Top 5 questions on energy prices answered
Given the current concern about energy company’s going bust, here is a list of the top 5 questions people ask about the current energy crisis.
I’m worried there’s not enough gas?
You don’t need to be. While global wholesale gas prices are currently high we are confident that the UK’s security of energy supply is secure now and over the winter.
Am I going to be left without power if my supplier goes bust, or do I have to find a new supplier myself?
No you don’t. Even if your supplier stops operating, Ofgem – the independent energy regulator – will automatically switch you onto a new supplier so there will be no interruption to your supply of energy.
It isn’t unusual for energy suppliers to exit the market so there’s a well-rehearsed system in place to protect households and ensure your gas and electricity keeps running.
If I join a new supplier, aren’t my energy bills going to increase?
Customers of failed suppliers who are switched to a new supplier are protected by the Energy Price Cap.
This is a government scheme which protects millions of people from sudden increases in global gas prices and limits the amount an energy supplier can charge those on default or standard variable rates.
Suppliers cannot charge customers of failed suppliers more than the level of the price cap.
Major energy suppliers also purchase much of their wholesale supplies many months in advance, giving protection to them and their customers from short-term price spikes.
We also have numerous other schemes available to support vulnerable and low-income households including the Warm Home Discount, Winter Fuel Payments and Cold Weather Payments.
Is the Energy Price Cap going to massively increase this winter?
The Energy Price Cap is reviewed twice a year based on the latest estimated costs of supplying energy and it was announced in the summer that from 1 October, the cap would rise due to higher wholesale gas prices.
However, the next time the price cap is due to be updated is April 2022 which means customers who it protects needn’t worry about it increasing before then.
Why don’t we store more gas in the UK?
Gas storage capacity has little bearing on the price of gas. Some other countries do store gas to ensure their own security of supply, but the UK benefits from having access to a highly diverse and secure sources of gas from the North Sea and reliable import partners like Norway.