What happens to UK electricity prices in 2023?

Cornwall Insight’s prediction of a rise in the energy price cap to £3,582 a year from this October (a rise of 82%), and a further rise in January 2023 to £4,266 (a rise of 20%), hit the headlines hard yesterday, with the Daily Mail even predicting widespread blackouts this Winter, a story that has zero credibility given the evidence that the UK has its own supplies of gas and a strong long term contract with Norway for the remainder of our gas needs. There were no media stories regarding Cornwall Insight’s predictions for March 2023 and the remainder of the year, mainly because, I suspect, the hysteria value in that data is relatively low.

Cornwall Insight has predicted a further rise in the energy price cap in March 2023, to around £4,400 (a 5% increase), and then in June 2023 the energy price cap reduces to around £3,750, and the prediction for the rest of the year is a stable energy price cap around £3,700. So the average price of electricity throughout 2023 will be around the 50p per KWh mark according to these forecasts. It’s quite important to keep an eye on the forward price of electricity and gas, simply because this information could prevent you getting locked into a fixed deal which is too expensive and there are many such deals available from all the energy suppliers in the UK, who are more than happy to exploit consumer ignorance.

So, will we have blackouts this Winter as predicted by The Daily Mail? Limited power outages are possible due to the extortionate price of electricity being charged by coal fired power stations. Last year Drax were charging up to £5,900 per MWh (£5.90 per KWh) to supply electricity from its recently un-mothballed plant. Also, Norway has stated that it may not be able to share electricity with the UK via its interconnectors when water levels are low at its hydro power plants. These are concerns, but relatively minor when compared with places such as Germany and Italy who rely heavily on Russian gas, which has been cut by 80% compared to last year. Will the price of electricity in UK stabilise around 50p per KWh in 2023? It’s probable that we will see the energy price cap start to fall in 2023, and, it’s also possible that the hated standing charge could be binned as it’s causing a lot of negative press for Ofgem. Of course predicitions can be wrong and hundreds of thousands of people will be happy to fix their prices at the 70p per KWh mark (or higher) just for the peace of mind that brings. Personally, I don’t have the cash to fix, so I’m stuck with the standard variable tariff and the comforting thought that the Government will have to make further interventions to keep electricity affordable for the masses.

The electricity price rise in January 2023 will be around 20% and the energy price cap will rise to £4,266 a year

Cornwall Insight

Leave a Reply

Your email address will not be published. Required fields are marked *