The cost to the UK Government of holding down energy bills for households this winter is expected to be slashed due to a major slide in gas prices.
City economists said the slump in gas prices will provide a welcome £5billion boost to Chancellor Jeremy Hunt as he will have to fork out much less to fund the Energy Price Guarantee (EPG).
The Telegraph says Goldman Sachs has predicted that benchmark European gas prices will slump from the current level of 125 euros (£107) per megawatt hour to 85 euros (£73) in early 2023 - less than a third of the 300 euros (£258) reached in August.
While Goldman's price projection for early 2023 would still be several times higher than the ultra-cheap energy enjoyed prior to the Russian invasion of Ukraine, a further 30% fall would significantly lessen the apocalyptic projections for bills made just a few months ago.
Sanjay Raja, Deutsche Bank UK chief economist, said: "With prices dropping, the price tag for the EPG is also falling."
He said the latest data suggests that the cost of the six-month EPG will be £25billion, roughly £5billion lower than what was included in the growth plan costing.
Choking off gas
Vladimir Putin has been choking off gas deliveries to Europe in retaliation for sanctions, sending prices sharply higher over summer.
However, his attempt to weaponise Russia's hold on the region's energy supply has not yet led to the winter crisis the Kremlin had hoped for.
The Telegraph says spot gas prices in Europe even briefly went negative last week as overseas deliveries arrived at storage facilities that were already full.
"The influx of US liquefied natural gas amid decreased gas demand led to the European gas market (being) oversupplied, pushing day-ahead prices into the negative territory briefly," said UBS analyst Henri Patricot.
"Unseasonably-warm weather delayed the heating season", he said, which helped storage levels across Europe reach 95% by the end of October.
Storage levels have risen rapidly thanks to efforts to encourage people to lower consumption and warmer than normal temperatures in Europe in October, with a mild November also forecast.
Gas demand
In Britain, gas demand has been lowered by recent record electricity generation from wind farms.
Goldman estimates that current market pricing would suggest average annual household energy bills of £3,943 without the EPG - a near-60% increase on the £2,500 cap which in place until April. Nonetheless, it is still much lower than a projection made by Cornwall Insight in August that energy bills would hit £6,600 next year.
But Goldman also expects gas prices to pick up "sharply" again next summer as European governments begin to once again rebuild storage levels in preparation for another winter without Russian supplies.
After a fall in benchmark European gas prices to 85 euros (£73) per megawatt hour early next year, the Wall Street bank expects prices to then rocket to almost 250 euros (£215).