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Energy & bills · Where a bill goes · Great Britain · Oct–Dec 2026

Where does a bill go, and what drives each part?

Mostly to buying energy and to the networks that carry it. The wholesale allowance follows gas prices: £327 in Apr–Sep 2021, £2,580 at the peak, £774 now. Networks have risen steadily to £417. Policy costs were cut to £96 in April 2026.

Evidence last reviewed 3 October 2026

1. What moved, and what is still moving

Which costs drove the cap up, and which are still rising?

Wholesale costs drove the spike; network costs have roughly doubled since 2019

Three of Ofgem’s cap allowances for a dual-fuel direct-debit household at typical consumption (2,500/9,500 kWh), £ a year, cash terms, excluding VAT. Each step is one cap period.

Great Britain average · Jan–Mar 2019 to Oct–Dec 2026
£ a year, cash, excluding VAT£0£1,000£2,000£3,00020192020202120222023202420252026£774£417£96
The wholesale allowance went from £327 to £2,580 at its peak in Jan–Mar 2023 and is £774 for Oct–Dec 2026, rising again with gas prices. Network costs moved little in the crisis but have climbed from £209 to £417 under Ofgem’s price controls for the wires and pipes. Policy costs fell from £219 to £97 in April 2026, when most Renewables Obligation costs moved to taxation. These are cash amounts.

Great Britain average · Jan–Mar 2019 to Oct–Dec 2026 · Official allowances; latest period provisional

Sources, definitions and data — Wholesale costs drove the spike; network costs have roughly doubled since 2019
Geography:
Great Britain average — Default tariffs, direct debit
Measure:
£ a year, cash (nominal), excluding VAT
Period:
Jan–Mar 2019 to Oct–Dec 2026
Status:
Official allowances; latest period provisional
Calculation:
As published by Ofgem (component lines of sheet 1c, restated on the latest consumption basis).
Compare with:
Apr–Sep 2021, before the gas price surge
Not included / breaks:
Supplier operating costs are not drawn: Ofgem restructured that allowance in July 2025, so the series has a break. Allowances are what an efficient supplier may recover, not audited spending. Cash terms.

Source: Ofgem, Energy price cap (default tariff) levels — Annex 9, levelised cap levels, sheet 1c 'Consumption adjusted levels', Other Payment Method (direct debit) (released 26 August 2026). Chart ENERGY-04.

View the data as a table
Cap periodWholesale, £/yrNetworks, £/yrPolicy costs, £/yr
Jan–Mar 2019359209103
Apr–Sep 2019420219109
Oct 2019–Mar 2020361220110
Apr–Sep 2020335221116
Oct 2020–Mar 2021265222114
Apr–Sep 2021327225119
Oct 2021–Mar 2022443225119
Apr–Sep 2022880319133
Oct–Dec 20222021320132
Jan–Mar 20232580320132
Apr–Jun 20231776337144
Jul–Sep 2023851342144
Oct–Dec 2023768344145
Jan–Mar 2024843344145
Apr–Jun 2024609333172
Jul–Sep 2024517328172
Oct–Dec 2024623336171
Jan–Mar 2025640336171
Apr–Jun 2025708334181
Jul–Sep 2025617334181
Oct–Dec 2025605356198
Jan–Mar 2026582356219
Apr–Jun 202653341697
Jul–Sep 202669041696
Oct–Dec 202677441796

Scroll the table sideways to see every column.

2. Why gas sets the price of electricity too

Mechanism — how a gas price change reaches a bill (sequence, not a quantified effect)

  1. 1

    International gas price moves

    Britain buys gas on international markets; in 2026 Ofgem attributed rising prices to the conflict in the Middle East.

  2. 2

    Gas plants usually set the power price

    Wholesale electricity is priced by the last plant needed. Research cited by ONS found gas set the GB price 97% of the time in 2021 while making 43% of electricity.

  3. 3

    Suppliers buy ahead

    Ofgem sets the wholesale allowance from prices in the months before each cap period, so changes reach the cap with a lag.

  4. 4

    The cap’s rates change

    Unit rates move with the wholesale allowance; standing charges cover the costs Ofgem allocates per customer rather than per unit used.

  5. 5

    Your bill

    Rates × the energy you use, plus standing charges, under the cap or a fixed deal.

This is why a gas price shock raises electricity bills even though gas made under half of Britain’s power: the price of every unit is set by the most expensive plant running. Contracts for Difference already pay many wind and solar farms a fixed price, which shields part of the system from gas spikes; the rest of the wholesale market still follows gas. A competing view stresses that low-carbon output lowers how often gas is needed at all, which over time reduces its influence — the two are compatible, and the balance between them depends on how fast new generation and storage connect.

3. Every part of the cap, then and now

Ofgem cap allowances, dual fuel at typical consumption, direct debit, GB average, £ a year, cash terms
ComponentJan–Mar 2019Oct–Dec 2026
Wholesale energy£359£774
Networks£209£417
Supplier operating costs£0£204
Supplier operating costs (old method)£161£0
Policy costs£103£96
Bad debt£0£52
Supplier profit allowance£17£46
Capacity Market£9£38
Industry charges£0£35
Headroom£10£18
Levelisation£0£8
Smart meter roll-out (net)£23−£7
Payment method adjustment (additional cost)£7£0
Payment method adjustment (percentage)£4£0
Adjustment allowance£0£0
VAT£45£41
Total including VAT£945£1,723

Supplier operating costs were one allowance until June 2025 and a restructured “core” allowance from July 2025, so the two operating-cost rows are not a like-for-like comparison. Some components did not exist in 2019 and show £0. Components may not sum exactly to the total because of rounding in Ofgem’s tables.

The networks line is the part Ofgem sets directly through its price controls for the companies that own the wires and pipes. Whether owning those networks publicly would make it cheaper is modelled in public ownership of the electricity networks. For what could lower each part of the bill, see the options on the energy page.

Sources and methods (4)

Method notes

  • Component allowances are Ofgem’s, restated by Ofgem on its latest typical-consumption basis; they are what an efficient supplier may recover, not audited costs.