Which countries will see their electricity prices fall the most over the next five years?
What the article means for consumers in the UKThe electricity industry’s share of the UK’s electricity supply has dropped by 1.2 per cent to just over 13 per cent, but the sector’s share has been rising steadily, rising from less than 4 per cent in the late 1980s to almost 7 per cent now.
That’s due in large part to a combination of policies aimed at encouraging use of renewable energy sources such as wind and solar, as well as the installation of new energy storage, such as pumped hydro.
Energy supply will fall the furthest in the east Midlands and Yorkshire and the Humber.
This is because they are the regions with the highest demand for the gas-fired power stations that supply most of the electricity in the country, with an average of more than 4,000 megawatts.
However, the rise in gas-powered power stations has slowed down, with the amount of gas currently being used in the system falling by almost 50 per cent between 2013 and 2016.
This was mostly due to lower gas prices in the last two years, but also to the expansion of gas-free generation, with a record number of gas turbines being built.
This has had a significant impact on the power station industry’s capacity to meet demand, with more than 500,000 MW of capacity being built between 2011 and 2016, a drop of more 50 per the previous year.
The UK’s new energy efficiency standards will see some of the biggest falls in power prices over the course of the next decade.
They are due to come into force in 2019, but have already been welcomed by consumers, with average electricity prices falling by less than a penny per kilowatt hour (kWh) over the first year of the new standards.
This will mean that the price of electricity in most parts of the country will fall by around a third, as demand for energy falls and energy costs fall.
However, as energy costs are rising, the UK economy will also be hit harder by the cuts.
Electricity demand growth is expected to slow from around 9 per cent a year to around 4 per year by the end of the decade.