Energy prices in the UK are reaching historical highs.
A recent move by Ofgem allowed energy companies to implement a record-high 54% price increase. And experts warn of yet another price hike in October. Prices may climb to as high as £2,300, which would represent a 130% price increase in just 24 months.
The entire UK hoped that 2022 would be the year energy prices returned back to normal. But with the Office of Gas and Electricity Markets having lifted the cap on default tariffs to £1,971, it looks like the situation will only get worse.
So why was the energy price cap increased? What does this mean for the average UK family? Are additional price increases inevitable? And with more and more people turning towards firewood and briquettes, is a wood fuel price increase just as inevitable?
What Is the Energy Price Cap?
The energy price ceiling, aka the price cap, is the highest amount your energy supplier can charge you for the default tariff based on average use.
The price cap is reviewed two times a year (in April and October) by the Office of Gas and Electricity Markets. The rate is changed in accordance with the wholesale price of energy.
Ofgem April 2022 Maximum Rate Change
The UK Office of Gas and Electricity Markets just announced that it will raise the maximum rate a supplier can charge you energy for the second time in just 6 months.
This time, the prices were increased by £693, bringing the price cap to a historical £1,971. The move was prompted by a 400% increase in the market price of energy and is aimed at helping suppliers stay afloat in challenging times.
This represents a massive 54% increase from the previous figure (£1,277), and an even more staggering 89% increase when compared to Winter 2020-2021 (£1,042). The chief executive of Ofgem, Jonathan Brearley, said that the regulator understood that the price increase will be worrying to many UK families and promised that energy companies would support their customers in all possible ways.
What is the Government Doing to Help Families?
To help households avoid energy poverty, The Treasury will be offering UK families a one-time £200 energy bill voucher in October. But this isn’t free money. You will have to repay it to the government in five yearly instalments of £40.
The government is also proposing measures that would make energy suppliers more resilient to market shockwaves. This should, in theory, allow them to offer customers prices below the price cap.
Why Are People Buying Log Burners in 2022?
With the prices of gas and electric heat increasing almost twofold over the course of 24 months, more and more Britons are rediscovering traditional wood fuels.
While warming your home with firewood or wood briquettes has always been noticeably cheaper than doing so with gas or electric heat, many people chose the latter options because they deemed them more convenient.
But now that those methods of heating are becoming prohibitively expensive, buying and installing a wood stove is more tempting than ever. The savings from transitioning to wood heat can cover the upfront costs of purchase and installation in just a single heating season.
Will Wood Fuel Energy Costs Increase in 2022?
Wood fuel suppliers aren’t immune to rises in energy costs. Manufacturing, packaging, and transporting firewood and briquettes cost a lot more in 2021 than it did in 2020. And doing so in 2022 is likely to be even more expensive.
This being said, we at Lekto are doing our very best to leverage the recent spike in demand to create economies of scale that will help us offer lower prices to customers. As the UK’s leading wood fuel supplier, we believe it is our duty to make sure sustainable, eco-friendly wood heat continues to be accessible to people all over the UK.
At Lekto, we currently sell a full pallet of ultra-low-moisture, economic Sawdust Briquettes for just £419.95. This is should be more than enough wood fuel to last most UK households for an entire year. Those searching for gas-like convenience can also purchase our next-generation Night Briquettes, which can burn for up to 8 hours and require minimal tending.
Proponents of traditional firewood can purchase 24 boxes of premium Kiln-Dried Birch Logs for as little as £210.95. Traditional firewood is easier for beginners to use and is more aesthetically pleasing. However, you can expect to pay up to £150 pounds more for it per year when compared to using Sawdust Briquettes.