In recent years, the market for gas and electricity has fluctuated wildly, as prices rise, and the different providers compete to try and offer the best deals, and court your custom. In previous years, customers have seen the price for their newly setup gas and electricity usage rise at a faster rate than their average income, leaving household finances stretched to breaking point.
This has caused concern in many households, as the cost of running their heating, and using electric, has started to become unaffordable for those on a lower income, or retired people who are unable to meet the newest the costs required. In 2017, many households are looking to the gas and electricity prices forecast to define where they will stand if the trends continue.
The gas and electricity prices forecast doesn’t provide the cast iron certainty that most people desire, but it can aide in the evaluation of just how much energy they will be able to afford. With the changing trends in the prices made available for energy usage, the market can seem like a hard place to find out where costs will be increasing, and where any decrease is found.
What set’s the price for energy?
When looking at the gas and electricity prices forecast, it is important to consider what sets the overall price for energy, and why the prices are increasing in some sectors, but have the chance at changing in others. The demand for energy is the determining factor of cost, yet the fact that each and everyone of us is dependant on energy as an essential means that it can easily feel that the ball is firmly in the court of the suppliers, rather than the consumers themselves.
Generally, the higher the demand there is for energy, the higher the cost will be. Looking further into the future, it is expected that there will be an average increase in demand of 35% by 2040, indicating that over the next 20 years, the price of energy will see a sure and steady rise.
There are also a number of further factors influencing the price of energy consumption, one of which is the cost of transporting energy to where it’s needed. As with demand, the cost of transportation is predicted to increase by up to 15% for electricity, and 6% for gas.
Unfortunately, the higher the cost of transport, the bleaker the gas and electricity prices forecast looks for the future.
Along with changes in the cost of the energy, as well as differences in government policy and profit margins, there is a lot of room for changes in energy prices in coming years.
Electricity vs Gas: A different forecast?
Electricity and gas are both placed under the same bracket of ‘energy’, but the acquisition of the two is different, and this is reflected in the price forecast itself. the price of oil and gas changes almost constantly In the global marketplace, the price of oil and gas changes almost constantly; something that isn’t always felt directly in monthly bills. As the world becomes less reliant on gas and coal, alternative energy sources become more available, it is possible for the demand to go down, and, subsequently the overall price.
In terms of electricity, the demand is rising, and with many of the UK’s electricity plants shutting, the prices have seen a resultant rise. While gas prices have gone up and down fairly frequently over the last few years, electricity has, for the most part, only been going up. Between 2009 and 2014, the cost of electricity rose by around 20%, while for many providers, the cost of gas has not increased at the same rate of inflation.
The forecast predicted for 2017
In late 2016, the prices for gas and electric during 2017 in the UK was expected to see a rise of up to 5%; a continuing trend from the considerable increases witnessed in the second half of 2016. As the prices for raw resources is currently increasing, so does the price paid by the consumer, with little hope of reprieve. This can be easily seen in energy providers that are increasing the costs of their cheapest energy tariffs, raising them to a rate that almost matches the price of standard tariffs on offer. As recent as April 2017, the market was hit with a big increase in energy, with some providers increasing their costs to up to 10% in total.
There is one potential change to the market that could see energy prices increase overall, but also save around 70% of UK customers energy costs; an average of around £100 a year on their bills.
The energy price cap, which was proposed, but has not yet been implemented, aims to remove the substantial gap that has arisen between the highest priced standard tariffs, and the cheap energy deals that are offered by some providers. An article published by the Guardian in July 2017 looks at what the price cap could mean for customers in the UK, and how it will impact the predicted forecast for 2017, and the future of energy prices as a whole.
Compare your energy sooner rather than later
Due to the expected forecasts, the trend of rising bills, and the uncertainty that surrounds the possible price cap, there is a sudden urge to get the best prices possible today. With the prices believed to increase considerably in the upcoming years, the cheapest deals on the market, which have a habit of changing regularly anyway, may not be around for long. Cheaper fixed energy tariffs have the potential to knock hundreds of pounds a year off current energy bills- all within a couple of minutes.
Finding a lower price now for your gas and electricity will help to soften the financial blow of increasing prices, that are expected to be seen across the board. With 100’s of different energy suppliers in the UK, despite the price fluctuations, it is likely that you will find a more affordable energy provider for your family’s needs. For expert energy comparison, My Energy can help you stay on top of your energy bills, and get you the very best deal on offer.