EDF announces 6% dual fuel increase on its standard variable tariff

• Wholesale energy prices have increased 18% since the start of the year, and 13% since April[1]

• 60% of customers will be unaffected, including vulnerable customers already protected by the prepayment and safeguard tariff caps

• Dual fuel customers will on average pay £1.35[2] a week more from 31st August

EDF Energy is today announcing a change to its standard variable tariff prices, effective from 31st August 2018, following significant increases in the cost of wholesale energy since the start of the year.

About the changes

EDF Energy’s standard variable dual fuel tariff will increase by 6% to £1,228[1] a year (+£70). The standard variable electricity and gas tariffs will be increasing by 6.1% and 6% respectively.

The changes will affect EDF Energy standard variable customers, currently 40% of customers. Those on a fixed price tariff, prepayment tariff or the safeguard tariff for vulnerable customers will not see any changes from today’s announcement.

Why are prices going up?

Wholesale prices for dual fuel have increased by 18% so far this year, increasing sharply since April (+13%)[2]. This is due to a number of factors, including the ‘Beast from the East’ reducing gas storage stocks over the winter, compounded by global oil markets feeding into higher UK wholesale prices for both gas and electricity.

Ofgem acknowledged that costs faced by all energy suppliers had increased when it adjusted the level of the prepayment and safeguard caps in April.

EDF Energy’s 1.4% dual fuel increase, announced in April and which came into effect in June, included an increase on electricity that wasn’t fully reflective of all the cost pressures cited by Ofgem, as the company aimed to offset some of these through its own cost cutting. It has also held its gas prices for some time now, offering one of the cheapest standard variable gas price of the major suppliers for more than a year. Despite significant efforts to reduce costs, it is not possible to continue to absorb such significant increases, especially if they continue to rise. 

In the past standard variable customers were protected from short-term fluctuations in wholesale markets due to EDF Energy’s policy of buying energy in advance – often several years ahead. Such long term forward buying of energy is no longer consistent with how tariff caps are being set.

EDF Energy Managing Director of Customers Béatrice Bigois said: “We know that another price rise will not be welcome, and we had hoped that our limited changes announced in April would be enough. However, energy costs have continued to rise significantly and despite our best efforts to absorb some of these by reducing the costs within our control – sadly we can no longer sustain this.

“Customers who wish to avoid this increase will be encouraged to choose one of our fixed price tariffs when we write to them later this month.”

All impacted customers will be written to this month, providing personalised information on how these changes will affect how much they pay. These letters will provide customers with information on cheaper tariffs, and for those paying by cash or cheque there will be additional detail on savings available if they switch to Direct Debit.

[1] Based on a dual fuel direct debit bill at typical consumption averaged across all regions. Typical use as defined by Ofgem is 3,100kWh standard electricity and 12,000kWh gas.

[2] Annual dual fuel cost calculated on the basis EDF Trading forward prices for power and gas

[3] Annual dual fuel cost calculated on the basis EDF Trading forward prices for power and gas

[4] Based on a dual fuel direct debit bill at typical consumption averaged across all regions. Typical use as defined by Ofgem is 3,100kWh standard electricity and 12,000kWh gas.

Notes to editors