How much do British households pay per unit of energy consumed compared to the rest of the developed world?

How much do British households pay per unit of energy consumed compared to the rest of the developed world?

  • Households are grappling with inflated gas and electricity costs
  • How does the UK rank when it comes to energy prices across the world? 

Households are grappling with soaring energy prices and new research shows Britons pay some of the highest electricity costs of all developed countries.

The average UK home pays around £2,074 for their energy bills, with roughly 80 per cent on variable-rate tariffs regulated by the price cap of regulator Ofgem.

Households in Britain pay more for energy than those of most developed nations, according to switching service Utility Bidder.

For electricity, the UK is the 20th most expensive country out of the top 27, Utility Bidder said, while the country is in 10th place for gas prices.

Source: Utility Bidder

Electricity in the UK cost £0.33p per kilowatt-hour (kWh) when Utility Bidder worked out its comparison, with the most expensive country – Italy – charging £0.46 and the cheapest, Argentina, charging just £0.02.

Meanwhile the UK price of gas was around £0.07 per kWh. The least expensive country for gas was Argentina, at £0.002p per kWh, while the highest prices were in the Netherlands at £0.39p.

Energy prices vary so much between countries due to a cocktail of factors, including how much power that country can generate independently and government policies on gas and electricity costs to consumers.

For example, in France the Government banned energy firms from putting up prices more than 4 per cent during 2022, or more than 15 per cent in 2023.

Source: Utility Bidder

Source: Utility Bidder

Both electricity and gas are so cheap in Argentina due to taxpayer-funded subsidies on the price of energy.

The UK does have a price cap on energy, for both gas and electricity. The Government also brought in energy help schemes including £400 discounts for most households and the Energy Price Guarantee, which now caps bills at £3,000 a year per home.

The Utility Bidder research only looks at the price of gas and electricity consumed and ignores standing charges – this would likely pump Britain up the league table.

What is the future for UK energy prices?

Why are energy bills so high? 

Since coming out of the pandemic demand for gas has gone through the roof, but supply has struggled to catch up. It has sent prices soaring and pushed up the cost of gas and electricity for both households and businesses.

This has been compounded by Russia’s invasion of Ukraine, which led to price hikes.

Experts believe the average price-capped energy bill will stay at around £2,000 a year until March 2024 – the furthest forecast available.

Analysts at Cornwall Insight believe the price cap will be £1,975.70 a year from October to December 2023, then rise to £2,044.96 from January to March 2024 due to higher winter demand for energy.

Will energy bills go down? 

Whether energy bills are £2,000, £3,000 or £4,000 a year, they are still massive compared to the £600-£800 yearly bills most homes paid for energy pre-2021.

The big question for many billpayers is when energy bills will go back to lower levels.

Sadly, that might not happen for years.

Cornwall Insight has said energy prices might not go back to those sorts of prices until the end of the decade.

Elsewhere, energy experts at Auxilione think energy bills will not drop below £1,000 a year for the foreseeable future.