Explainer

Energy hedging means prices won’t be coming down anytime soon

The same mechanism by which retail energy companies protected us from the worst of last year’s skyrocketing wholesale prices will slow and reduce any downward trend

According to the CSO, wholesale energy prices have dropped by more than 40 per cent in the last year and are back to their lowest levels since August 2021. Picture: Getty

There is a lot of confusion over what is happening with our energy bills at the moment.

There are regular cries of foul play over supposedly “greedy” electricity companies, who some claim have been quick to put up prices for households in recent years, but have been slow to reduce them as underlying wholesale energy prices have dropped again.

Part of this confusion comes from a misunderstanding of the interaction between wholesale and retail energy ...