An energy crisis is sweeping the globe and the stark reality is that the crisis is real and it is not going away anytime soon. The cost of wholesale gas has risen sharply in the last year and the effects of this during 2022 have started to affect UK household energy bills primarily from April 2022 and from October 2022 a large majority of household energy bills will increase sharply once again and rises will likely continue during most if not all of 2023.
The purpose of this blog, which will focus on electricity usage and not gas usage, is not to go in-depth into the cause of the energy crisis, but to provide examples of what it may cost to use everyday household electrical items and appliances from October 2022 when the latest energy price cap rise will come into effect.
Understanding what these everyday electrical items and appliances cost to run, may help you to consider your current electricity usage habits if you are hoping to reduce your energy usage in the coming months and over the winter ahead. In a future blog post over the coming weeks I will give some practical solutions to help reduce electricity usage in the home.
I have listed a few Q&As below regarding what the energy price cap is and how it works but for a more detailed explanation of the energy price cap, the energy crisis and what help is available to homeowners please see the relevant links below
⚡️ The Energy Crisis - What Is It All About
The wholesale price of gas has soared in recent months and as gas can be used to generate electricity and a lot (around 40% at times) of our electricity is generated using gas, that affects the cost of electricity that we use in our homes.
The wholesale price has risen for several reasons, the Ukraine war, reliance on various countries for gas supplies, gas shortages which were made worse by a long winter in Europe plus more countries vying to purchase what gas supplies there are, so price rises with demand.
🧢 What Is The Energy Price Cap
The Energy price cap was introduced in the UK in January 2019 by UK energy regulator Ofgem to keep track and to put a ceiling cap on how much users of electricity and gas in the UK can be charged on variable rate energy tariffs by energy providers.
It limits the maximum cost of each unit of gas and electricity and also sets the daily standing charge households have to pay for the privilege of being connected to the gas and electrical grid (to cover things like energy suppliers administrative services and infrastructure).
The current price cap (at August 2022) came into effect on 1st April 2022 and lasts until 30 September 2022. This current price cap means a unit of electricity costs around £0.28 per kilowatt hour (kWh) which was an increase from just below £0.19 per kWh during quarter one of 2022. The price per unit of gas will increase in October 2022 to £0.15 from its current rate of £0.07.
In late August 2022 Ofgem announced that the energy price cap would rise again by 80% from 1st October 2022 which would result in the maximum unit cost of electricity increasing to an astonishing £0.52 per kWh for those households on variable tariff energy rates. That’s a rise of around 180% from £0.19 at the start of 2022 to £0.52 at the end.
Note: A kilowatt hour (kWh) is a measure of how much energy you're using per hour, your electricity provider charges by how much electricity you use per (kWh).
Energy price cap will generally affect households on a default energy tariff whether you pay by direct debit, standard credit or prepayment meter. It will generally not apply if you are on a fixed term energy tariff or have chosen a standard variable green energy tariff that Ofgem has exempted from the cap.
🧢🧢 Will There Be More Energy Price Cap Rises
Unfortunately yes and it is expected to get worse. Ofgem will now announce new energy price caps every three months so as well as the increase from October 2022 we can expect the energy price cap to change at the start of January, April, July and October during 2023.
📈 Will This Mean More Energy Price Rises
In the short term yes, it is looking like the energy price cap will rise in the January and April 2023 price cap reviews and it is not good news. It could see the price per electricity unit in the middle of 2023 rise a further 50% from the October 2022 level. The gas market will likely stay volatile during the winter months of Q4 2022 and Q1 2023 which means forecasters predict more rises as the gas supply situation remains unstable.
⤵️ When Will Prices Fall
Energy prices are currently expected to remain high throughout most of 2023 and it could be into 2024 before we see prices fall. Just like petrol and diesel costs though, after huge price increases don't expect to see the costs fall anywhere close to what they were before the increases began.
ℹ️ What Help Can I Receive / Further Information
UK Government: Energy bill help
Ofgem: the energy regulator for Great Britain
Money Saving Expert: What is the energy price cap?
Which?: Energy price cap rises to £3,549: how will it affect your bills?
♻️ How Can I Save On Electricity Costs
Every little helps and there are some things we can do around the home to help reduce energy costs such as motion sensors on lights within the home - look out for a future blog post with some tips on how we can save electricity costs around the home.
💷 Just Tell Me How Much It’ll Be To Boil My Kettle
Ok, let me give you some examples of how much it will cost to use everyday household appliances from October 2022.
Note: some of the below items and appliances have thermostats to regulate the electricity usage during normal operation - e.g. electric oven on for one hour may only be using the heating element for 40 minutes as the thermostat cuts in and out to keep the oven at the set temperature.
Below cost assumptions are also taken that the appliances will be using 100% of their rated power for the duration stated but this may not always be the real world case, for example a 9KW shower may be being used at medium setting and not at the full high setting.
The below is only a guide and many real world factors including usage and your own particular energy costs will affect the below figures. Figures are based on a unit of electricity costing £0.52 per kWh with the total cost based on the usage time shown in brackets.
3KW Kettle (3 minutes) = £0.08
2.5 KW Oven element (30 minutes) = £0.65
1.7 KW Grill element (15 minutes) = £0.22
1.5 KW Hob element - per ring (15 minutes) = £0.20
900 watt Microwave (5 minutes) = £0.04
800 watt Vacuum Hoover (15 minutes) = £0.10
60 watt Light bulb (1 hour) = £0.03
5 watt LED lamp (1 hour) = £0.003
20 watt LED garden floodlight (10 minutes) = £0.002
40 watt TV when in use (1 hour) = £0.02
100 watt office computer when in use (1 hour) = £0.05
2KW Tumble Dryer (1 hour) = £1.04
2KW Washing Machine (1 hour) = £1.04
1.8KW Toaster on full power (5 minutes) = £0.08
200 watt fridge/freezer (1 hour) = £0.10
1KW Heater (1 hour) = £0.52
2KW Heater (1 hour) = £1.04
3KW Heater (1 hour) = £1.56
3KW Immersion heater (1 hour) = £1.56
2KW Hairdryer (5 minutes) = £0.09
200 watt Games console when in use (1 hour) = £0.10
3KW Hot tub element (1 hour) = £1.56
8KW Shower (10 minutes) = £0.69
9.5KW Shower (10 minutes) = £0.82
6 x 5 Watt garden/soffit LED spots (1 hour) = £0.02
7KW 30 amp EV home car charger (1 hour) = £3.64
3KW 13 amp EV home car charger (1 hour) = £1.56
So finally let’s look at the cost of 5 typical everyday household activities
Cook Sunday Roast Beef in oven (2 hours) = £2.60
Family of 4 each taking 10 minute showers per day = £3.28
Heat water tank for 4 hours per day = £6.24
Boil kettle 6 times per day = £0.48
6 x 5 watt LED soffit / garden lights left on 8 hours per night = £0.16
Please leave in comments any other appliances you would like the usage costs calculated.