Utility expert gives his view on lowering energy price caps

Utility expert Grant McKenna, Managing Director of The Apertus Group, has given his view on the new Ofgem price gap that will apply from April, with the guide price for typical annual dual-tariff use falling to £1,690, a decline of 12.3% and a massive decline from the £3,100 cap in April last year.

Prices have fallen due to a mild winter reducing demand for wholesale gas across Europe and the UK, as well as high supply saturating the market. A further drop in the cap is projected in three months, to an estimated £1,500.

Grant hailed the reduction in energy prices but warned that further reductions are likely to be minimal and that we may have reached a new normal. The War in Ukraine is continuing, and while the UK has found alternatives for its gas supply, it is still heavily reliant on a variety of import sources and prices are unlikely to reach the pre-war lows of 2020-21.

Grant commented; “While this is great news for consumers, businesses aren’t affected by the consumer price cap and will still need to procure their energy themselves or through a broker. Business owners may be locked into contracts agreed when prices were high, unable to take advantage of the falling wholesale prices. That said, the overall trend of lower prices is still something to celebrate.

“The long-term solution to higher prices is an increased prevalence of low carbon and renewable energy options, reducing reliance on gas. However, renewable technologies are still maturing, and there are concerns around the speed and nature of their implementation affecting people’s everyday lives, so we need the current market to stabilise in the short and medium term too. This new cap is an important step in the right direction.”

Regardless of when your business contract expires, Apertus Group will gladly spend an hour reviewing your utility bill to ensure you’re getting a good deal, free of charge, no obligation. Visit our website at apertusgroup.co.uk