Gas Prices

[BobG]

Thank you Billy

I've got Economy 7 so my units etc are based on the logic of that.

Electricity:

Peak unit rate
    28.26p per Kilowatt hourkWh
Off-peak unit rate
    19.73p per Kilowatt hourkWh
Standing charge
    23.88p a day

Gas:

Unit rate
    6.43p per Kilowatt hourkWh
Standing charge
    24.88p a day

Both deals only run until 23rd January 2023 though, Which, of course, begs the question of would I suddenly become eligible for the cap once I have to move ionto a much higher rate? I have failed to find any answer to that one so far!

Lol. Ovo reckon I will use 10,980 KwH of leccy in the next 12 months and 3,592 of gas. The leccy is possible. The gas is stupid. I burn logs.

BobG

[BillyStubbsTears]

Bob.

Those rates are all WAY lower than the current cap. My understanding is that in Jan, you'll automatically be moved onto the capped rates (roughly 35p/kWh for standard electric, 26p/kWh for E7 electric and 10.5p/kWh for gas, with standing charge being 45-50p per day for each of gas and electric (so ~£1 per day total standing charge).

[mugnapper]

https://news.sky.com/story/energy-crisis-plan-for-three-hour-power-blackouts-to-prioritise-heating-in-event-of-gas-shortages-12713253

Blackouts upcoming.
I can see 2 positives:-
1) Power cuts will reduce your energy bills.
2) We can all make a fortune by investing BIG in Tallow manufacturers asap!

[BillyStubbsTears]

Have I missed the bit where the Govt has been talking to the nation about the need to massively cut down gas and electric usage this winter?

I mean, I'm sure they MUST have done, but I'm buggered  if I've seen it.

[BobG]

Thank you Billy. And to think that a few months ago I thought those rates I am paying today were extortionate! Plus ca change....

Bob

[ncRover]

Have I missed the bit where the Govt has been talking to the nation about the need to massively cut down gas and electric usage this winter?

I mean, I'm sure they MUST have done, but I'm buggered  if I've seen it.

If a windfall tax had been placed to lower bills, that would have driven usage up. Can’t have it both ways.

[big fat yorkshire pudding]

I think I've said before that it's quite common in industry to ration usage in winter months. The big users essentially get huge fines for excessive use so cut down (I even used to have to sit in the dark at my desk).

Seems sensible a lot of it and common sense.  Like charging my car it's the most energy I use and I can schedule it to charge overnight so that seems the sensible thing to do.

[BillyStubbsTears]

Have I missed the bit where the Govt has been talking to the nation about the need to massively cut down gas and electric usage this winter?

I mean, I'm sure they MUST have done, but I'm buggered  if I've seen it.

If a windfall tax had been placed to lower bills, that would have driven usage up. Can’t have it both ways.

I'm not sure what you mean by this.

The level that the price cap is set at is a matter of Govt choice. Govt has chosen to set that, effectively to pay BP and Shell directly at the rates determined by Putin's war, and to cover that by Govt borrowing (which is now going to be used to justify an attempt to screw down other Govt spending.

The windfall tax would have been a way of paying for some of the cap costs without borrowing. But there's no link whatsoever between a cap and a windfall tax.

For what it's worth, this is the way I'd have dealt with the situation.

1) Don't cap anything. Let electric go to 70p/kWh and gas to 20p if that's what the market says. At those prices, people would have been massively incentivised to cut back.

2) Subsidise consumers by a) increasing UC massively for the poorest, and b) very big tax cuts targeted at the lower paid. Maybe 10p off VAT.

3) Then impose a windfall tax on BP and Shell, to recoup most of the excess that customers would be paying them.

That seems to me to do the three things you want to come out of this

a) reduce consumption
b) protect consumers with more protection going to the poorest.
c) Stop BP and Shell making obscene profits they have done absolutely nothing to earn
d) minimise Govt borrowing.

What Truss has done means:
a) Some incentive to economise, but much, much less than the alternative(*)
b) protection if consumers with the biggest subsidies going to the richest.
c) Allowing BP and Shell to pocket their Putin Profits.
d)Maximising Govt borrowing.


(*) An example. At 60-70p/kWh for electric, it's a no brainer for anyone who can afford it to get solar panels installed.The payback would be 6-7 years and the effect would be to reduce your grid consumption by 70-80%. Win-win.

At 35p/kWh, the payback period is 13-14 years. It just about makes economic sense, but it's a finely balanced decision.

[albie]

The overarching issue is separating electricity prices from gas prices under the present marginal pricing structure.

Then allow a new market based upon renewables (not nuclear) to develop independent of the declining fossil fuel energy economy.

Unit cost for production and consumption would lead to widespread electrification at pace.

No-one can suggest a way forward without dealing with these issues as a first step.
Propping up a failing market in the naive belief that it will not continue to fail is ostrich like deliberate misunderstanding.

[Superspy]

Not sure where that 13-14 year payback based on current pricing comes from BST,

I've just had solar fitted on an east/west split system (so sub-optimal in terms of how much it generates for the initial outlay), I also didn't use one of the cheapest companies, and the pay back calculations for me are 8-9 years based on assumptions of using 70% of what I generate, from a starting price of 27p per kWh (as it was before the October lift) with an assumed energy inflation of 8% per year.

What proportion I utilise is hugely dependant on my behaviours and we've already had 22% inflation of energy since those calculations.

I don't disagree with anything else you've said, I just don't think that's a fair figure to use when talking about whether there's an incentive because it seems way off the mark.

[BillyStubbsTears]

I've had a quote for a 4kW system and a big battery. Given the predicted output, it would have paid back in 8 years at 50p/kWh electric cost. At 35p it will be more like 13 years. It's impossible to say what the future cost will be, and I guess the payback will be shorter if electric prices go up, but that's all guesswork. If they do continue to rise, it's going to be a bloody tough decade. We'd be in a far better position now if the subsidies for domestic solar hadn't been stopped because of Austerity. We could have had panels on every suitable house in the country for not much more than the Govt is spending on the cap. Hey ho. Maybe we'll learn one day. 

[BillyStubbsTears]

Have I missed the bit where the Govt has been talking to the nation about the need to massively cut down gas and electric usage this winter?

I mean, I'm sure they MUST have done, but I'm buggered  if I've seen it.

https://mobile.twitter.com/Steven_Swinford/status/1578135758040403971

What in the name of holy f**k is this about?

[SydneyRover]

gambling

[BobG]

Yet again, yet again, we have a f**king Tory government favouring ideology over common sense, over the welfare of its citizen and over geopolitical strategy. Morons. f**king morons.

BobG

[BobG]

UK natural gas futures down to 289 today - according to the BBC. That's expensive by recent historical standards but a chuff of a lot less than the 708 it reached a month ago. Why, why is absolutely no news outlet, no current affairs organ, commenting on this fact? I am becoming deeply, deeply suspicious...

BobG

Later: still dropping. Now 284.

[drfchound]

Bob, there are other issues that the MSM are not commenting on:

See albies post tonight on The Labour Files thread.

[albie]

You can see the market movements in gas prices here, Bob;
https://tradingeconomics.com/commodity/uk-natural-gas

As you can see, a very volatile situation....with the UK at greater exposure due to a lack of adequate storage capacity. On the other hand, the UK can move to electrify quickly with the political will.

Incredibly, the UK is still allowing 2/3 of new build to connect to gas grid for heating....just insane when heat pumps are available.

This should be a media scandal, but again we live in a highly curated media environment.
No-one should rely on media coverage as an indicator of importance on any subject.

[BillyStubbsTears]

Well this makes me feel confident that there'll be no problems this winter.

https://mobile.twitter.com/BBCPolitics/status/1579041334983331841

[BillyStubbsTears]

Well this makes me feel confident that there'll be no problems this winter.

https://mobile.twitter.com/BBCPolitics/status/1579041334983331841

Zahawi says that Truss has killed the planned public information campaign on how to cut back on energy usage because of the cost £15million.

That is about 0.01% of what we as a country will spend on domestic gas an electricity over the next 12 months. So if helped us cut 1/10,000th of our usage, it would pay for itself. 

But I'm sure Zahawi is telling the truth, and the Govt, unlike every other one in Western Europe, is right not to encourage us to reduce usage. I'm sure it's got nothing to do with us having a PM who is an unhinged libertarian who once read Atlas Unchained.

[BillyStubbsTears]

NB:

What would we have to do to save £15m off our energy usage this year?

At the cost that electricity is likely to hit on the uncapped market this winter,  if every house in the country turned off 1 10W light bulb for 16 minutes a day, that would do it. But I'm sure Zahawi and Truss are right that we shouldn't be wasting money informing people of this.

[albie]

The worst thing about that interview is the softball approach of LK to blatant misinformation.

Zahawi twice says that the buffer is the same as last year. This is completely untrue.
Aside from the reserves being much lower in the UK than in most European countries, the ability to add further supplies in mid winter is reduced.

I understand why Zahawi is minimising the issue, but the lack of research behind LK and the easy escape given to misinformation by the BBC is appalling.

[BillyStubbsTears]

What do you expect from Kuenssberg?

Intellectually lightweight. Totally disinterested in solid background research. She made her name through having key Downing St staff on speed dial so she could get "exclusives" on whatever line the Govt wanted to push.

She's as vacuous and content free as the worst of the politicians she interviews.

[BillyStubbsTears]

But on topic again, this is feeling like Jan 2020 all over again.

A Govt that refuses to inform people about what they can do to minimise the worst of the coming crisis.

Senior politicians telling us everything is under control, while simply hoping that the worst doesn't happen.

If the worst does happen, like in March 2020, we'll be back in full on crisis mode.


Again.

Grown up Government tries to avoid the worst happening by taking sensible mitigation measures. Not by wheeling out a gobshite like Zahawi to lie that everything is fine.

[BillyStubbsTears]

https://mobile.twitter.com/AFK103/status/1602980624662396928

This really ought to be headline news.

TL:dr.

When you account for the warm weather we had this Autumn, we in the UK have not cut our gas usage, despite the prices going through the roof. You might recall that PM Truss (I know! Mad wasn't it?) blocked a planned advertising campaign by the Govt to encourage people to economise. Because that wasn't what Govt should do.

Meanwhile, in Germany, where they have had a massive Govt information campaign, their usage allowing for the weather is down 20%.

What does that mean? By failing to economise, we as a country are on target to spend £10bn more on gas over 12 months than we would have done if we'd followed Germany's lead.

There are times when you really have to wonder if some of our recent PMs have been active enemy agents.

[Nudga]

We used less this November compared to last November and still ended up paying £366. That's triple what we were paying.
Crazy because my wife was off work November 21 with a severed thumb so the heating and TV were on quite a lot.

I've got the burner on at the moment but the coal is shit, it's currently 14.1 degrees in the dining room where the burner is.
I'm dreading December and January bills.

[Filo]

My gas bill for November was £96.38, last November we used 1025kWh, this November we used 857kWh, we achieved that by turning the thermostat down and turning the boiler flow rate down

Electricity bill for November was £133.10, last November we used 459kWh, this November we used 358kWh, we achieved that by cutting back on tumble dryer use and buying a dehumidifyer to help dry clothes, in the spare bedroom

[BillyStubbsTears]

We've cut use to the bone. The house is freezing, but we're doing the "heat the person, not the space" thing. Invested in massive quilts, leccy blankets and heated shawls. It's working. Not comfortable but for Nov, our gas and leccy bill was £210.

Edit: Just checked. If we'd used the same amount we did in Nov 21, with the current rates, our November bill this year would have been £540!

[Bentley Bullet]

The problem with freezing houses is the inevitable occurrence of burst water pipes.

We'll be clapping our country's overworked plumbers once a week while they hold us to ransom over the cost of an emergency call-out!

What will be a nightmare for us will be a pipe dream for them!   

[BillyStubbsTears]

"Freezing" is a turn of phrase. Obviously we're not living in a house with sub-zero temperatures. But we've set the thermostat to a maximum of 17C, and only that in a few rooms and for limited times. A lot of the time, most rooms are 12-14C. It's cold, but if you stick another jumper and a second pair of socks on and it's not that bad. 

There's the added satisfaction of proving wrong that Kitson in the Kremlin who assumed we were all to soft to cope with a bit of cold and we'd give in as soon as the frosts came.

[ncRover]

The 3rd coldest start to a December in 100 years couldn’t have been timed worse.