Wholesale costs are the main component of electricity prices, accounting for roughly one third of the total bill. However, grid operators have had to increase network costs due to maintenance work and governments have increased policy related costs. As a result many suppliers are currently facing pressure to tighten electricity prices despite improved efficiency in their production process.
On average, UK households with an annual consumption of 3,800 kilowatt hours had to pay 583 British pounds in 2018 for their electricity bill. This was an increase of five percent when compared to the previous year and the highest amount between 2007 and 2018. By comparison, natural gas prices for households with an annual consumption of less than 200 gigajoules fell from 4.74 euro cents per kilowatt hour in 2017 to 4.62 euro cents per kilowatt hour in 2018. Unlike electricity bills, 43 percent of gas bills are made up of wholesale costs.
Energy prices tend to be lower for industry customers. The average electricity price for UK businesses with an annual consumption between 20,000 and 70,000 megawatts per hour was 12.81 euro cents per kilowatt hour in 2018. As with households, electricity prices for industry consumers increased between 2017 and 2018. However, costs were still lower than in 2015.
In terms of gas prices, industry customers with an annual consumption between 100,000 and one million gigajoules only paid 2.09 euro cents per kilowatt hour. More than double the amount paid by households with a consumption below 200 gigajoules.