Why are electricity prices going up in Guernsey?

BBC News

12 hours ago

The price of electricity in Guernsey is going up with tariffs rising next month. As prices in the UK are dropping, what is behind the increase in the island?
The BBC used information from Guernsey Electricity Ltd's (GEL) tariff calculator and data from Uswitch to estimate annual costs for low-usage and high-usage households in different regions of England, Scotland and Wales.Using the analysis, a typical low-usage household in Guernsey would spend £637 a year on electricity from July. Depending on the region, in Britain they could expect to save between £7 and £123 a year - between 1% and 19% less than Guernsey.
However, heavy electricity users are better off in Guernsey, with a high-usage household to spend on average £1,503 a year from July. The analysis showed British households could expect to spend between £42 and £244 more a year - up to 16% more.GEL said direct comparisons between the UK and Guernsey were "challenging due to the different tariff structures and pricing models" as well as "the relative economies of scale".Note: The figures do not include special tariffs, such as those for heat pumps or selling renewable energy back to the grid. Low-usage household calculations were based on 1,408 units a year and high-usage based on 5,517 units. Figures include discounts for paying with Direct Debit in UK and Standing Order in Guernsey.
Why are prices rising in Guernsey?
Guernsey's electricity prices stayed the same from 2012 to 2019, but have since risen significantly.These price rises mean the average Guernsey household will spend between 47% and 117% more on electricity from July compared with 2021.Unlike electricity companies in the UK, GEL is responsible for all aspects of electricity on the island, including generating or importing it, distributing it and billing customers.Most of Guernsey's electricity - about 90% - comes from France through a subsea cable to Jersey, supplying the island with low-carbon energy.However, the island also has 10 generators at its Vale power station, using a combination of natural gas, diesel and oil.The price of electricity was kept "artificially low" through most of the 2010s, according to GEL chief executive Alan Bates.This was good news for consumers at the time as they paid less than they would have in the UK.
However, the company said this led to underinvestment in its infrastructure, which is one of the reasons it is having to raise prices now - to play catch up.GEL also agreed a fixed price for the electricity it buys from France with EDF, France's government-owned power company.The firm said this protected the island against fluctuations in oil and gas prices caused by factors like the Ukraine war.With that agreement ending, it means the company will need to pay more and it is passing that cost on to consumers, with the latest rise being 8%.Other factors such as increased borrowing costs and decarbonisation plans were also playing a part, said GEL.GEL said islanders could save money by switching to its "unique Super Economy 12 tariff" - which could save a typical user £270 a year.The company also offers a 2% discount for customers paying by standing order, it said.
Alexandra Gelder, a medical secretary from Castel, said her family paid nearly £200 a month for electricity despite being "barely home" and she was "petrified" about paying her bills next month.Ms Gelder, who has Raynaud's Syndrome, a condition which can cause the fingers and toes to go numb in cold temperatures, said she could not afford to heat her States home any more.She said conditions were "not so bad" in the summer but "winter is awful"."I love this island, it is beautiful - but to afford to live here sucks," she said.
Citizens Advice Guernsey said it had not yet observed an increase in islanders asking for help about electricity bills but it was bracing an increased number of calls when tariffs rise."We strongly encourage anyone concerned about these changes to reach out for advice as early as possible," a spokesperson said.GEL said it had bought wholesale electricity at a fixed price since 2017, which shielded islanders from "the significant price rises seen in the UK" and had saved customers "more than £70m"."To understand the exact impact of upcoming tariff changes on individual bills, we recommend customers use our online tariff calculator," it said.
What are standing charges and how have they changed?
Standing charges are a fixed daily fee to cover the costs of connecting to gas and electricity supplies.GEL's standing charge rose more than 380% between 2021 and July 2025 - from just under £18 to £86.75 a quarter.From July the standing charge is set to go from £68.25 to £86.75.Before 2022 GEL said 96% of its income came from charging people for using electricity - the unit charge.However, the increasing use of renewable energy by households, such as solar panels, meant the amount of money the company made would drop.A GEL spokesperson said the company planned to review how it charged for electricity to make it sustainable, including for customers "who place a lower strain on the island's electricity network".
However, the spokesperson said more modern electricity meters would need to be installed before changes could be implemented.They said "there will not be further large standing charge increases" until the review had been completed.GEL said its tariffs "ensure a secure electricity supply for islanders, with minimal interruptions". "Guernsey performs well compared to other jurisdictions on the average number of minutes lost per customer per year through faults and cable damage, with 99.9% availability of supply maintained across the year," the company said.
Visualisations by Georgina Barnes and the BBC Shared Data Unit