Energy prices set to rise after Ofgem raises price cap and major electricity cable is damaged by fire.

It’s not good news for UK householders after a fire at the National Grid Interconnexion France-Angleterre (IFA) site near Ashford in Kent broke out in the early hours of Wednesday.

A key high-voltage electricity cable between Britain and France has been shut down sending wholesale energy prices soaring. The cable is reported to be totally out of action until 25th September and will run at half of its capacity (1GW of power) until March 2022.

There are seven electricity interconnector links that connect the electricity systems of neighbouring countries to the UK and allow them to share excess power. This one could formerly carry up to 2GW of power and had been importing electricity from France in recent days, after UK prices hit a record high of £540 per MWh on the wholesale energy market.

Ofgem Raises Price Cap

Due to the rocketing price of wholesale energy Ofgem, the industry regulator, announced on the 6th of August that the cap will rise by £139 to £1,277 a year for the typical dual fuel home, as of 1st October 2021.

Since its introduction in January 2019, the price cap has saved households on default tariffs an estimated £100 a year each, or over £2 billion in total on their energy bills.

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