When Will Energy Prices Go Down? (Current Predictions)

When will energy prices go down and will things return to normality? Here we explain the latest predictions from Ofgem and others.

The current energy price cap is anticipated to result in an approximate 7% decrease in energy costs for the majority of households.

However, looking ahead to 2024 and beyond, it's crucial to delve into the most recent forecasts to understand what potential changes or developments might lie ahead for consumers.

Let's delve into the latest predictions to gain insight into what could be expected in the near future and beyond.

The Current State of Energy Prices

As per Ofgem, the most recent energy price cap, effective from 1st October to 31st December 2023, is set at £1,834 annually for a typical household utilising gas and electricity with Direct Debit payment.

The energy price cap, established by Ofgem, acts as a safeguard instituted by the government to regulate tariffs. This cap restricts the rates that suppliers can charge for their default tariffs and undergoes updates approximately four times a year.

Notably, the present cap follows the previous one set in July, which led to a decrease in the average energy bill from £2,500 to £2,074.

With the current price cap in effect, households can expect a reduction of about 7% in their energy bills. However, it's crucial to note that the actual bill you receive depends on your energy usage as the price cap governs the unit price, not the total bill amount.

Under the new cap, the gas unit rate will drop from 8p to 7p per kilowatt hour (kWh), while electricity rates will reduce from 30p to 27p per kWh.

Despite these adjustments, these prices remain notably higher than those in previous years, raising questions about the possibility of a return to previous price levels.

Looking ahead to 2024 and the launch of the next energy price cap, what can we expect in terms of figures and potential price fluctuations?

What Will Happen To Energy Prices in 2024? (Current Predictions)

It's essential to recognise that forecasts are inherently uncertain, and the future remains unpredictable.

According to analysis from Cornwall Insight, there's an anticipation of energy price escalations in the upcoming year, with estimates suggesting a potential increase of approximately 3.5% in typical household bills operating on dual-fuel, direct debit payment methods, starting in January 2024.

Cornwall Insight's assessment projects an expected rise in the annual energy costs for an average household, potentially reaching around £73 per month, or £1,996 annually. However, it's important to note that the ultimate bill depends on individual consumption patterns.

Additionally, Cornwall Insight foresees a subsequent decline in prices during the second quarter of the year.

The consultancy attributes the projected January increase primarily to heightened wholesale energy prices and the instability stemming from recent Australian LNG production strikes experienced in the past few weeks.

Energy Help Guides:

How Can I Reduce my Energy Bills?

While current forecasts look very bleak, there are steps you can take to reduce your energy bills to get through the current crisis.

Improved Energy Efficiency

Here are our top tips for making your home more energy efficient that are either free or low costing:

Keep your doors closed in the evening
Pull over the curtains at night
Move your furniture away from radiators and vents if safe and feasible
Run your washing machine at 30° and load it as much as possible
Hang your clothes on a clothesline or clotheshorse for drying
Ensure your fridge has a temperature of 3°C to 5°C and your freezer is at -18°C or whichever figure the manual recommends
Switch off wall plug sockets when not required
Shower rather than bathe and try to have relatively short showers. Plus, if you have a power shower, consider lowering the pressure dial
If you have an immersion heater and you are charged more in the daytime, you should schedule it to heat water at night
Don’t fill your kettle up more than you need at any one time
Reseal your windows if needed
Think about installing a door sweep

Government Support For Energy Bills

Although not adequate in many observers' views, the UK government does offer various forms of support, including the following:

Energy Price Guarantee (EPG)

The Energy Price Guarantee came to an end on the 1st of July 2023, for all households except those with prepayment meters.

It will not be applied to the standing charge rate for these customers and will save an average of £40 a year.

For more information on how the EPG will work and for additional information visit the official government help page here: https://www.gov.uk/get-help-energy-bills

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