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UK regional energy prices

Did you know that the price you pay for energy will vary significantly depending on which region of the UK you live in?

Key points

  • The UK is split into energy regions, prices will vary from one to another
  • Each energy supplier will have different tariffs in each region, meaning you should shop around and consider a wide range of suppliers
  • Arguments have been made for and against introducing a national delivery charge for energy to smooth out regional differences
  • Take a look at our map of the UK's energy regions

Where you live in the UK can have a considerable impact on the price you pay for your gas and electricity, and at times the coldest parts of the country have been hit hardest in the pocket.

In 2012-13, for example, the north of Scotland saw the highest increase in energy prices, while those in southern Scotland saw the lowest.[1]

A 2016 report on the BBC's Money Box programme concluded that people in the east of the UK generally had cheaper energy prices than those in the west.

The show highlighted some of the cheaper areas as eastern England, including the east midlands, while more expensive regions included Merseyside, north-west Wales, south Wales and south-west England.

This was largely attributed to the costs involved in sending electricity down wires into challenging geographic terrain, into areas where there are fewer households to share the cost of delivery.

The same factors apply to gas supply, although the price implications with gas are not nearly so significant as with electricity.

The cost of delivery is set by regional distributors throughout the UK, not by the usual domestic energy suppliers, although these domestic suppliers will bundle the fee up into the overall cost of your bill.

This introduces a further reason for price differentiation, as the domestic suppliers will target different regions of the country depending on how much energy they buy and sell there, and the region's importance and profitability to them.

"When we hear of an increase in prices from energy providers it doesn't necessarily mean increases across the board for all customers," said energy expert Jeremy Cryer.

In areas requiring more infrastructure with a lower population the costs are going to be spread out between fewer bill payers
Tim Field, Energy Networks Association

"Many providers have different tariffs for different regions and some headline increases simply mean that a cheaper fixed tariff is ending.

"It's always a good idea to shop around for the best deal when it comes to energy and don't just stick with one of the big six providers.

"Switching energy suppliers can result in substantial savings… there's a big market out there and it's worth finding the right tariff."

Should there be a national delivery charge for energy?

Some have argued that regional discrepancies in the cost of delivering energy should be eliminated by the introduction of a national charge that shares the cost. Small energy suppliers

This would likely mean a cut in the cost of energy bills for certain areas, such as the south-west of England, but a rise in other areas, such as eastern England.

"We'd hope [the energy firms] could absorb the costs across the country to make for a fair payment system," St Ives MP Derek Thomas told Money Box in February 2016.

"I think I'm right in saying that Cornwall generates more renewable energy than other counties, so I think we're creating a lot of energy and there's no reason we should be paying more for it.

"It's ridiculous, we're being penalised because the argument is it takes a long time for the energy to get here."

Cost-reflective charging has been in place for many decades and it helps to ensure that the customer pays a fair price for the cost of the infrastructure they need
Tim Field

Energy regulator Ofgem says that there would be winners and losers from a national system and points out that there has been government support for areas facing particular difficulties with energy supply.

Northern Scotland and its islands are one such example; this region comprises roughly 25% of the UK's land mass, but contains only about 2% of its population.

To put across the suppliers' point of view, Money Box spoke to Tim Field of the Energy Networks Association.

"In areas requiring more infrastructure with a lower population the costs are going to be spread out between fewer bill payers," said Field.

"Cost-reflective charging has been in place for many decades and it helps to ensure that the customer pays a fair price for the cost of the infrastructure they need for the electricity and gas to get to the homes and businesses in their area."

Case study: Scottish energy prices, 2012-13[1]

In 2012-13, householders in the Scottish Hydro energy area - which reaches from the Shetland Isles in the north to Perth in the south - saw a 9.1% increase in their dual fuel energy bills, the highest in the UK.Gas and electricity

Meanwhile their neighbours in the Scottish Power area - which includes the cities of Glasgow and Edinburgh - only saw a hike of 7.2%, the lowest percentage rise in the UK.

Over that same time scale the Scottish Hydro area also endured the UK's lowest temperatures, with an average temperature in 2012 of 6.9C, compared to a UK average of 8.7C.

The increase in average prices in the north of Scotland would have cost homeowners who were on a standard tariff and used an average of 3,300 kWh of electricity and 16,500 kWh of gas annually an extra £109.57 a year.

An equivalent customer from the south of Scotland would only have seen an average increase of £85.72.

Based on those same figures, the average price rise for the UK as a whole in 2012-13 was £96.19 (8.06%).

By Sean Davies

Map of the UK's energy regions