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UK Energy Bills to Rise in January as Ofgem Lifts Price Cap by 0.2%
Ofgem will raise the UK energy price cap by 0.2% in January, pushing up household bills. The increase is driven by higher policy and network costs—including contributions to the Sizewell C nuclear project—despite falling wholesale energy prices.
Most British households will see higher energy bills next year after regulator Ofgem announced a 0.2% increase in the domestic price cap starting January, driven largely by higher policy-related costs.
Although the rise is modest, it marks a setback for the government, which has pledged to reduce energy costs and now faces pressure to unveil measures in next week’s budget to ease household bills.
Part of the increase comes from an additional charge of roughly £1 per month on bills to help fund payments for the new Sizewell C nuclear plant. The project is expected to cost around £38 billion ($50 billion). This extra cost comes despite a 4% drop in wholesale energy prices.
Wholesale gas and electricity prices still make up a major portion of the price-cap calculation. However, network and policy costs now account for a growing share as infrastructure upgrades continue and more social and environmental levies are added to bills.
The new annual limit of £1,758 ($2,300) for households with average electricity and gas usage is about £3 higher than the cap set for the October–December period.
($1 = £0.7639)
