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

Households are grappling with rising energy prices and new research shows Britons pay some of the highest electricity costs of any developed country.

The average home in the UK pays around £2,074 on their energy bill, around 80 per cent of which is regulated at variable rates by regulator Ofgem’s price cap.

Households in Britain pay more for energy than those in most developed countries, according to the 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 ranks 10th for gas prices.

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

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

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

In France, for example, the government banned energy companies from raising prices by more than 4 percent in 2022, or more than 15 percent in 2023.

Source: Utility Bidder

Both electricity and gas are so cheap in Argentina because of taxpayer subsidies on the energy price.

The UK does have a price cap for energy, both for gas and electricity. The government has also introduced energy assistance schemes, including £400 rebates for most households and the Energy Price Guarantee, which now limits bills to £3,000 per year per home.

The Utility Bidder’s survey only looks at the price of gas and electricity consumed and ignores fixed charges – this would likely push Britain higher in the rankings.

What’s next for UK energy prices?

Experts think the average energy bill with a price cap will remain at around £2,000 a year until March 2024 – the most recent forecast available.

Cornwall Insight analysts believe the price cap will be £1,975.70 per annum from October to December 2023, then rise to £2,044.96 from January to March 2024 due to higher energy demand in winter.

Will the energy bill go down?

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

The big question for many bill payers is when the energy bill will go back to a lower level.

Unfortunately, that may not happen for many years.

Cornwall Insight has said energy prices may not return to those sorts of prices until the end of the decade.

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