Energy · Explainer
Where does the price of energy come from?
A short lesson you can click through. It explains what you actually pay for, what makes the price move, and what you can do about it.
Quick summary
- Electricity is made the instant you use it — supply always matches demand
- Windy days are cheap and clean; calm days mean burning gas
- The wholesale price is set by supply and demand
- Your bill is a stack of costs — the energy itself is the big, wobbly one
- The price cap follows those costs; it isn't a fixed cheap price
For information only
This is general information, not advice. The step-4 cost bands are live estimates from the Apex energy model (with a static fallback) — indicative, not a quote.
The lesson, in six steps
Work through the six steps below at your own pace. Each one is interactive — flick the switch, move the sliders, tap the buttons — so the ideas stick without any jargon.
1. Electricity is made the moment you use it
There is no giant battery for the whole country. So the amount made has to match the amount used — every single second. When you switch things on, somewhere a power station makes a little more.
They always have to match.
Key takeaways
- You can't change the world price of gas, the network costs, or the cap itself
- You can change when and how much energy you use, your insulation, and your tariff
- Shifting usage to windy, cheap, clean hours only saves money on a time-of-use tariff
- The greenest hour and the cheapest hour aren't always the same
Is the price cap a fixed, cheap price?
No. Every three months Ofgem adds up the underlying costs and sets the most a supplier can charge a typical home. It stops overcharging, but it still rises when the energy itself costs more.
Where do the step-4 cost figures come from?
They're live estimates from the Apex energy model, fetched through Switch4Good's own server-side proxy. If that call fails, the guide falls back to illustrative static figures so the lesson still works.
Does shifting when I use power always save money?
Only on a time-of-use or smart tariff. On a fixed or standard variable tariff the unit rate is the same all day — though using cleaner, windier hours still cuts pollution.
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