Energy Prices (Strictly NO referrals!)

[dl8860]

I enjoyed this Bloomberg Terminal screen yesterday

Yes, that's Hour ahead TTF Gas at NEGATIVE 15.78EUR/Mwh

Created some excellent spot pricing of Electricity across Europe for a while

Warm weather, full storage, LNG tankers with no where to offload

lol.

So everything is fine now?

Genuinely though, in laymans terms (as I and most others don't really understand the relationship between wholesale gas and retail price), is the pressure on gas prices now much less than it was 2 months ago? Will SVR start to come down?

 

[bigmike20vt]

So everything is fine now?

i wish it was so easy. the problem is we do not have enough storage...... hindsite is 20:20 and storage is expensive so i am not going to go off on one there....... but the bottom line is because it is mild we have a glut of energy with no where to put it....... but if we get a beast from the east scenario that glut will very soon be used up and demand will far outstrip supply.
it is possible i am kidding myself, i am not an expert, but i like to think that with the right people making the right decisions this will fix ittself over the coming decade...

going big on on shore wind, more offshore wind & solar, then with predictable tidal, wave and nuclear as a backbone.... and then if we get more people with electric cars on agile tariffs ..... and even if they cant dump the energy back to the grid, at least dumping it into owners homes at peak times to remove strain from the grid and then charging when demand is at its lowest, i truly believe this can be solved, and in a green sustainable way.

but the next few years are going to be hard, esp if Russia is not on the table to supply gas/oil to EU during this transitional period.

 

[413x]

i wish it was so easy. the problem is we do not have enough storage...... hindsite is 20:20 and storage is expensive so i am not going to go off on one there....... but the bottom line is because it is mild we have a glut of energy with no where to put it....... but if we get a beast from the east scenario that glut will very soon be used up and demand will far outstrip supply.

Yeah. Spot prices don't mean much for end users.
Price will still be high, and any long cold snaps will still send prices upwards

 

[TrojanWhore]

My direct debit with Shell Energy is going up to £139 a month from £120, and £54 a month before all this started.

This is me living by myself and I'm not exactly wasteful with energy!

Also with Shell since being moved over from my previous supplier, with whom I was paying around £70 a month. Been paying £170 since the move and now they want to up it to around £230, despite me going from a small debt at the switchover to nearly £300 in credit now.......So it doesn't appear to be that strongly linked to actual usage.

 

[dl8860]

i wish it was so easy. the problem is we do not have enough storage...... hindsite is 20:20 and storage is expensive so i am not going to go off on one there....... but the bottom line is because it is mild we have a glut of energy with no where to put it....... but if we get a beast from the east scenario that glut will very soon be used up and demand will far outstrip supply.
it is possible i am kidding myself, i am not an expert, but i like to think that with the right people making the right decisions this will fix ittself over the coming decade...

going big on on shore wind, more offshore wind & solar, then with predictable tidal, wave and nuclear as a backbone.... and then if we get more people with electric cars on agile tariffs ..... and even if they cant dump the energy back to the grid, at least dumping it into owners homes at peak times to remove strain from the grid and then charging when demand is at its lowest, i truly believe this can be solved, and in a green sustainable way.

but the next few years are going to be hard, esp if Russia is not on the table to supply gas/oil to EU during this transitional period.

I do understand everything in your post, but we've had a lack of storage forever. So a lack of storage doesn't fully explain why retail prices today (undiscounted) are triple or more of what they were 2 years ago, when wholesale prices now look to be nowhere near triple what they were 2 years ago.

 

[chrcoluk]

We need this guy?

Bolaji Balogun gets excited over Green Energy Solution | Lions Den Nigeria

Okey Ese stepped into the Den looking for a N40 million investment in exchange for a 2% ownership in his clean energy production company, Powerstove Energy. ...

www.youtube.com

 

[jpaul]

So a lack of storage doesn't fully explain why retail prices today (undiscounted) are triple or more of what they were 2 years ago, when wholesale prices now look to be nowhere near triple what they were 2 years ago.

The gas we are now using was purchased in advance at the higher prices when they expected demand to be higher,
- so, it's not like the UK suppliers are currently making excess profits (just the drilling companies), that can subsidise prices if the weather turns and demand increases.
when they set guaranteed SVR rate too, they smooth out variable advanced prices they pay, so excess october monies will subsidise nov-feb.

Been paying £170 since the move and now they want to up it to around £230

​

My direct debit with Shell Energy is going up to £139 a month from £120

both of those increases are supplier anticipating worse weather and usual seasonal increased usage, you can tell them if you have your heating off/low, so that their estimate is wrong

 

[bigmike20vt]

I do understand everything in your post, but we've had a lack of storage forever. So a lack of storage doesn't fully explain why retail prices today (undiscounted) are triple or more of what they were 2 years ago, when wholesale prices now look to be nowhere near triple what they were 2 years ago.

yeah... i am not sure....... BUT (am guessing) perhaps those costs 2 years ago were artificially low. after all look how many energy companies not only went bust in the same period, but when the books were looked at some of them look like they were never really viable.

Also given the gas is bought in advance, i imagine it will take time for any cheap prices today to show on our bills.

Maybe i am wrong, i am certainly no appologiser for big energy profits or a fan of being ripped off..... but something seems inherently wrong with the energy prices over that period otherwise I doubt dozens would not only have gone under but never seemed to turn a profit, and that is surely adding to our prices we are paying now (isnt a good chunk of our standing charges to cover those failed companies?)

(btw i think a lot of our storage was only shut down in 2017 or 2018 so not that long ago)

what terrifies me, is that we - and by we i mean we as a species - will give up on reducing carbon and other emissions and aim for short term price decreases at the expense of (not even long term any more) climate change..

 

[TrojanWhore]

@jpaul Thanks, I figured it would be that, but thanks for pointing it out in case I wasn't aware.

Tbh it's not super painful for me at the moment so will probably leave it as is for now and see where I am in a few months, I was more put off by the initial almost 4x increase

 

[dl8860]

yeah... i am not sure....... BUT (am guessing) perhaps those costs 2 years ago were artificially low. after all look how many energy companies not only went bust in the same period, but when the books were looked at some of them look like they were never really viable.

Also given the gas is bought in advance, i imagine it will take time for any cheap prices today to show on our bills.

Maybe i am wrong, i am certainly no appologiser for big energy profits or a fan of being ripped off..... but something seems inherently wrong with the energy prices over that period otherwise I doubt dozens would not only have gone under but never seemed to turn a profit, and that is surely adding to our prices we are paying now (isnt a good chunk of our standing charges to cover those failed companies?)

(btw i think a lot of our storage was only shut down in 2017 or 2018 so not that long ago)

what terrifies me, is that we - and by we i mean we as a species - will give up on reducing carbon and other emissions and aim for short term price decreases at the expense of (not even long term any more) climate change..

The Rough gas storage facility was shut down around then yeah. I actually did some engineering work for some of the platforms there. Centrica storage who own it asked UK govt for some subsidy to help keep it open as the structures and equipment is very old there, but nothing was forthcoming, and at the time it wasn't profitable to keep it open. They are now scrambling to reopen it to help with our storage woes, but it won't be easy, having been cold stacked for a few years.

The natural reservoirs are brilliant storage, and apparently could be useful for hydrogen storage in future if/when we move to a full renewable/hydrogen storage energy mix.

 

[norm]

Also with Shell since being moved over from my previous supplier, with whom I was paying around £70 a month. Been paying £170 since the move and now they want to up it to around £230, despite me going from a small debt at the switchover to nearly £300 in credit now.......So it doesn't appear to be that strongly linked to actual usage.

Yep my account is showing £190 in credit also.

They've probably realised they can profit off rising interest rates by hoarding people's money.

 

[Gregvivi0401]

Yep my account is showing £190 in credit also.

They've probably realised they can profit off rising interest rates by hoarding people's money.

Shell is a pice of **** they took over my last compamy due to bankuptcy last october and still did not pay me for overpaying my contract of £158.

 

[TrojanWhore]

Yep my account is showing £190 in credit also.

They've probably realised they can profit off rising interest rates by hoarding people's money.

I doubt it's anything that nefarious, although they do appear to be a bit of a PITA to deal with. As Jpaul said above it's just that they are (over) estimating an increase in usage during colder months, my previous supplier also did this but back then we were talking about much smaller figures so I wasn't paying as much notice to it.

I had a look at the account online the other day while submitting readings and it appears to be very simple to change to variable (actual usage) DD if you wanted to do that, I'm just not sure how it would deal with credit balance and the government support package and as I said, it's not causing me much pain at the moment.

 

[chrcoluk]

It might be a flaw of the software they use, when I mentioned Octopus were really extremely estimating my energy use to someone on MSE, that person seemed to have some knowledge of what software they use and pretty much confirmed if you not in the typical usage pattern of high energy use in winter it will over estimate.

Octopus did have a beta feature which showed the estimates for the current year monthy by month, unsurprisingly it looks like its been pulled as for me it was a fairy tale estimate for the winter months, even for the whole year, but just complete craziness in winter.

 

[~Divine~Wind~]

With some of the current fixes going ape with the exit fee's we never bothered.

Current prices are:

Electricity - Next Flex​

32.24 p/kWh 49.93 p/day
(All rates inc. VAT)

Gas - Next Flex​

10.20 p/kWh 28.48 p/day
(All rates inc. VAT)

Im guessing they won't be bothered when we move and the new place is hooked up with BG atm.
Are BG as horrendous as they've always been when utterly gouging prices before you sign up?

Eon currently estimate us at £3698.31 per year - which is miles off our actual usage.
Paying 200 a month DD and were floating a little over £0 owed haha

 

[Gammawolf]

Im guessing they won't be bothered when we move and the new place is hooked up with BG atm.
Are BG as horrendous as they've always been when utterly gouging prices before you sign up?

Eon currently estimate us at £3698.31 per year - which is miles off our actual usage.
Paying 200 a month DD and were floating a little over £0 owed haha

Considering theres a price cap and your current prices are at the cap i don't see how you can be gouged for prices before signing up. Also i'm failing to see how their estimate is miles off your usage - we are just coming into winter and if you are paying £200 a month and going into winter with a balance of £0 then you will be going into deficit with them in the up coming months (or your winter usage is the same as summer which would be very abnormal). Unless you are effectively borrowing money from them by going into deficit in winter and letting summer get you back to £0 (which i would be surprised if they let you do as the energy companies are not in the business of loaning money out).

As said many times, you can switch to variable direct debit. I did it with BG and it took 10 minutes over webchat, they asked for readings, generated a end of period bill and now i just pay for what i've used every month.

 

[MrKnifey]

My business unit elec bill was £67 average a month last year, £164 last month. £303 this month..

 

[squerble]

I deliberately excluded laptop chargers from the base load as they’re always switched off when not in use, but you reminded me I didn’t have the PC, monitor or speakers switched back on at the wall. So now with PC shut down, monitor in power save and speakers in standby it’s 40W

EDIT: I’m doing that little nerdy thing now where I check how much power everything uses. I jump up to just under 180W load with base load plus both the fridge freezer and drinks fridge cycled on. Happy with that. Everything else we run is “luxury” so just gets added on top.

Now that a bit of time has passed, I can see my normal "base load" including fridge cycling averaged in is about 68W. I'm fine with that well, I say "fine with that", it's still going to be about £218/year just to have my wifi and fridges on 24/7

 

[Yaayuh!]

My Super-Weed growing business unit elec bill was £67 average a month last year, £164 last month. £303 this month..

 

[Alex_6n2]

So everything is fine now?

Genuinely though, in laymans terms (as I and most others don't really understand the relationship between wholesale gas and retail price), is the pressure on gas prices now much less than it was 2 months ago? Will SVR start to come down?

Halfway there to being "fine". These were short lived price crashes as leaving gas on LNG tankers at sea costs money. But the overall trend is down on gas prices yes.

Oil and Gas retailers are like any company by trying to reduce their risk exposure and making plans for the future. One way they do that is to hedge and agree future contracts ("Gas futures") at set prices

Most contracts for Nov/Dec/Jan/Feb were agreed around the 350Eur/MWh. Some more, others less

Big picture, more LNG is coming on stream to replace the hole in Europe supplies left by Russia. This isn't a quick process, but the USA has A LOT of gas in places like Texas due to fracking and horizontal drilling techniques. Qatar is also ramping up, as are some African nations.

Australia is one of the other big exporters but they sell mostly to Asia. Depending on what China does with Taiwan they might change their mind on this, but shipping LNG from Oz to the EU is expensive.

Long term market dynamics of high prices will drive more supply. Putin will hopefully be left wondering what the hell to do with all the gas no one wants (he needs to build new pipelines to China, but this takes time)

In 5 years time the EU will have shifted its supply chain away from Russia (although probably not to zero), which will benefit the USA most I think. And balance will be restored to somewhere near ~50EUR/Mwh

Average TTF Gas futures are now being agreed around the 100EUR/Mwh mark, which is much closer to a fair assessment of the supply/demand balance in Q4 22/Q1 23. But this is still above the pre-2021 average of ~30EUR/Mwh