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Why are UK energy bills rising in early 2026?
Despite falling wholesale energy prices, UK energy bills are still increasing due to network and policy costs. Funding for new nuclear plants and upgrades to the energy infrastructure are adding to consumer bills, as announced by Ofgem. This means that even if energy prices on the market drop, other expenses keep bills high.
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What factors are driving the increase in energy costs?
The main drivers include investments in new energy infrastructure, such as nuclear power plants like Sizewell C, and upgrades to the national grid. These costs are passed on to consumers through higher bills. Additionally, policy levies aimed at supporting renewable energy and decarbonisation efforts also contribute to the rise.
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Will energy bills go down later in 2026?
Experts suggest that while there may be temporary dips, overall bills are expected to rise again later in 2026. Short-term reductions in wholesale prices are offset by ongoing network and policy costs, which are likely to push bills higher in the coming months.
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How do network and policy costs affect my energy bill?
Network costs cover the maintenance and upgrade of the energy grid, ensuring reliable supply. Policy costs fund renewable energy projects and decarbonisation initiatives. Both are included in your energy bill and have been increasing to support the UK’s transition to cleaner energy sources.
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What is the impact of government policies on energy prices?
Government policies aimed at reducing carbon emissions and investing in renewable energy sources often involve upfront costs. These costs are reflected in consumer bills through levies and charges, which can cause bills to rise even when market prices fall.
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Should I expect my energy bills to keep rising in the future?
Yes, experts warn that energy bills are likely to continue increasing due to ongoing infrastructure investments and policy commitments. While there may be short-term fluctuations, the overall trend points to higher costs as the UK works towards its renewable energy goals.