There are many factors involved in calculating the cost of domestic electricity and gas, and various reasons why prices have been generally increasing in recent years, prior to the recent cuts. A shortage of domestic reserves and steep taxes and other costs imposed on imported fuels have driven up market prices, but may also have had the unintended side effect of reducing energy wastage in many areas of the country, as people learn to be more economical with their gas and electricity appliances.

Demand for gas peaked during the frostbitten winters of recent years, lessening somewhat for winter 2011 which proved to be milder than anticipated. Electricity is a different story, and an increase in the number of electronics used in homes - from TVs, computers and game systems to chargers for devices used outside the home - has ensured that demand remains high.

An increasing focus on energy efficiency from manufacturers at least helps to ensure that these appliances and devices do not consume as much energy as older equivalents, and by replacing outdated, less efficient systems, households can effectively reduce their carbon emissions and electricity bills even as their actual level of consumption increases.

Beyond the residential energy market, business gas and electric consumption has remained relatively steady, as multifunction devices reduce the electricity requirements of some office spaces while others invest in increasingly sophisticated electrical systems. Lighting remains the greatest drain on business electricity customers, but replacing high wattage bulbs with energy saving lights, installing timers and reminding employees of the importance of switching off lights when rooms are not in use have all helped to reduce the level of increase in electricity demand.

The UK energy market is in a continual state of flux, as demand for energy in the cold weather months differs significantly to the demand during the warmer seasons. However, steady government investment showcases how important this sector is to Britain and what a large a role it plays in nearly every aspect of public life. Due to the highly competitive nature of the market, in which companies want to outshine competitors at any opportunity, you may be able to expect more affordable rates for electricity and gas in the future, however supply shortages and high commodity prices will prevent prices from falling back to what they were several years ago.

Increasing investment in renewable energy sources such as wind farms and geothermal energy could cost the government and energy companies dearly in the next few years, but the long term benefits to electricity consumers should be substantial, as these new energy supplies are able to scale to any level of demand.

Fiona Roy writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.