You might be wondering why we’re all experiencing such high energy prices right now...
Why are energy prices so high?
There are many things that have contributed to rising prices.
The two main factors are increased demand for gas as the Coronavirus pandemic eased, and because the war in Ukraine has threatened supplies from Russia.
Just how much have wholesale prices risen?
This chart shows the rate at which prices have increased.
Isn’t there a way to plan for this?
You may have heard of ‘hedging’, which is when we buy energy ahead of time to get a better price. This provides some protection for our customers against rising prices, but we still have to buy energy on the open market.
Have you hedged well?
Yes. Our analysts expected the supply of energy to be reduced, so they were able to secure good prices. As a result, we have access to the energy we need to supply all of our customers for the foreseeable future.
If you’ve hedged well, why is my bill still going up?
Not all of the energy we buy can be hedged, so we still need to use the open market and buy energy at its live price. This means our variable prices have had to increase. If you’ve fixed your prices, the cost you pay per unit of your energy won’t change until your fixed term ends.
But aren’t energy companies making record profits?
That’s the electricity generators and gas producers who we buy our energy from on the wholesale market. The energy price cap limits the price energy suppliers can charge for their variable plan.
What about the energy price cap?
The Ofgem price cap limits what energy suppliers like us can charge for the energy we provide to customers on variable plans. The level the cap is set at means most energy suppliers are now selling below the cost we buy energy for. From October 2022 the price cap will be updated every three months, instead of every six months, which means prices will change more frequently.
What can I do to control what I pay?
The easiest way to avoid price changes is to choose a fixed energy plan. We always make sure our best fixed prices are available to our customers, but please remember that if you’re already on a fixed deal you may need to pay an exit fee.
What are you doing to help?
If you’re struggling to pay your energy bills, please let us know. As well as finding a payment plan that works for you, we can go through ways to bring down your bills. Plus, we’ll tell you about other organisations that can help with debts.
Find out more at ovoenergy.com/help/debt-and-energy-assistance
Some financial support is also available from the Government. You can find out more at costoflivingsupport.campaign.gov.uk