The electricity-to-gas price ratio fell to 3.2 in April 2023 under the Energy Price Guarantee, according to a policy brief published by the research body Nesta on 27 April 20261. The same brief states that under the default tariff cap the ratio would have bottomed out at 3.5 in October 20221. The ratio compares the price of a unit of electricity with the price of a unit of gas, and is tracked in the site's UK domestic energy prices over time data.
The Energy Price Guarantee was the scheme under which the UK government capped household gas bills in 20221. Nesta states that the wholesale gas price allowance in the Ofgem price cap is 2.71 p/kWh for April to June 2026, and that it would need to reach around 10p per kWh for prices to reach the £2,500 level at which the government capped them in 20221. It adds that 10p per kWh is just below the level at which the UK government capped gas bills under the Energy Price Guarantee in 20221. The scheme is described in the site's guide to the Energy Price Guarantee.
Nesta's brief sets out a three-point plan for government action on domestic energy bills, covering low-cost energy efficiency measures ahead of winter, faster electrification over the summer, and changes to how energy bills are charged1. Among its recommendations it argues for a long-term target that the ratio of electricity-to-gas prices should not exceed 2.9, which it says is crucial to ensure that switching from a gas boiler to a heat pump is cheaper on lifetime costs1. It also suggests the government consider a gas price stabiliser, with a ceiling of 10p/kWh and a floor of 5p/kWh1.
"The price ratio fell to 3.2 in April 2023 under the Energy Price Guarantee"
The brief states that heat pumps use around 3.5 times less energy than a gas boiler to produce the same heat1. It also notes that the UK government has uplifted the Boiler Upgrade Scheme grant to £9,000 for heating oil and LPG users1. Uptake figures for that scheme are collected in the site's Boiler Upgrade Scheme statistics.
The brief says the UK faces a renewed energy crisis following the war in Iran, which it states has already caused wholesale gas prices to rise by around 50% since the invasion, and that this surge is likely to eliminate the £150 reduction in energy bills announced at the Budget in November 20251. It states that the government is reluctant to provide blanket financial support this time, arguing that support should go only to households that really need it1. It also states that the government abandoned its Energy Efficiency Taskforce soon after launching it1.
Why it matters for households
The ratio between electricity and gas prices determines whether running a home on electricity costs more or less than running it on gas for the same task. A lower ratio narrows that gap; a higher one widens it. Nesta's figure of 3.2 for April 2023 is the lowest point it records under the Energy Price Guarantee, and its proposed ceiling of 2.9 is below that level1. The comparison between the two fuels per unit is set out in the site's guide to whether gas is cheaper than electricity per kWh.
For a household weighing a heat pump against a gas boiler, the ratio affects running costs rather than the efficiency of the appliance itself. Nesta states that heat pumps use around 3.5 times less energy than a gas boiler for the same heat, so a ratio at or below that level is the point at which the efficiency advantage offsets the higher unit price of electricity1. The brief frames a ratio target as a matter of lifetime cost rather than upfront cost1.
The wider argument in the brief is that reducing oil and gas demand, rather than only subsidising bills, limits the effect of price shocks on household budgets and on the public finances1. It states that household spending on electricity, gas and vehicle fuel together accounts for almost 5% of consumer spending1. The relationship between bill support and reduced fossil fuel reliance is discussed in the site's guide to energy bills and energy independence.
What happens next
The brief recommends steps to be taken over the summer, a period it describes as when engineers are less busy, including boosting installer capacity, temporarily increasing the Boiler Upgrade Scheme grant and fuel poverty schemes, removing costs from electricity bills, removing planning constraints for heat pumps and solar, and promoting air-to-air heat pumps1. It also recommends a national energy efficiency advice campaign ahead of winter1. No dates for government decisions on these recommendations have been reported.
Sources1 cited
- How to respond to the energy crisis | Nesta, nesta.org.uk