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Does where I live to mean higher energy bills? My family on the other side of the country say they get cheaper quotes for gas and electric

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With the energy crisis ongoing, I am looking to find the best available deal on my gas and electricity bill, which is proving quite difficult.

Out of interest I compared the quotes I am getting from suppliers with some of my family members who live on the other side of the country, and it seems they are able to get cheaper deals.

This got me thinking: does location come into it at all when energy firms set your prices?

Where in the UK has the cheapest energy bills? And why they would be different in different areas?

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Grace Gausden, This is Money, replies: The energy crisis is still ongoing, with millions facing record-high bills thanks to rising wholesale gas prices.

Cheap fixed-term deals have all but vanished, and prices are reaching more than £2,000 per year for some customers.

With the cost of fixed deals having been driven up, moving to a default tariff could now be the cheapest option for many.

These are the ‘standard’ tariffs that energy providers put customers on if they are not signed up for a fixed-rate deal.

As they move up and down with the energy market, default tariffs used to be more expensive than fixed rates.

But as prices have rocketed, the fact that they are protected by Ofgem’s price cap – while fixed deals are not – means they can work out cheaper.

Currently, the cap is at £1,277 for the average household – whereas fixed deals are reaching hundreds of pounds more.

With more people looking at tariffs that are not fixed at the outset, some are wondering whether where you live in the UK has an impact on how much your energy bill costs each month.

It is true that energy prices can vary depending on where you live, something that is referred to as the ‘postcode lottery.

And whilst the difference isn’t huge, with bills rising and cold winter ahead, every bit saved is important.

For example, a plan’s electricity unit cost in Canterbury could be 14.06p, rising to 14.39p in London, 15.25p in Cardiff and 16.55p in Belfast, according to Uswitch.

The good news is that it should only make a difference of around £6 to the typical monthly bill.

Uswitch said the difference in prices boils down to three major factors including how much energy is sold by the supplier in the region, how much energy is bought from generators in the region and underlying infrastructure costs charged by the local distribution network.

This is Money asked Energy Helpline, the independent price comparison service, to tell us more.

A spokesperson for Energy Helpline replies: Prices vary by region – there are 14 energy regions in total – and so the standard cost of energy varies according to where a consumer lives.

Generally speaking the difference isn’t huge, but it can by up to £70 for a yearly bill.

Currently the regions encompassing the North of Wales and South West of England cost the most, while the North East of England and East Midlands cost the least.

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Grace Gausden, This is Money, adds: Ultimately, each region’s local energy distributor will have their own charges set for suppliers, who will then pass the additional cost onto customers through their energy bills.

Every area is different, depending on the amount of energy they are able to generate there and the price of generating that energy.

Some regions can get their energy supply a little cheaper than others because they have a higher supply of fossil fuels or renewable energy.

For example, in Scotland, where there is a large supply of oil, energy tends to be cheaper.

Similarly, in some parts of the country where there has been more fracking, there has been a bigger supply of gas on the network.

Other regions might have plenty of customers, but not enough cheap energy generating solutions – meaning that the supply will be more expensive by the time it gets to homes.

Prices are also variable because the local distribution networks that operate the gas and electricity supplies in each region are effectively monopolies – and energy companies have no choice but to use them.

Unlike the energy markets, there is no competition forcing them to reduce their costs and fight for customers’ money, as these are built into the overall plan in the form of standing charges.

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It may seem odd that each energy supplier will have its own prices for getting the same gas and electricity from the same local distribution network in the same area – but each provider has its own reasons for setting the prices the way they are.

In theory, if the energy market has many suppliers competing against each other, then they will keep their prices low in order to retain and attract customers.

However, due to the ongoing crisis, and bills reaching record heights, this is currently not happening – and causing widespread concern.

It is expected prices will continue to rise into the next year with the price cap likely to increase by around £300 or more, according to experts, when it is next reviewed in April.

For now, households should keep an eye on their bills and check to see if they could save by moving tariff, with a default plan likely to be the best value.

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