Why doesn't Ofgem provide multi-year electricity price forecasts, even though it could do so with reasonable precision?

Ofgem does not publish medium-range electricity price forecasts for public consumption, despite the feasibility of doing so—because a significant portion of electricity bills ('non-commodity' costs) is already fixed or highly predictable: only one-third of the bill reflects volatile wholesale prices, while the rest covers pre-determined charges such as grid upgrades, carbon taxes, the warm home discount, and long-term contracts-for-difference with renewable generators (fixed for 15–20 years).

What are the main drivers pushing electricity bills higher through 2030, even if wholesale energy prices fall?

Key drivers include sharply rising 'non-commodity' costs: Network Use of System charges are projected to increase from £7.6bn to £12.1bn by 2029–30 (nearly +60%), and balancing costs—from paying windfarms to curtail output and gas plants/interconnectors to ramp up—are expected to surge from £2bn to £8bn annually by 2030; industry leaders (e.g., EDF and Octopus Energy) confirm that even a halving of wholesale prices would not prevent overall bill increases, with Octopus projecting electricity prices up 20% by 2030 under current policy trajectories.

Ofgem urged to provide transparent long-term electricity price forecasts

May 26, 2026

Commentator Nils Pratley urges Ofgem to publish multi-year electricity price forecasts, highlighting that grid upgrades and balancing costs will keep bills high regardless of wholesale prices. Industry leaders warn sustained high energy costs threaten UK industrial competitiveness.

theguardian

2026-05-26

Ofgem urged to provide transparent long-term electricity price forecasts

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Ofgem urged to provide transparent long-term electricity price forecasts

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