People in Britain will face a substantial rise in energy bills after the industry regulator Ofgem increases the cap on prices that power generators can charge. Ofgem today announced energy suppliers can charge customers roughly £139 more from October, and customers on prepayment contracts will have to shoulder a £153 raise.
Around 11 million UK households are on standard tariffs and they could see their bill increase from £1,138 to £1,277. The roughly 4 million households on prepayment meters will be hit by an even larger increase from £1,156 to £1,309.
Ofgem CEO Jonathan Brearley said people “can reduce their energy bills further by shopping around for a better deal”.
The energy price cap, introduced in 2019, limits the amount that suppliers can charge to end-customer. The headline price cap figure is based on a typical user – which is 3,100 kWh of electricity and 12,000 kWh of gas in a year.
Turning price cap into an opportunity
Critical voices are heard from Innowatts about the new price cap. Chief Technology Officer (CTO) David Boundy commented: “Sustained volatility across wholesale electricity market prices, coupled with an increasingly competitive retail energy landscape, can make risk management for energy retailers all-the-more challenging when Ofgem updates their price cap regulations.
“With over 13 million smart meters now deployed across the United Kingdom, retailers must look to leveraging billions of data points to reduce their trading exposure,” he underlined. “By taking a data-driven, bottom-up approach to load forecasting and risk management, market-participants can turn Ofgem’s price cap into a sizable opportunity lowering costs, reducing carbon and minimising risk.”
Houston-based Innowatts, operates in Europe since 2019, using meter data to segment consumption by weather, time, and base-load criteria. The company’s SaaS platform for energy providers can analyse over five billion data points every hour, helping utilities with load forecasting and grid edge management.