Page last updated on 16th March 2026
Understanding the energy crisis
Over the past couple of years, the media has popularised the term “energy crisis” to describe the rise in energy bills and its widespread effect on homes and businesses across Great Britain. While this term emphasises the perceived impact of rising energy costs on households, the “crisis” is generally considered to have reached its peak in late 2022. But since then, energy prices have not dropped back down to pre-crisis levels.
This page takes a closer look at the “electricity price crisis” and addresses questions like “what is the energy crisis”, “why is energy so expensive”, and “what were the causes of the energy crisis?”
We have also compiled some practical steps you can take to help reduce your energy bills; how improving your energy efficiency can also benefit of your home finances.
Energy crisis explained: Why is the cost of gas so high? And why is electricity so expensive?
Great Britain’s energy crisis first emerged in the autumn of 2021. An increase in demand, coupled with gas shortages, caused a sharp rise in wholesale gas prices and higher energy costs overall. This situation was accelerated by external events such as:
- Gas demand increased after the pandemic (compared to during the pandemic), but inadequate supply struggled to keep up with demand.
- Russia’s invasion of Ukraine in 2022, which disrupted global gas exports and created supply issues.
Around 30% of electricity in Great Britain is generated from gas. So, when the cost of gas began to rise, it caused a ripple effect that impacted the price of electricity.
Gas and electricity price crisis: The impact
While the impact of the energy crisis, particularly on the price of gas, has decreased drastically since its peak in 2022, you may still be facing higher household bills than before the start of the crisis. Some of the most widely felt effects of the energy crisis include:
Rise in household bills
Why is energy so expensive in my household? Because the price of electricity is closely tied to gas prices, higher wholesale gas prices resulted in increased costs for gas and electricity for households. This led to more expensive household energy bills, regardless of whether households used the same amount of energy as before the energy crisis.
Increase in the cost of living
Another impact of the energy crisis was inflation. The costs of transport, food, and other essentials also rose because of higher energy bills.
Strain on businesses
In addition to households, businesses felt the impact of the energy crisis through rising energy bills, which increased operating costs and contributed to supply-chain disruptions.
Check out our money saving tips for your businesses if you are a small business owner.
Strain on energy suppliers
Several energy suppliers went out of business during the peak of the energy crisis, understandably leaving households concerned about their access to energy. If your supplier goes bankrupt, the Ofgem safety net will ensure you always have an energy supply and help move you to a new supplier.
If you or anyone in your household has extra access or safety needs, and you are worried about interruptions to your electricity or gas supply, you may be able to register with the Priority Services Register, a GB-wide service which provides additional support and advice for households that need it most.
Why is gas so expensive and how have the government responded to rising energy costs?
Following the gas and electricity price crisis, the government and regulatory bodies implemented schemes to provide financial support for households struggling to pay their energy bills. While some of the schemes have ended, others remain in place today. Some notable examples include:
Energy price cap
The energy price cap is set independently by Ofgem and limits the price which energy suppliers can charge for gas and electricity. This cap is still in place today and updated every three months, ensuring you pay a fair price for your energy.
Financial support
The Warm Home Discount Scheme offers a one-off discount of £150 on electricity bills for eligible customers during the winter months in Great Britain. The scheme is designed to support low-income households.
During the peak of the energy crisis, the government also introduced temporary support schemes such as the Energy Price Guarantee (EPG) and the Energy Bills Support Scheme (EBSS) that are now closed. You can read more about them on GOV.UK.
Find out more about the grants and schemes available in England, Scotland and Wales.
Ofgem’s safety net
Ofgem’s safety net was introduced well before the energy crisis and is designed to protect consumers if their energy supplier goes out of business. If this happens, Ofgem will automatically move you over to another supplier, preventing any disruption to your energy supply.
Responding to the energy crisis
Wondering “why is my electricity so expensive, even after the peak of the energy crisis?” And the same for gas? While we don’t know if energy prices will return to previous rates, there are steps you can take to be more energy- and cost-efficient at home to help manage your bills:
- Insulating and draught-proofing your home to prevent heat- and energy-loss. This can range from bigger projects, like cavity wall insulation, to smaller changes such as using draught excluders on external doors.
- Check if you’re eligible for government grants and schemes. For instance, the Energy Company Obligation scheme requires energy suppliers to help eligible households reduce home heating costs by making energy saving improvements to their home. Find out if you could be eligible.
- Look into energy tariffs. Some energy suppliers offer fixed-rate or time-of-use tariffs, which can help you save money..
- Using your energy mindfully (for example, switching off appliances when not in use, or turning down the thermostat). Even small changes can add up over time and having a smart meter installed can help you to track your energy usage, in pounds and pence, to support you with your home energy goals.
Get a smart meter
While the peak of the energy crisis is over, many of us are still feeling the impact of high energy bills. Energy-saving solutions can help you regain control over your energy supply and manage rising costs.
As well as supporting the government’s net zero target by 2050, switching to a smart meter can help you make more informed decisions about your energy usage. The smart meter’s in-home display shows you how much energy you are using, allowing you to check how much energy you’re using when you run different appliances on different settings. This way, you can make more informed decisions about your energy usage and find ways to save money.
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