Experts at Cornwall Insight have said they expect Ofgem’s price cap to drop by 1% because of lower wholesale energy prices.
Households are expected to learn that their energy bills will fall slightly from January when Ofgem announces its latest price cap on Friday.
Experts at Cornwall Insight have said they expect Ofgem’s price cap to drop by 1% because of lower wholesale energy prices.
This would result in a £22 decrease to an average bill of £1,733 a year for a typical household from January 1.
However, the slight reprieve for households is expected to be short-lived, with Cornwall saying the believe the cap will rise again from April.
Craig Lowrey, principal consultant at Cornwall Insight, said: “January’s price cap dip might look like good news but it’s only part of the picture.
“Bills are still well above pre-crisis levels and are set to climb again in April, and this time it’s not higher wholesale prices driving the rise.”
Cornwall Insight suggested April’s price cap is likely to rise by around £75 a year for an average household, based on its most recent estimates.
It said this would be “largely due to rising charges associated with the operation and maintenance of the country’s energy networks, specifically electricity transmission and gas distribution charges”.
Mr Lowrey added: “The shift to renewables will bring long-term stability and energy independence, but it’s not free.
“The upfront costs are real, and they’re landing on bills now.
“The challenge will be balancing short-term affordability with long-term resilience, and crucially making sure people understand why that trade-off matters.”
