Domesday Live

Why are energy bills so high?

Energy bills are high because the wholesale price of gas, which sets the price of most electricity too, jumped in 2021 and 2022 and has not fully come back down. Bills also include the cost of the networks and government policy costs, which have risen.

Why it happens

• Gas sets the price. In Britain, the price of gas usually sets the price of electricity. So when gas rose steeply after Russia invaded Ukraine, almost all bills rose.
• The price cap follows the market. Ofgem's price cap is reset every three months from wholesale prices. It limits the rate per unit, not the total bill.
• Networks and policy costs. Part of every bill pays for the wires and pipes, and for schemes such as support for renewables and for people who could not pay. These have risen.
• Standing charges. Fixed daily charges are about the same whether you use energy or not, so they weigh most on households that use little.