Information on the Energy Price Cap, February 2022

You can see a table containing these figures here.

Please note: these figures are not related to any plans Octopus may, or may not, put in place during the April price uplift - they are simply an indication of the maximum rates Ofgem will apply regionally for the April uplift of the price cap.

If you’re on a fixed tariff, the price cap doesn’t affect you. Your current rates and charges will be locked in to the end of your contract.

If you’re on a variable tariff, the price cap does affect you – but not right away. The price cap announced today take effect from April 1st. From then on, suppliers will be able to use the Price Cap as a guide for their variable tariff prices.

The price cap specifically applies to variable tariffs because these aren’t fixed against the volatility in the energy markets. Different suppliers can refer to these tariffs in a number of ways; standard variable tariff (SVT), non-fixed, etc. At Octopus our variable energy tariff is called Flexible Octopus.

If you’d like to confirm which tariff you're on, and details like your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address).

You can read more about the energy price cap on Ofgem’s website here.

As the price cap has only just been announced today, and won’t be coming into effect immediately, suppliers haven't announced any changes to their prices yet.

Right now we’re processing today's information from Ofgem and the government, and working out the most manageable plan for our customers.

As always, we'd let you know about any changes to your tariff with plenty of notice.

No: this figure is not the absolute maximum a customer could pay. If you’re affected by the price cap, the protection you receive is relative to how much energy you use.

Ofgem calculates the price cap based on the yearly usage of a typical medium consumption home (that's 2900 kWh of electricity and 12000 kWh gas per year). It represents the maximum amount Ofgem considers fair for energy suppliers to charge customers on variable tariffs.

This figure is used by suppliers to apply the price caps protection against each customer's actual usage. Put simply: if you use more - or less - energy than that typical home, your own yearly energy costs on a tariff priced at the maximum rates may be higher - or lower - than that £1,971 figure from Ofgem.

The price cap sets a maximum rate for:

• Energy units: the price suppliers can charge per unit of gas and electricity you use
  
• Daily standing charges: the price suppliers can charge per day for ongoing costs, like paying the companies who manage distribution networks, operating costs, etc.
  

Ofgem have shared that on average, the maximum unit rates are:

• 28p / unit of electricity
  
• 7p / unit of gas
  

These are averaged figures from across all regions in the UK. As certain costs vary, e.g. what transmission network fees we pay in an area, the actual maximum unit rate varies depending on region. There’re other factors too: different maximum rates for Economy 7 tariffs (which have a day and a night price) and prepayment meters.

Ofgem will publish a full breakdown of price cap rates across the UK soon, and we’ll share it here as soon as we have it.

If you’re on a fixed tariff, the first thing to know is that the price cap doesn’t affect your current energy contract. Your rates are locked in and won’t change until your tariff end date.

We’ll always email you well in advance of your fixed tariff coming to an end. We’ll let you know our currently available tariffs and prices, and you can either choose to fix your prices again, or do nothing and go onto Flexible Octopus; the tariff protected by Ofgem’s price cap. Find out more about our tariffs and the current situation in our dedicated support blog.

If you’d like to confirm your current prices and contract dates, you can see them on your online account (scroll a little way down and look at the details below your property address) or on any PDF energy statement. It’s usually on the second page, near the top of the breakdown for your electricity and / or gas charges for the period.

Everyone’s situation is so different that we can’t presume to know what’s best for you.

If you’re on a fixed tariff, the first thing to know is that the price cap doesn’t affect your current energy contract. Your rates are locked in and won’t change until your tariff end date.

We’ll always email you well in advance of your fixed tariff coming to an end. We’ll let you know our currently available tariffs and prices, and you can either choose to fix again, or do nothing and go onto our flexible product; the tariff protected by Ofgem’s price cap.

If you’re wondering what’s best, we suggest reading our in-depth guide to the current situation. It covers why prices are so high, the difference between tariffs, and what to do if you’re struggling to pay.

Though green energy is cheaper to generate, on the market it's sold at the same, higher price of gas and other fossil fuels. That's down to the way the market's set up. It's similar to how houses are sold based on the price of neighbouring homes, rather than what it cost to build. Read more about the latest in the energy market.

It's mainly set up this way because the grid always has to be balanced: the UK's energy needs (or 'demand') matched perfectly with an equal amount of power supply. The grid calls on all different types of power, from gas to renewables, to help with its crucial balancing job. It wouldn't be entirely fair to pay some energy generators less for their power when they're fulfilling the same important function. This means that the highest price ends up setting the market price. When gas prices are high, all electricity prices are too.

We’re pushing for a system in which more and more of the electrons are green ones – because the more green power in the grid, the less we need to rely on expensive, dirty gas imports to meet our energy needs at all.