Sounds scary, right? But it shouldn’t. In most cases, it’s a classic case of “its bark is worse than its bite”. So we’ve put together some info to help you understand price spikes, and what they mean for you.
Why do prices spike?
Fundamentally, prices spike because there isn’t enough low cost electricity in the market to meet demand. Once the market responds, and releases more low cost electricity, the spike subsides.
How long does a price spike last?
A price spike, by definition, will be very brief – usually one, and occasionally two 30-minute trading periods. The prices around a spike might be higher than normal as the price lifts, and then subside back to normal levels.
How much will it cost me?
It depends how much electricity you use in that half hour period, and what price the spike hits. Here you can see the different costs of a price spike based on different levels of electricity consumption (aka the amount of power your appliances are using):
How much electricity you use depends on what you have running. To give you an idea, here’s a list showing the amount of power that some common appliances use (approximately - it’ll depend on your make and model) in half an hour:
It’s important to remember that generation costs – the part of your bill affected by price spikes – are only about 1/3rd of your weekly power bill, so the overall impact of a price spike on your bill will usually be fairly minor.
But remember, we’re always here to chat and answer any questions you might have, so if you’re at all concerned about prices spikes, flick us an email at firstname.lastname@example.org or give us a ring on 0800 435 425.