UK energy price cap: wholesale energy cost
UK energy price cap: wholesale energy cost stood at £773.98 per year in Q4 2026, according to Ofgem — energy price cap model. It is one of the indicators in the Gas and electricity prices table (Value · Quarterly), with a complete series running from Q2 2017 to Q4 2026. The complete series with an interactive chart, free to download.
This indicator in the Gas and electricity prices table
| Indicator | Q4-2026 | Q3-2026 | Q2-2026 | Q1-2026 | Q4-2025 | Q3-2025 | Q2-2025 | Q1-2025 | Q4-2024 | Q3-2024 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost components: total (excluding VAT) | 1,674.11 | 1,575.07 | 1,553.77 | 1,664.54 | 1,791.5 | 1,757.5 | 1,890.98 | 1,773.37 | 1,751.67 | 1,595.09 | |
| Wholesale energy | 773.98 | 689.92 | 609.48 | 666.43 | 757.93 | 772.8 | 886.87 | 801.38 | 780.4 | 647.48 | |
| Network costs | 417.34 | 415.92 | 463.29 | 396.84 | 421.48 | 394.83 | 394.83 | 390.3 | 390.3 | 381.44 |
Understanding UK energy price cap: wholesale energy cost
Expressed as an annualised monetary amount, this series captures the estimated cost of purchasing gas and electricity on wholesale markets for a typical dual-fuel household across the United Kingdom, before value added tax. It isolates the commodity acquisition component from all other regulatory cost stack elements such as network maintenance, policy levies, and supplier operations. This figure reflects forward-market hedging strategies mandated or modeled by the regulatory pricing mechanism rather than spot-market volatility.
Interpreting this series requires distinguishing between traded commodity prices and final consumer bills, as hedging creates a temporal lag. Quarter-on-quarter changes demonstrate immediate shifts in procurement cost allowances, whereas annual comparisons indicate sustained structural movements in global energy markets. Analysts must not confuse this wholesale allowance with the retail profit margin or operational overheads of individual suppliers.
Frequently asked questions
- How is this wholesale component calculated for the price cap?
- Regulators use a specialised observation window of forward market prices to estimate what efficient suppliers pay for energy.
- Does this series include the cost of balancing the electricity transmission grid?
- Grid balancing and system operation expenses are typically categorised under separate network or industry charges rather than pure wholesale commodity costs.
- Why does this figure differ from daily spot market prices?
- Suppliers buy energy well in advance through hedging contracts, so the cap reflects a blended portfolio rather than single-day spot rates.