A number of media outlets including The Financial Times, The Independent, BBC news and The Daily Telegraph, have reported that wholesale gas and electricity prices in the UK hit a five-year low at the end of 2015, referring to research compiled by ICIS.
ICIS said the causes were a mild winter and lower global commodity prices. An oversupply of gas in the wholesale market was also pushing prices lower.
Pressure is mounting on the UK’s big six energy suppliers to cut their prices in line with falling costs and Energy Secretary Amber Rudd has spoken and written to question them about whether prices are reflecting companies’ costs.
One consumer group said the firms had “run out of excuses” for failing to cut prices further but the energy companies have said they are operating in a highly competitive market
Zoe Double, Head of Power at ICIS is quoted as saying: “Current market prices for delivery two to three years ahead show that participants expect UK wholesale energy prices to remain low.”
However, she said electricity prices had fallen less than gas because there was “less spare supply capacity”.