UK domestic electricity prices

February 1, 2002

		The average household bill* in the UK is now £248 per annum which is down £116 in real terms since the industry was privatised in 1990. *based on a customer supplied on a Domestic Standard tariff and consuming 3,300kWh per year by the lead supplier in each Public Electricity Supplier area Comparing April prices over the last decade, the cost of domestic electricity – after allowing for inflation – has fallen by 32 percent. The typical household now pays 71 pence per day (including VAT) for all its electricity needs in the home; about the same as two pints of milk delivered to the doorstep, or a large loaf of bread. Customers who shop around in the competitive electricity supply market can expect to make savings of up to a further £30 on their bills depending on payment method and consumption level.
£364 April 1990	£248 April 2001

UK industrial electricity prices

The Electricity Association also tracks prices to customers in the industrial sector. In order to ensure that calculated results are consistent in methodology, comparable over time, and to act as a basis for comparison with other countries, three benchmark loads are used. Each benchmark has its own defined levels of maximum demand and load factor to give a standardised consumption pattern. The benchmarks are as follows:

Benchmark	Maximum demand	Maximum consumption (MWh/year)	Annual load factor*
A	500kW	1,752	40%
B	2.5MW	8,760	40%
C	10MW	52,560	60%

* load factor is defined as the ratio of the average load, during a specified period, to the maximum load (maximum demand) during that period. Using these models and historic tariff and contract prices, we have compiled a table of final-user industrial prices.
Annual Average Results

	1989/ 1990¹	1993/ 1994¹	1994/ 1995	1995/ 1996	1996/ 1997	1997/ 1998	1998/ 1999	1999/ 2000	99/00 on 89/90 (Real Terms)
A	4.67²	5.67²	5.23	5.12	4.79	4.53	4.50	4.43	-33.1 %
B	4.52³	n/a	4.54	4.51	4.29	4.12	4.10	4.04	-36.9 %
C	3.92⁴	n/a	3.99	4.03	3.91	3.68	3.69	3.66	-34.1 %
RPI⁵	117.4	141.5	145.4	150.1	153.7	158.8	163.8	166.4	–

1) Source: Electricity Association’s International Electricity Prices Surveys (IEP).
Averages for 1989/90 include data not published at the time because of the privatisation process.
2) Tariff prices (tariffs were generally applied until March 1994).
3) Tariff prices (tariffs were only applied to this type of load until March 1990).
4) Special-terms prices (such terms were only applied until March 1990).
5) Retail Prices Index.

International Electricity Prices

The Electricity Association also carries out an annual survey of international electricity prices, to provide an indication how UK prices compare with European and world electricity prices. Each survey is a snapshot of prices at 1 January. The results take several months to compile and the last results available are for the survey dated 1 January 2001. Following below are highlights and press release extracts from the launch of the survey’s results.
UK Electricity Still Among EU Cheapest After Further Prices Falls

Domestic power prices are the fourth lowest among the EU member countries, as detailed in the new edition of the EA’s annual worldwide comparative survey, International Electricity Prices. Despite the strength of sterling against the Euro, the survey shows that prices for a typical domestic customer in the UK have fallen 9% in real terms since the previous survey, to 7.51 pence per kilowatt hour. This means that UK customers enjoy prices up to 42% cheaper than in other parts of the EU.

In the industrial market, prices under contract are also good value. Prices for a typical medium-sized industrial user are 3.95 pence per kilowatt hour, compared with 6.6 pence in Italy, the most expensive in Europe.