Cornwall Insight has increased its Default Tariff Price Cap predictions for the second quarter of 2023 by over £400.
The Price Cap is nonetheless predicted to drop slightly following the first quarter of the year, according to Cornwall Insight. The cap will be £4,279 for a typical household over the first three months of 2023, as announced by Ofgem in November.
The market intelligence firm expects the cap for each quarter of next year after that, from April, to be:
- Q2 23 (Apr-Jun): £4,174
- Q3 23 (Jul-Sept): £3,624
- Q4 23 (Oct-Dec): £3,636
These latest predictions highlight the volatility of power prices. Its prediction for Q2 is up more than £400 its previous predictions for the period, released in November.
Households will be still be protected by the Energy Price Guarantee from April, although it will be set at the higher level of £3,000. The government will compensate suppliers for the difference between the actual cost of energy, and the cap set by the Energy Price Guarantee.
Writing on LinkedIn, Cornwall Insight said: “Based on our current forecasts we have calculated that the full governmental cost of the 18-month EPG will be approximately £47bn.
“Due to volatile energy market conditions this figure remains subject to change on a daily basis.”
The new predicts follows an exceptionally expensive start to the week, with Day Ahead prices jumping to £2,585.8/MWh for 12 December.