The average UK energy bill is set to drop by about 7% from April, to the lowest in almost two years, as the government has shifted part of the costs for supporting renewables from the household bills to general taxation.
From?April 1 to June 30, 2026, energy prices will go down by or 7%, or by £117, ($158), for a typical household who use electricity and gas and pay by Direct Debit, the UK’s energy market regulator Ofgem said on Wednesday in its quarterly energy price cap announcement.
The UK has a so-called Energy Price Cap in place, which protects households from excessively high bills by capping the price that energy utility providers can pass on to them.
Energy bills in Britain have declined from the record highs in 2022 and 2023, but they are still about 30-35% higher compared to before the Russian invasion of Ukraine and the energy crisis that followed.
For the second quarter of the year, energy prices will drop by?£208 ($280), or by 11%, compared to the same period last year, Ofgem said.
The decline in the energy prices comes after the UK government moved most of the costs for supporting clean energy rollout out of the bills and into general taxation.
In the November budget, the government said that the Energy Company Obligation (ECO) and Renewables Obligation (RO) schemes that are currently funded through costs to the bill, would change from April 1. ECO funding will end from March 31, 2026, while 75% of renewables costs will now be funded from general taxation.
The move was expected to cut £150, or $202, off energy bills.
But the actual savings are lower, at £117 as assessed by the regulator, as networks costs have increased by £66, or $89, a year, due to the current costs of investment in upgrading energy infrastructure such as power and gas grids to help keep bills more stable in the future.
By Tsvetana Paraskova for Oilprice.com
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