Bills are also way above where they were before Russia invaded Ukraine two years ago, causing turmoil on global energy markets.
During January, domestic end-user electricity prices averaged 29.08 c€/kWh (euro cents per kilowatt hour) in France and just 22.04 c€/kWh in Spain. In the UK, the average was up at 40.73 c€/kWh – some 62pc above the European Union average.
In the US, while there is variation from state to state, average domestic electricity prices were the equivalent of just 16.27 c€/kWh last month. This at least partly reflects America’s success in transforming itself from a major importer to a major exporter of energy, a change driven by the impact of the fracking revolution on US oil and gas industry output.
Back in 2020, the last full year before signs of escalating tensions between Russia and Ukraine started spooking global energy markets, UK electricity prices averaged around 27.15 c€/kWh – a third lower than now.
Lingering high energy costs are a major reason why UK inflation remains at 4pc, double the Bank of England’s target. The comparable figures in the US and eurozone are 3.1pc and 2.8pc respectively, reflecting much lower electricity costs.
One reason UK electricity is so expensive is that wholesale energy costs – which have fallen sharply since the height of the Russia-Ukraine conflict – make up just half of the average household gas and electricity bill. Along with VAT at 5pc, and energy companies’ (relatively modest) profit margins, UK customers also pay hefty “policy costs” and even larger “network costs...
From April, households using an average amount of energy will face an annual bill of £1,690 for their combined gas and electricity – down from £1,928 between January and March.
Ofgem’s decision to lower the household energy price cap by 12pc means a saving of £238 a year for the typical household. But given that the price cap is set on a quarterly basis, with this newly announced level in place until the end of June, it makes more sense to think of an average saving of around £20 a month.
And while gas and electricity bills will fall for around 29m households from the start of April, the actual amount you pay still depends on how much you use, as the cap is on unit rates, not on your total bill.
For all the positive headlines, though, electricity costs in the UK remain extremely high by international standards – bad news not only for households, but also for British manufacturers.