Gas/Electricity Price Increases

[jmak]

Oh it's the wholesale price of gas is it?

 

[h=1]New calls for windfall tax as Shell unveils highest quarterly profit in eight years [/h]

Yep. Cos the gas hasn't actually suddenly cost loads more to get out of the ground and pump to your house. It's just the market so it's not difficult to work out where the extra money goes.

[2ilent8cho]

Nailed it. The way they describe the cap is driving me a bit mad. Tell me how much difference it makes per kWh.

 

I wish everything was very clearly in kWh and quick and easy to get too, some companies make it so hard to get this figure on quotes. They will ask silly questions like how big is your house, or sweeping statements on comparison website like you could save £400 a year. No, just tell me the unit price and the standing charge that's all I need, not 'We estimate your usage will be £1050 a year'. I don't even understand this energy cap thing, it does not seem to make sense, as I'm sure I could run up £10,000 a year in electricity if I wanted too.

[CHiLL]

I wish everything was very clearly in kWh and quick and easy to get too, some companies make it so hard to get this figure on quotes. They will ask silly questions like how big is your house, or sweeping statements on comparison website like you could save £400 a year. No, just tell me the unit price and the standing charge that's all I need, not 'We estimate your usage will be £1050 a year'. I don't even understand this energy cap thing, it does not seem to make sense, as I'm sure I could run up £10,000 a year in electricity if I wanted too.

That's why I like being with Octopus, because they do make it clear.

 

Isn't the energy gap is the maximum that they can charge you per KWh, not the maximum you can run up in a bill.

[2ilent8cho]

Isn't the energy gap is the maximum that they can charge you per KWh, not the maximum you can run up in a bill.

Thats why its confusing, if it is that why are headlines Energy cap to go up by £693 a year? Why not say electricity cap to go from 25p kWh to 45p kWh for example, that I can get my head around.

[AlistairB1983]

Thats why its confusing, if it is that why are headlines Energy cap to go up by £693 a year? Why not say electricity cap to go from 25p kWh to 45p kWh for example, that I can get my head around.

Because the media, correctly or otherwise, believe that the British public can't get their head around that - so do the calculations for them.

[Koldov]

I thought the 'Energy Cap' is just a limit on the amount the companies can charge per kWh for the energy they supply.

 

So, if say they wanted to charge 0.25p per kWh the cap might limit them to only 0.24p per kWh...

 

The amounts bandies about by the news that it will rise is for average use in an average household (I'm sure there is a set 'average' figure somewhere), so taking that into consideration the 'average' household will see a rise of about 50% (figure varies) as the price cap per unit is raised.

 

Mine has risen by well over 115%...

 

I think my annual usage this year comes to about £434 (plus standing charges) so probably another £150 on top of that giving me around £584. I've been paying £63 per month direct debit and so ended up in credit.

 

They offered me today a tariff that estimates (I believe based on my usage) that is estimated a yearly spend of £1638.83... What?!

[timbo343]

We've just been having the same discussion about the cost of energy.

 

All i can take from it is, if someone is on the variable tariff such as the Flexible Octopus October 2021 v2 tariff...

 

Current unit rates:

Electric - 19.89p/kWh

Gas - 3.94p/kWh

 

a 54% increase on the current figures is:

Electric - 30.63p/kWh

Gas - 6.06p/kWh

 

I think the standing charge will remain the same but that's being hopeful.

 

For me, as an octopus customer, i fixed my rates in September 2021 on a 24 month contract. I might have been a bit of a fool to do so but i wanted the peace of mind that i knew what i was paying for the next 24 months come what may, so i am paying:

Electric - 23.41p/kWh

Gas - 5.59p/kWh

 

It is possible to keep an eye on Octopus' tariffs by going to https://octopus.energy/tariffs/ - DON'T click on get a quote, instead, put in your postcode and wait for it to populate and show the tariffs. Use the filters to show domestic tariffs.

[PrimaryNetMan]

Still worth staying on Octopus variable rate if you are on it. Just dont look back at your bills from this time last year!

 

Compared to January 2021 fixed tariff cost have increased:

 

Current Variable Rate (soon to increase)

Electric Day 36%

Electric Night 56%

Gas 43%

 

Fixed Rate

Electric Day 137%

Electric Night 130%

Gas 260%

 

Just had an email stating my DD will be increasing fro £80pm to £145 to cover the increase in costs.

 

Add the increase in petrol and thats an exta £140pm or in another way, you'd need a pay increase of around £2500 to cover it.

[elsiegee40]

Our solar panels at home are being installed in a fortnight thank goodness. Every little helps

[timbo343]

This might be what people have been waiting for..

 

[jmak]

I guess it's only about £6/month, and bills are going to increase by so much that most people won't notice, but....

 

How can they justify doubling the daily standing charge?

 

Edit: the price table above tells quite a different story to the headlines.

 

Headline: energy cap up by 54%

Boring detail:

Electricity up by 36%

Gas up by 84%

 

Heating oil is up by about 50% from last year - although that's unregulated anyway.

 

You can't get away from the fact that whatever energy you buy it will cost you a shed load more, but I bet £693/year or 54% different match many people's experience.

Edited February 3, 2022 by jmak

[nicholab]

I used to love Octopus but they don’t cover NI I wish they did so I am stuck with SSE. I don’t understand why the NI energy market does not have the same chose as the rest of the UK.

[mavhc]

Should encourage people to get rid of gas faster, problem is we need to be installing heat pumps at 20x the current rate to reach even the sadly minimal targets we set

[CHiLL]

Should encourage people to get rid of gas faster, problem is we need to be installing heat pumps at 20x the current rate to reach even the sadly minimal targets we set

Are these heatpumps they're saying we have to move to even efficient in our climate?

[mavhc]

Are these heatpumps they're saying we have to move to even efficient in our climate?

 

Seem to be fine in Norway, so I'd think so

[LeMarchand]

Seem to be fine in Norway, so I'd think so

 

Doesn't Norway have plenty of naturally occurring hot springs, though?

 

Last time I read (OK, skimmed - so I may not have got all the info) about heat exchangers it made it sound like they would be OK in the leafy suburbs, but not so good in inner cities.

[mavhc]

Heat pump is just aircon in reverse, like your fridge, take air, expand it, gets colder, compress it, gets hotter.

 

So instead of heating the air, you get some air that's already got heat in, and compress it, raising the temp.

 

Handy part is, when it's too hot now you also have aircon.

 

You'd also want a heat exchanger, so you're capturing the heat in the outgoing air, because otherwise you have a sealed house with rising co2 and pollutants.

[jmak]

Are these heatpumps they're saying we have to move to even efficient in our climate?

They're less efficient when it's cold but instead of thinking in Celsius, think in Kelvin. At the temperature water freezes, it's still 273°K, as opposed to the 293°K you're trying to achieve inside. That's not to say it doesn't make a difference that sometimes it's a bit cold here, just pointing out that there's still plenty of heat in the air outside to capture and amplify.

 

I've posted in another thread about my experience and will update again after winter is finished, key points for me are:

 

1) You can effectively heat an old, poorly insulated houses with a heat pump (the more efficient your house is, the better, but that's true for any form of heating).

2) We need to stop burning stuff and at the minute ASHPs are the only game in town (GSHPs are a lot more expensive as retrofit).

3) I wouldn't rip out an efficient fairly new gas boiler. If I had to replace a gas boiler now I'd get a heat pump if it's affordable for you. If my gas boiler was getting on a bit and I thought I could get another 2 or 3 years or if it, I'd wait but start planning and finding out what's possible in your house. My experience is that my ASHP is efficient and quiet, but the fitters tell me it's streets ahead of what they were fitting 4 years ago. I'd expect them to continue to improve in efficiency and noise.

[BOOT]

I don't have any form of heating and haven't for several years now.

I've been looking at heat pumps... but there just isn't one available at a price I can afford.

Even gas boilers and insulation are far out-of-reach.

 

I can get a free, fully installed coal boiler though.

[Koldov]

Am I right in thinking this is just basic supply and demand economics (profiteering)?

 

It isn't costing anyone to any more to get the 'natural gas' out of the ground and it isn't costing anymore to pipe/ship it to us.

 

So, whoever is raising the price of the the raw material is just profiting, because demand is high?

 

Also, electricity is costing more because over 50% of it is produced by gas... which means that those companies saying they are 100% green electricity shouldn't be raising the price...?

 

EDIT: Or is the price rise due to an actual shortage (and shortage of commodity=rise in value)...?

 

Sorry to anyone highlighting this as I edit...

 

However, I've seen we get nearly half our gas from the North Sea...

 

 

https://oguk.org.uk/uks-north-sea-gas-reserves-could-buffer-consumers-against-energy-shortages-and-price-rises/

Edited February 4, 2022 by Koldov

[mavhc]

Problem is a 10% drop in supply can cause a 200% increase in price, depending on who needs it and how much they're willing to pay for it.

 

Can't be that hard to fit your own reversible aircon system, surely, as long as you're fine with making holes in walls/ceilings for pipes, not like gas where you can blow everyone up

[Koldov]

Ah, well a bit more research reveals this (for all you Octopus fans):

 

"Why do high gas prices affect a 100% renewable energy tariff?

 

Though green energy is cheaper to generate, on the market it's sold at the same, higher price of gas and other fossil fuels. That's down to the way the market's set up. It's similar to how houses are sold based on the price of neighbouring homes, rather than what it cost to build. Read more about the latest in the energy market.

 

It's mainly set up this way because the grid always has to be balanced: the UK's energy needs (or 'demand') matched perfectly with an equal amount of power supply. The grid calls on all different types of power, from gas to renewables, to help with its crucial balancing job. It wouldn't be entirely fair to pay some energy generators less for their power when they're fulfilling the same important function. This means that the highest price ends up setting the market price. When gas prices are high, all electricity prices are too.

 

We’re pushing for a system in which more and more of the electrons are green ones – because the more green power in the grid, the less we need to rely on expensive, dirty gas imports to meet our energy needs at all."

 

https://octopus.energy/blog/energy-price-cap-february-2022/#:~:text=Why%20do%20high%20gas%20prices%20affect%20a%20100%25%20renewable%20energy%20tariff%3F

 

So although it's cheaper to produce, you have to pay the same price as other more expensive/dirty fuels because the market says so and it's not worth producing electricity in a more environmentally cleaner way if you're not going to get paid the same as those burning gas/coal to produce it...

[mavhc]

Just need to tax the companies that pollute the amount it costs to clean up their pollution, and then use that money to clean up their pollution

[Andrew_C]

Problem is a 10% drop in supply can cause a 200% increase in price, depending on who needs it and how much they're willing to pay for it.

cf toilet paper, about two years ago.

[jmak]

Am I right in thinking this is just basic supply and demand economics (profiteering)?

 

It isn't costing anyone to any more to get the 'natural gas' out of the ground and it isn't costing anymore to pipe/ship it to us.

 

So, whoever is raising the price of the the raw material is just profiting, because demand is high?

 

Also, electricity is costing more because over 50% of it is produced by gas... which means that those companies saying they are 100% green electricity shouldn't be raising the price...?

 

EDIT: Or is the price rise due to an actual shortage (and shortage of commodity=rise in value)...?

 

Sorry to anyone highlighting this as I edit...

 

However, I've seen we get nearly half our gas from the North Sea...

 

[ATTACH=CONFIG]64535[/ATTACH]

 

https://oguk.org.uk/uks-north-sea-gas-reserves-could-buffer-consumers-against-energy-shortages-and-price-rises/

I think you got it in your first sentence. Presumably as we increase the proportion of renewables in the grid mix, the influence of international prices and especially global fossil fuel demand will reduce. It is actually partly expressed in yesterday's increases; gas has gone up by much more than electricity.

 

The best/most amusing/most insane infographic I saw was of a ship that had left full of gas bound for the far East that had gone across the Atlantic, through the Panama canal and halfway across the Pacific only to turn round and head back to Europe as we were going to pay so much more for it [emoji2357]