Gas storage reserves and LNG supplies will cut energy bills

High levels of gas storage and healthy liquefied natural gas supplies will lead to lower energy bills for most households in Britain at the start of next year.
The energy price cap is forecast to fall to £1,697 a year in January, according to Cornwall Insights, the energy consultancy, below the £1,717 due to take effect from Tuesday.
The regulator Ofgem raised the latest price cap by 10 per cent, or £149, for the first time since January last year in response to a rebound in wholesale gas prices amid mounting global political turmoil and extreme weather events.
Cornwall had forecast another £45 increase in the price cap to £1,762 from January. However, improved confidence over gas and electricity imports before the peak winter months and healthy storage levels have caused wholesale gas prices to fall.
Britain has become more reliant on imports of American liquefied gas since the Russian invasion of Ukraine, which also has contributed towards wholesale gas prices becoming more volatile.
The price cap is expected to continue falling during the second and third quarters of next year, according to Cornwall Insights.
Despite the forecast decline in January, energy bills remain hundreds of pounds higher than before the energy crisis, which has put millions of households under financial pressure. Energy debt has risen to a record £3.7 billion at the end of June, according to the latest figures from Ofgem. That is a £400 million increase in three months.
Craig Lowrey, principal consultant at Cornwall Insights, said that while the latest forecast would be welcome news for British households, it remained “subject to the volatile wholesale gas and electricity markets”.
“While there is hope that a renewed focus on building a sustainable domestic energy supply could eventually lower bills as we reduce reliance on volatile imports, these benefits will take time to materialise. Meanwhile, many people are facing financial difficulties right now,” he said.
The energy price cap, introduced by the government in 2019, limits the price that suppliers can charge households for each unit of gas and electricity on standard tariffs.