Domestic electricity: will the cost of electricity fall or rise?
Introduction As these cold winter months slowly turn into spring and our household electricity consumption begins to fall my thoughts often turn to the question of why electricity is so expensive and, more especially, why Ofgem's domestic gas price cap is around one quarter of the price cap for domestic electricity. For example, in January 2025 the electricity price cap rose to 24.86p/kWh along with a standing charge of 60.99p/day against 6.34p/kWh for gas and a 31.65p/day standing charge. Furthermore, in April 2025 these caps will rise to 27.03p/kWh for electricity against 6.99p/kWh for gas. How can this be? Why should a unit of electricity cost almost four times that of gas? And it seems I’m not alone in asking this question because reports from the both the BBC and Apple News have recently appeared in the media citing several reasons for this anomaly: ranging from high wholesale gas prices, the cost of subsidies...