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Electricity price predictions

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Transparent
(@transparent)
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Well I guess he's not just going to use it in his wood-burner.

Noah's strategy was more stable than the breakup of CEGB in 1990, and the subsequent flotation of National Grid. In our present energy crisis, we should take heed and put prophets first.

... which reminds me, I should probably go to the consumer unit and remove my ark suppressors.

Save energy... recycle electrons!


   
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Transparent
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I've done some calculations on the rise in Daily Standing Charges for electricity which Ofgem announced will commence in October

First, let me re-paste here the table of percentage rises which the BBC published for April '22

StandingCharge regionalB

The table refers to the maximum Standing Charge for a credit meter (ie not prepayment) with a single rate tariff (ie no cheap-rate period during the night).

Whilst inserting these figures into a spreadsheet, you'll notice that the percentage rises don't entirely match those which the BBC calculated. This will be due to them having truncated or rounded the pre-April figures to whole-pence. I don't have the original figures obtained by the BBC, and I filed a complaint via my MP that I was unable to locate them on Ofgem's own website during April/May.

The new data for October has been taken from Subsiduary Document Default Tariff Cap Level which is on this Ofgem page

image

The October rises vary between 14-18% on the April figures.

Since the daily Standing Charge is unrelated to the cost of the energy, I am puzzled as to why the rises are even as high as this.

You may think "Whatever has happened to 'network costs' during the last 6-months to warrant such increases?" 🤔 

The numbers for Ofgem's calculation can be seen in the Annex documents, which can be downloaded from the same page. But alas there are no notes to indicate how those numbers were derived. The only factor which I can think of is Ofgem's decision in May to remove the charge for 'infrastructure upgrades' from an Applicant seeking a new connection, and instead to pay for such network enhancements from end-users.

This post was modified 2 years ago 4 times by Transparent

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(@derek-m)
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@transparent

It is about time the standing charge was abolished, particularly since it is so unfairly applied and gives no incentive to reduce consumption. Add the costs to the Unit price.


   
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Transparent
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@derek-m I believe that the three main components in the elecricity Standing Charge are

  • network Use of Service charges for National Grid and your regional DNO
  • FiT payments to early adopters of home-based renewable generation
  • the Supplier of Last Resort (SoLR) fund to transfer customers to new Suppliers if their existing one fails

Within this last category at the moment is the entirety of the cost to keep Bulb alive.

So a proposal to abolish (or reduce) the charge requires alternative strategies to pay for these three elements. That's an excellent point for forum discussion of course!

Save energy... recycle electrons!


   
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Jeff
 Jeff
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Is Bulb being handled by a Special Administration rather than Supplier of Last Resort?

Isn't the Bulb administration cost currently not included in the standing charge? Instead it is government funded for now?

https://committees.parliament.uk/work/1698/energy-pricing-and-the-future-of-the-energy-market/news/165039/ofgem-evidence-reveals-potential-24bn-fallout-from-energy-firm-collapses/

I thought it was all the other failures picked up by Suppliers of Last Resort that were included in the standing charge for now at least?

Perhaps things have moved on already ? 

This post was modified 2 years ago 2 times by Jeff

   
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Transparent
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I agree that Bulb is in Special Administration. And I agree that the customers are not being transferred to another Supplier under the SoLR process.

But that Parliamentary statement doesn't say that the money to operate the company has been sourced from elsewhere, such as the Treasury. In April's cap-rise, the press were reporting that the money to maintain Bulb was still coming from the SoLR fund, which was one reason that portion of the Standing Charge was subject to such large rises.

Directly subsidising a 'private' company which still has other UK rivals would be quite a contentious issue... and not very Conservative.

Save energy... recycle electrons!


   
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Jeff
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FT August 21st 2022

The cost to UK households of bailing out nationalised energy retailer Bulb is expected to soar to more than £4bn by the spring unless the government achieves a sale, saddling every home with an additional £150 or more on its bills next year.

The bailout of Bulb, which collapsed in November last year, is expected to be the most expensive since the rescue of RBS during the financial crisis. Unlike 2008, the government plans to make households absorb the cost through higher energy bills rather than funding the rescue through general taxation as it is doing currently.


   
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Transparent
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Ah... that's very interesting. Thanks for the timely clarification @jeff

I'll send you a PM to say why!

Save energy... recycle electrons!


   
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Mars
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@jeff, aren’t Bulb still trading in Europe?

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(@prjohn)
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An interesting article discusses electricity companies buying on the futures market and profiting, this is proving beneficial to creditors of bust companies. 

https://newsnet.scot/news-analysis/uk-governments-hit-on-our-energy-bills-gets-even-worse/


   
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(@batalto)
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@prjohn I'm going to take a leap of faith and assume this is not an unbias source

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(@prjohn)
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@batalto There is bias in every editorial and media report. It's what you take out of it and are able to substanciate that is important. The very fact that this editorial gives detailed information regarding Peoples Energy is which gives it substance. It can be easily verified. Much can be opinion but it is up to you to establish the strength of that opinion in doing your own research. Just because you don't like the source doesn't make it less meaningful.


   
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