bill. Your personal circumstances may be different, for example you may live on your own in a small house, in which case your bills may be lower than the average. Or, you may live in a large, badly insulated house in which case your bills (and your price increase) may be much higher.

This is why it’s important to run a personal energy price comparison to see exactly how much you could save on your bills. If you have your energy usage from your current bill, this can be much more accurate and provide you with clarity on how much you can save.

Our reliance on traditional fossil fuels such as coal and gas is being reduced over time by the increasing use of sustainable energy sources such as solar and wind. This could be good for energy prices as this diversification puts less demand on any single resource which could mean prices remain more stable, or even start to come down as the technology to produce it becomes cheaper.

Switch energy supplier

Switching energy supplier is still the most simple and effective method of making substantial savings on the cost of your energy bills. It only takes a few minutes to run a comparison and can save you hundreds of pounds over the course of a year.

Once you’ve decided who you want to switch to, we’ll will take care of the rest for you. The switch should take around 21 days to complete, which includes a 14-day cooling off period in case you change your mind.

Make your home more energy efficient

Switching energy supplier is only part of the story of helping to cut your bills - making your home more energy efficient is important too. You can do this by replacing your old boiler, having double or triple glazing fitted or installing loft insulation. Turning down the thermostat by just one degree in temperature and making sure lights are turned off when they are not needed can have a massive impact on your energy usage.

How to switch energy supplier

If you want to cut the cost of your energy bills, switching supplier is the simplest way to save money.

To start an energy price comparison, simply click the COMPARE ENERGY PRICES button at the top of the energy switching page.

Then just enter a few more details and we’ll instantly compare prices from suppliers across the entire energy market. All you then need to do is choose the best gas and electricity deal for you, and we’ll handle the rest of your switch.

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