@batpred 

The proof of the pudding will be pricing in 12 months time. It will be fab if it has worked and I’d eat my hat if I owned one.
I was hoping for complete reform, basic utilities like power and water should either be subject to full market competition or wholly nationalised. This halfway house where everything is piecemeal doesn’t facilitate efficiency or accountability. Other countries manage to do this, why can’t we, for example my Shanghai power bill is a flat rate of 5p/kWh, no standing or service charge and cost of living is about the same as London nowadays.

Posted by: @papahuhu

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But, it’s common sense that by increasing taxation, those charges are going to come back to the consumer

Er, not if you have a contract with a fixed pricing mechanism in place, which I understand is the situation here.  The formula for the wholesale price is fixed, taxes reduce excess profits at times like this when they are being made. 

Posted by: @papahuhu

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I don’t claim any insight into how to structure internal energy markets,

Noted

Posted by: @papahuhu

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But I do know from direct experience that in second homes I have in Shanghai and Basel that the energy prices are proportionally significantly lower than in the UK, relative to the cost of living. Furthermore, I recall never even considering electricity or gas or water prices back in the 80s, so something has deteriorated since then. 

The first sentence is irrelvant to the matter being discussed which relates to the UK and in particular the history of energy contracts under successive governments not the current one.  

As to the second point do you remember the 70s? energy prices certainly mattered then!

In the 80s and 90s we had abundant north sea oil/gas (which provides limited isolation) and there weren't, for some reason, any global energy shocks.  The world has changed!

Posted by: @papahuhu

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I have to admit I’m not a fan of champagne socialists and Trots like Miliband.

My understanding was that we were discussing the pilocy not the people putting it forward.  If our opinions are based solely based on who we like and dislike not any facts or research into the market, we will miss many good ideas suggested by people we dont like (and thats true whichever side of the various fences we sit).

Nevertheless I would point out that you are complaining about the current situation, which arises due to past events, which are in turn the product of predominantly right leaning not predominantly left leaning Governments.  Out of 80 years since the second World War the UK has had a right leaning Government.  Perhaps you may wish to consider this also.

I am also not an energy markets expert and financial markets are more up my street, so take my views with a pinch of salt. But, from what I read on Guardian, it seems this plan is not a magic solution for lowering the bills. Looks like the Renewable Obligation part of the prices would stay for the older wind farms. The article explains with an example on what the impact might be. Whether it would lower the bills, it might. But, not what we are hoping the magnitude of impact to be, as in whether this will delink gas and electricity prices.

Posted by: @jamespa

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Er, not if you have a contract with a fixed pricing mechanism in place, which I understand is the situation here.

@papahuhu Sunak did it in 2024.

He had the option to delink then, it was on the table due to Russia Ukraine War but instead, he slapped 50% in Renewables to claw cash into government over leaving it in our pockets.

Then announced we should expect a future of burning more Gas! 

Miliband was trying to explain that those renewables generators with very favourable rates when this was just taking off will either renegotiate or face taxation - their choice and hopefully voluntarily in our favour.

There are two types of contract pricing and both need treating different to the same outcomes - cheaper Wholesale.

Posted by: @chandykris

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I am also not an energy markets expert and financial markets are more up my street, so take my views with a pinch of salt. But, from what I read on Guardian, it seems this plan is not a magic solution for lowering the bills. Looks like the Renewable Obligation part of the prices would stay for the older wind farms. The article explains with an example on what the impact might be. Whether it would lower the bills, it might. But, not what we are hoping the magnitude of impact to be, as in whether this will delink gas and electricity prices.

I don't doubt that you are right that its not a magic solution, if there were one it would surely have been found by now.  It will likely take many small steps and some time to unwind what took six years to establish as the graph below clearly shows. 

Unfortunately the Government is dealing with legacy contracts which may or may not have been sensible at the time, but now seem out of kilter.  Thats life!

DESNZ has just commenced a Public Consultation which is relevant to this discussion.

https://www.gov.uk/government/consultations/reformed-national-pricing-reforms-to-siting-and-investment-levers?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=0ce858a6-6b40-4986-8872-e27a72bca234&utm_content=daily

@jamespa Agree with you that this is a knotty problem and would take multiple small steps and many years to resolve. Many of us here are insulated from any energy price shocks thanks to our investments in solar, battery, EV and heat pumps. But, it's clear that vast majority in the nation aren't, and this needs to be sorted out before the next energy crisis.

I wonder why they don't put clauses in the contracts to scale back payments when original investments are recouped. 

Posted by: @chandykris

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I wonder why they don't put clauses in the contracts to scale back payments when original investments are recouped. 

The problem I guess is balancing risk/reward.  Investors invest to get a reward, if they perceive they might not or perceive a risk they will either look elsewhere or charge more.  You may remember that there was a round of wind turbine allocations (under the previous government) where there were no bids.  Its a tricky one!

Looks like the variable versions of Octopus Go, Intelligent Octopus Go and Octopus Cosy tariffs are going up again from 1st May. Has anyone received an email for the same? I moved to 12 month fixed Octopus Go, but still keeping an eye to check how much am I paying more or less.

Posted by: @chandykris

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Looks like the variable versions of Octopus Go, Intelligent Octopus Go and Octopus Cosy tariffs are going up again from 1st May. Has anyone received an email for the same? I moved to 12 month fixed Octopus Go, but still keeping an eye to check how much am I paying more or less.

Yes I did, I chose variable at the beginning of the year because of the (by then) known price drop in April which I wasn't clear would apply to fixed.  Wrong choice as it turns out.

With the orangeman now evidently losing interest in the war whilst his henchmen allegedly make loads of money through insider trading on his oscillations, Im currently thinking the war and thus high prices might well continue more or less indefinitely.  At this point I'm more concerned about availability of food than electricity prices!

@jamespa The optics look terrible though for Octopus Energy to increase prices just three weeks after they came down. I just checked that the fixed Go rates are still the same for my region. I wonder whether this is a strategy to nudge people on variable smart tariffs to move to the fixed equivalents.

We do have many fruit trees in our garden. It will be a summer of apple, apricot and plum mash with sausages instead of real mash!

Posted by: @jamespa

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At this point I'm more concerned about availability of food than electricity prices!