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Electricity price predictions

MattEngineer · 2021-12-03T18:39:26Z

When the energy cap comes up for renewal I think it will rise to 26.5p per unit, any thoughts of the collective?

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Electricity, Tariffs, Monitoring, Electrics & Providers

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ChandyKris

(@chandykris)

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Joined: 2 years ago

Posts: 180

27/05/2026 5:00 pm

The spark gap seems to have narrowed this time from 4.3 to 3.6. While electricity prices are going up by nearly 5%, gas prices are going up by 27%. I thought they were still exploring various options to decouple electricity from gas prices. What changes have they made to make such a big impact. Surely, I am missing something. Not that I am complaining, as heat pumps are now more attractive from a running cost perspective.

Posted by: @jeff

↑

If the gas price falls in the next months, expect the ratio between gas and electricity unit rates to widen at the next cap, obviously unless the government make more changes

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JamesPa

(@jamespa)

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27/05/2026 5:11 pm

Posted by: @chandykris

↑

What changes have they made to make such a big impact. Surely, I am missing something. Not that I am complaining, as heat pumps are now more attractive from a running cost perspective.

I am not aware of another policy change (if there has been one it has not been publicized) . Perhaps it just reflects the market and the fact that the direct impact of the war is on gas prices. Yes electricity prices are linked to gas but maybe not 1:1?

Just a guess based on the fact that I have not heard a policy announcement, @transparent may know the facts.

This post was modified 1 hour ago by JamesPa

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Transparent

(@transparent)

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27/05/2026 6:09 pm

No, I'm also unaware of a policy change.

It's possible that the Secretary of State has got fed up with 'advice' from Ofgem or NESO, telling him that he can't just use price differentials to make heat-pumps appealing. So this could be a surprise move by him, albeit in keeping with his political aims.

I can see this from both 'sides' of the argument. I know Ed is upset that he seems to be thwarted in his desire to provide cheaper energy to the mass of working people. He believes this is directly related to the need for more renewable generation.

It matters not whether I agree with him on politics or strategy.
I'm simply observing that a sharp increase in the price of domestic gas can be readily explained by following what he's been saying publicly.

I'm also going to assume that DESNZ can't mandate one price rise for domestic gas consumption, and a different one for commercial use. In both cases, the gas is being bought from sellers in the same wholesale market.

Conveniently for the Secretary of State and NESO, that raises the price for electricity generated by Combined Cycle Gas Turbine plants (CCGT).

CCGTs would have to cease operation in order to met the NESO target for decarbonisation of the grid by 2030 (or 2035 if you read other announcements).

It's also CCGTs continuing to run in 'Combined Cycle' mode which underpins low cost electricity after midnight, as offered by the classic Cheap Rate tariffs. They might have to operate at a loss to achieve that, but it's viable to do so if it means the generation plant doesn't drop out to Open Cycle mode.

In this instance, the rise in the international price of gas has conveniently played into the hands of the UK Secretary of State for Energy. He's unlikely to ignore that opportunity.

This post was modified 17 minutes ago by Transparent

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