Discover what's been happening in the energy sector during the first quarter of 2024. From changes in energy bills to fluctuations in electricity and gas prices, we've got the latest insights to keep you informed. Stay tuned as we break down the key highlights and their implications for consumers and businesses.
Domestic Energy Bills: In Q1 2024, domestic energy bills continued their upward trajectory, with average estimates reaching £2,577 for the year. This marks a significant 12% increase (£284) compared to 2022. Both electricity and gas bills saw notable rises, with the average standard electricity bill climbing to £1,274 (a 10% increase of £114) and the average estimated gas bill rising to £1,304 (a 15% increase of £170).
Energy Consumption Levels: Typical consumption values remained consistent, with electricity averaging at 3,600 kWh a year and gas at 13,600 kWh a year. These figures include the Energy Price Guarantee but exclude payments made through the Energy Bills Support Scheme.
Electricity and Gas Prices in Manufacturing: In the manufacturing sector, electricity prices saw a 4.4% increase between Q4 2023 and Q1 2024, reaching an average price of 20.2 pence per kWh. Conversely, gas prices decreased by 5.3% during the same period, averaging at 5.1 pence per kWh.
Crude Oil Prices: As of February 2024, crude oil prices experienced a 7.0% decrease compared to three months prior. Although prices remained above pre-pandemic levels, they were 29% higher than the 2019 annual average price.
Solar: In 2023, the energy landscape saw a significant shift as solar PV capacity surged, comprising nearly half of the total capacity. This marked a departure from the dominance of offshore wind observed in 2022. While offshore wind projects typically consist of a few large-scale installations, the rise of solar PV was characterised by a proliferation of smaller installations, particularly those under 50 kW. Notably, 2023 witnessed a surge in domestic installations, with 172,000 new installations recorded, marking the highest number in a calendar year since 2015.
Road Fuel Prices: Mid-month prices for March 2024 indicated a downward trend in road fuel prices. Petrol and diesel prices averaged at 144.7 pence per litre and 153.7 pence per litre, respectively. These figures reflect decreases of 1.5% and 7.9% compared to mid-month prices in March 2023, and are significantly lower than peak prices observed in July 2022, showing a 23% and 22% reduction respectively.
By staying informed about these trends, consumers and businesses can make strategic decisions regarding energy consumption, budgeting, and sustainability efforts in the ever-changing energy landscape. Keep an eye out for further updates as we navigate through Q2 and beyond.
Insights into Non-Domestic Energy Sector: Q4 2023 Comparisons
Delving into the non-domestic energy sector offers a nuanced perspective on the pricing dynamics and trends affecting businesses. Let's explore the key highlights from Q4 2023 and comparisons with the previous year:
Wholesale Gas and Electricity Prices
Illustrative Purposes Only (C Talbot, 2024)
Non-Domestic Energy Pricing: The non-domestic sector encompasses industries and commercial establishments, excluding household consumers. Prices in this sector are subject to variations based on fixed-price contracts, energy market fluctuations, and government schemes like the Climate Change Levy (CCL).
Climate Change Levy (CCL): The CCL serves as an energy tax aimed at promoting energy efficiency among businesses and public sector organisations. While it acts as a price signal for improving energy efficiency, its impact on businesses varies depending on individual contracts.
Energy Bill Relief and Discount Schemes: Initiatives such as the Energy Bill Relief Scheme (EBRS) and Energy Bills Discount Scheme (EBDS) aim to provide support and discounts to non-domestic consumers, reflecting in pricing data for respective periods.
Manufacturing Sector Fuel Prices: Fuel prices in the manufacturing sector witnessed fluctuations in Q4 2023 compared to the same period in 2022. Heavy fuel oil consumers experienced a notable 15% price increase, while electricity prices saw a 4.4% rise. Conversely, gas prices decreased by 5.3%, and gas oil prices saw a slight decrease of 1.2%.
Quarterly Price Trends: Examining quarterly price trends since Q4 2018 reveals fluctuations in fuel prices over time, influenced by market dynamics, regulatory changes, and industry demand.
Key Observations:
Heavy fuel oil prices surged by 15% in Q4 2023 compared to the previous year.
Electricity prices experienced a moderate 4.4% increase during the same period.
Gas prices saw a notable 5.3% decrease, offering potential cost savings for consumers.
Gas oil prices observed a marginal decrease of 1.2% in Q4 2023.
Understanding these pricing shifts provides valuable insights for businesses navigating energy costs and budget planning in the non-domestic sector. Stay informed to make strategic decisions aligned with your organisation's energy needs and objectives.
In summary, understanding non-domestic energy pricing dynamics is crucial for businesses. During Q4 2023, heavy fuel oil prices surged by 15%, while electricity costs rose moderately by 4.4%. Conversely, gas prices saw a notable 5.3% decrease, offering potential savings. By monitoring these trends, organisations can make informed decisions to optimise energy efficiency and financial resilience.
To find out if any of these changes may affect your business, get in touch with one of our consultants today for expert guidance to navigate your energy.
Source (Gov.co.uk, 2024)