Notifications
Clear all

Electricity price predictions

Page 15 / 18

Jeff
 Jeff
(@jeff)
Active Member
825 kWhs
Joined: 1 year ago
Posts: 230
 
Posted by: @editor

@jeff, thanks for that. Do you think the quarterly cap adjustment is better or worse for homeowners?

Do you also know how long the increased standing charge is likely to remain high and is that also projected to go up?

That is two very big questions with lots of variables, including what happens politically, with the regulator, globally etc. 

I agree with @transparent who will know more about specifics

So these are my amateur rather rambling thoughts.... 

The standing charge is opaque now and it is not clear to me at least what happens next given the huge amount of money we can all see is needed.

1. Upgrading the network, e.g. National Grid mentioned a figure of 30 to 35 billion just for them over the next 5 years today, all going on bills one way or another. They announced record profits, and just imagine the profits of all their suppliers as well. It is a very easy  return on capital for these companies, very poorly regulated IMHO. 

2. We have barely started the refit of homes, and the current grants of 30,000 heat pumps a year for 3 years doesn't feel enough to me even if heat pump prices do fall. 

3. We are still paying for the failed suppliers at the moment

4. General inflation is high as we all know and interest rates are rising. This  will feed into higher funding requirements for changes and hence  higher standing charges. 

5. Things like the warm home discount may have to rise dramatically potentially loaded onto bills

6. We need to upfront fund part of the cost of the new nuclear power stations, will this go onto standing charges to some extent? It is certainly going onto bills somewhere as things stand. 

7. We have the £200 "loan" on our winter bills to pay back over several years, and this loan may increase. Hence impacting fixed costs on our bills for years to come.

8. We may see a dramatic rise in customer debts....  which needs funding... 

Etc. 

It may be some cost increases get shifted to general taxation but this is politically sensitive. 

There is an awful lost of investment still to come. 

Generally i feel the sector and regulation is a disjointed mess of independent companies. 

I can't quite believe how poor ofgem and the government has been sometimes. 

Another example is some of the recent wind farms holding off starting taking CFD payments as they can make a lot more money on the wholesale market which is basically linked to the higher price of electricity generated by gas power stations. Nothing illegal but somewhat ironic. 

We will gradually see some costs switched from electricity to gas but this will take some time..... This will help those that have moved from mains gas in a few years. 

Basically i wouldn't assume any big reductions in standing charges unless i am missing something

As for the quarterly price cap, it basically feels like a fudge to limit the risk of more suppliers failing. In the longer term we need to get more people onto time of use tariffs (with some protections)

We don't have an energy industry we can trust, hence the need previously for the price cap, but the cap potentially made things  worse last year. 

We currently have a mess where suppliers really need to hedge, but at the same time we need to gradually move to time of use. The transition needs to be carefully handled as we have seen recently. There are bigger brains than me i hope working this all out.... With very high volatility the time of use tariffs are hard to make work as we have seen. 

So i suspect the quarterly reviews will mean more volatility for many consumers already on the variable rate or coming off fixed rates now and being horrified at the high fixed rate deals generally. 

In the meantime just take advantage of any anomalies like Octopus Go where you can i suspect, buy some batteries and solar panels and as Derek always says do what you can to reduce your consumption in the first place. 

It is not all bad news, we may find unit prices come down a bit next year. I think the government are betting on this. 

Getting the country off gas longer term  should help as long as we don't get ripped off by the network operators, wind farms, nuclear power stations, heat pump installers etc. Let's hope the government and regulators have a grip.... else as a country the transition will be painful for many but OK for the few that can navigate the cheaper  options with some upfront capital investment and some DIY and are fortunate to have found some good companies with availability

 

 

 

 

 

 

This post was modified 1 month ago 3 times by Jeff

Mars and Derek M liked
ReplyQuote
Kev M
(@kev-m)
Member Moderator
946 kWhs
Joined: 1 year ago
Posts: 759
 

The new price cap of £2800 is going to mean 36p or so per kWh.  Not good, not good at all. 😐 

To think I was a bit miffed when I had to sign up for 14p when my cheap fix ran out last year.  I'm stocking up on coal and wood over the summer, sorry planet...


Mars liked
ReplyQuote
Transparent
(@transparent)
Member Moderator
934 kWhs
Expert
Joined: 5 months ago
Posts: 151
 

Allow me to provide some source references for that post from @kev-m  We may need to refer back to this at some future date. Today is Tues 24th  May 2022.

The estimated rise in the energy price cap was provided by Jonathan Brearley (CEO Ofgem) in response to questions from the House of Commons Business, Energy and Industrial Strategy Committee. This is chaired by Darren Jones MP (Bristol North West) who is renowned for his no nonsense approach - especially when questioning directors of energy companies(!). It is worthwhile checking his background and green credentials on his Wikipedia page.

Secretary of State for BEIS, Kwasi Kwarteng MP, also spoke to the Committee today and made it clear that the Government wasn't about to hand out sufficient cash to subsidise household energy bills for the coming winter.

Even so, let's remember that almost every MP is looking for answers. Given the technical insights and accumulated knowledge of RHH Forum members, we should be providing possible solutions.

If you have positive ideas, then get writing to your MP as a matter of urgency.

Amongst my wish-list are:

  1. Ofgem to require all domestic Energy Suppliers to offer at least one ToU tariff before October.
  2. ToU tariffs should be based on regional energy generation, not data from National Grid. Thus the areas with abundant renewable energy should make it financially attractive for the local population to use/store that energy rather than it be discarded (as at present).

Add your own and let's give our MPs some ways forward.

Save energy... recycle electrons!


Jeff and Mars liked
ReplyQuote
Jeff
 Jeff
(@jeff)
Active Member
825 kWhs
Joined: 1 year ago
Posts: 230
 

There has been a lot in the press recently from National Grid about nodal pricing and central dispatch following on from a study. This is from today 

https://www.cityam.com/national-grid-calls-for-local-energy-pricing-to-drive-down-household-bills/

This post was modified 1 month ago by Jeff

Transparent, Mars, prjohn and 1 people liked
ReplyQuote
prjohn
(@prjohn)
Regular Member
246 kWhs
Joined: 1 year ago
Posts: 95
 

@jeff Totally agree the grid should be broken up, this would allow for fairer and cheaper electricity for much of the country. This would also focus on needs where electricity is expensive to produce instead of piecemealing needs all over the country.


ReplyQuote



Derek M
(@derek-m)
Member Moderator
1746 kWhs
Expert
Joined: 1 year ago
Posts: 1386
 

@prjohn

I wonder if the UK would still be in this position if the Electricity and Gas Industries had not been privatised? I worked in the Electricity Industry both before and after privatisation, and it quite quickly went from a culture of keep the lights on at the lowest cost, with a 5 year and a 10 year plan, to how can we cut costs and make the maximum amount of profit.

Serious questions should be asked about where all the profits are being made, and if so called 'market forces' are being manipulated by some for additional profit.

When the various electricity grids were designed and created, it was to try to ensure that power was supplied to as many as possible in the most reliable and cost effective manner. Unfortunately, as fossil fuel, particularly coal fired, generation has been shutdown, its replacement is not in the same location, which means the the grids have to be drastically changed to get the power from the new 'point A' to 'point B'. This is where a 5 and 10 year plan would have been highly useful, instead of the present situation where the UK is playing catchup, because investment was delayed until the last possible moment, because it would look better on the balance sheet.


prjohn, Mars and Jeff liked
ReplyQuote
Mars
 Mars
(@editor)
Member Admin
2713 kWhs
Joined: 1 year ago
Posts: 1168
 

Good news on the £400 discount offered by the chancellor today. Just been reading an article that says:

How this discount gets applied will depend on how you get your electricity and gas.

If you pay with a direct debit, which 69% of Brits do, the £400 will be divided up and a portion of it will be deducted from your bill every month. 

Is the £400 going to be paid out over a year if you’re on a direct debit?

Caernarfon 18kW ASHP from Global Energy System – 6.16kW solar PV array
Follow our sustainability journey at My Home Farm
Our heat pump installation: https://youtu.be/c3V0k_GeFOo


ReplyQuote
Jeff
 Jeff
(@jeff)
Active Member
825 kWhs
Joined: 1 year ago
Posts: 230
 
Posted by: @editor

Good news on the £400 discount offered by the chancellor today. Just been reading an article that says:

How this discount gets applied will depend on how you get your electricity and gas.

If you pay with a direct debit, which 69% of Brits do, the £400 will be divided up and a portion of it will be deducted from your bill every month. 

 

Is the £400 going to be paid out over a year if you’re on a direct debit?

All households in England, Scotland and Wales connected to the electricity mains (around 28 million) will get a non-repayable grant to help towards the cost of energy bills from October. This £400 payment will be spread over six months off your direct debit - it won't be paid as a lump sum.


ReplyQuote
HughF
(@hughf)
Primary Member
389 kWhs
Joined: 2 months ago
Posts: 62
 

I assume that those on prepayment (I have family in such a position) will receive a voucher that can be used to top up. Or it will be applied to the smart meter automatically OTA.

Off grid on the isle of purbeck
2.4kW solar, 10kWh LiFePo4, Outback power systems 3kW inverter/charger, solid fuel heating, 10 acres.

My wife’s house: 1946 3 bed end of terrace in Somerset, GSH, DG, work in progress


ReplyQuote
Mars
 Mars
(@editor)
Member Admin
2713 kWhs
Joined: 1 year ago
Posts: 1168
 

Thanks @jeff. When is that set to commence? I’ll watch my account and ensure that we get a £66 credit for six months. I don’t trust E.ON at all.

Caernarfon 18kW ASHP from Global Energy System – 6.16kW solar PV array
Follow our sustainability journey at My Home Farm
Our heat pump installation: https://youtu.be/c3V0k_GeFOo


ReplyQuote

batalto
(@batalto)
Reputable Member
1151 kWhs
Joined: 1 year ago
Posts: 728
 

@editor I believe its due in October - after the low months and when the cap changes

12kW Midea ASHP - 8.4kw solar - 14.2kWh batteries
262m2 house in Hampshire
Current weather compensation: 50@-3 and 25@17
My current performance can be found - HERE
Heat pump calculator spreadsheet - HERE


ReplyQuote
prjohn
(@prjohn)
Regular Member
246 kWhs
Joined: 1 year ago
Posts: 95
 

All this £400 discount does is reduce the effect of the coming Autumn price increase. It does nothing to offset last April's price hike, which is the current issue.


ReplyQuote
Transparent
(@transparent)
Member Moderator
934 kWhs
Expert
Joined: 5 months ago
Posts: 151
 
Posted by: @prjohn

All this £400 discount does is reduce the effect of the coming Autumn price increase. It does nothing to offset last April's price hike, which is the current issue.

Agreed. So we need to be more adventurous in our thinking.

The UK imports very little Russian fossil fuel. Source: House of Commons Library briefing; 13may22.

But until we import zero we are still subject to the high prices occurring on EpexSpot, the European energy trading platform.

So how much short-term borrowing would be required to eradicate all Russian imports, and instead use 'large' domestic storage batteries (14kW+) to suck in the renewable energy we already generate?

What about HMG implementing this by targeting the poorest households on pre-payment meters? They could subsidise widespread storage battery installation via the major housing associations.

Even households who don't get a battery would still benefit, because our electricity costs will fall/stabilise without the affects of Russian fuels.

Such a strategy might cost no more than another 'discount' from the Chancellor in 2023. That government borrowing might very well pay for itself rapidly.

This post was modified 1 month ago 2 times by Transparent

Save energy... recycle electrons!


Jeff and Derek M liked
ReplyQuote
Derek M
(@derek-m)
Member Moderator
1746 kWhs
Expert
Joined: 1 year ago
Posts: 1386
 

I'm afraid subsidising everyone's energy bills is not the answer, and also is not sustainable in the long term. I fully agree that those who are really struggling should get help, but not the ones who can afford to pay their bills (me included). This money will have to come from higher taxes on us, our children or even our grandchildren in the future, or by government borrowing which could make the cost even higher.

The first line of attack should be improving energy efficiency, since not requiring the energy in the first place has so many benefits it is a total no brainer.

Someone (probably an astro-physicist who got bored waiting for the next planet killing asteroid to arrive) once calculated that the quantity of energy arriving at the Earth from the Sun each second of every day was sufficient to supply all the needs of us energy hungry humans for a full year. So each year we receive approximately 31.5 million times more energy than we require, but we are just very bad at capturing and storing it efficiently. I fully agree with Transparent, Batalto and others in the need to encourage home battery storage, but the Government in their wisdom are concentrating on solar PV (again), but not necessarily energy storage. I personally feel that they have got this the wrong way round, having more flexible energy storage would reduce the need for renewable generation along with reducing fossil fuel generation, both of which would help in mitigating the need for extensive improvements to the grid infrastructure, all of which should help create energy independence and keep down the costs.

Could we please have someone put in charge who has more than a slight sprinkling of common sense.


robl liked
ReplyQuote
HughF
(@hughf)
Primary Member
389 kWhs
Joined: 2 months ago
Posts: 62
 

On the subject of energy storage, I was pricing up some Pylontech LiFePo4 rack stuff from Aliexpress, man it's cheap nowadays!

Off grid on the isle of purbeck
2.4kW solar, 10kWh LiFePo4, Outback power systems 3kW inverter/charger, solid fuel heating, 10 acres.

My wife’s house: 1946 3 bed end of terrace in Somerset, GSH, DG, work in progress


ReplyQuote



Page 15 / 18



Share:

This website uses cookies to improve your experience. We'll assume you're OK with this, but you can opt-out if you wish. Accept Read More