Energy Prices (Strictly NO referrals!)

[McPhee]

One thing that seems to have high support across many who comment on the idea is tiered units, "use more pay more" on unit rates.

However not a sniff of the idea either from the government or the suppliers, it seems the appetite is to discourage light usage rather than encourage it, and of course it means not only households with low usage pay more proportionate to their usage but also households with only one adult pay more per adult than households with more adults.

Historically we seem to have no issue with this on all sorts of billed things, so I dont see tiered units ever coming into affect sadly, and now we have this proposal from two of the suppliers where they will take a big loan with gov as guarantor to keep the cap frozen, if the gov agrees to that, guess whats going up to recover that loan? yep probably the SC. The future sadly is heading more and more to higher SC.

--

I seen 413x's post and the reply to it.

Should be easy to implement, do it on units used per month for SVR, first X units subsidised. Rest not. Or could add more tiers so its more granular. This would also make any subsidisation far cheaper as it wouldnt be a blanket cost reduction on all consumer energy used.

Work from home?
Have young kids who are at home all day?
Retired?
Drive an electric car?
Have electric storage heaters?
Have old, inefficient appliances, and unable to replace them (due to, for example, not having the money, or renting)?

Then look forward to even higher energy bills than forecast! Because apparently it's unfair that you pay the same unit rate as someone whose life circumstances mean they are hardly at home!

Let's reduce the bills of those who are about to be paying £150/month by increasing the bills further for people who are about the be paying £600+ per month. Stellar idea. What could possibly go wrong there?

Consider two customers. One uses 100kWh of electricity per month. By the time the price cap goes up, they will be paying an extra ~£40/month for electricity vs 18 months ago. Now consider someone who uses 600kWh per month. The cost of their usage will be up ~£240/month. Do you really think that £240/month increase isn't already an incentive toward cutting usage? Chuck gas in on top, and many are going to be struggling to pay what will amount to a £600+ per month bill. But apparently that isn't enough of a problem already, and this person's bill needs to be higher so that the first person's bill can be lower?

 

[HungryHippos]

Unfortunately for us, we are quite light users as we aren't using much during the day, unless it's school holidays.

I would find it hard to justify solar if you're not using at least 10kwh per day or so.

That would put your usage at around 3650kwh per year, and a reasonable 4kw system can generate about that as well on the right roof layout, which at least gives a chance of making the system efficient.

Ultimately my argument on installing solar is if the quote makes sense, and you have the capital, I expect install costs are high at the moment as people are busy trying to get solar installed.

Electric heaters are kind of inefficient, best heating method with electric is probably something like mini-split AC, as then you can use 1kwh of electric to generate 3-4kwh of heating. But the cost to install mini-split isn't nothing either.

Solar won't help people heat their homes in winter either which is the main problem coming.

True, but it offsets the yearly electric bill, which frees up additional capital for the winter gas bill.

It's more of an indirect benefit to utility bills in general.

What happens when people get to the stage only their fridge and freezer is being used and it's still too costly by April/Summer?

Even my large American, probably fairly inefficient one, was down as using 389 kwh per year. This kind of scenario would be unlikely. at £0.50 per kwh that would £194.50 for the year for the fridge/freezer.

People need to take the real cost of things into consideration here.

 

[scarps]

No idea what these people are on! you can't make this stuff up FFS,

Taken from the bbc site.

"under plans drawn up by the Treasury, doctors would be able to write prescriptions to give people money off their energy bills.
Under the proposal, GPs would hold a patient consultation and verify they need help, before writing a prescription. Money would then either be given in cash or as a voucher."

Well that would be all well and good but it's easier to find a Dodo than a GP currently than will have a look at you.

 

[GIBURROWS]

Oh, so we can expect even more empty shops on the high street in the near future then?

Every town could do with a second Starbucks!

 

[LabR@t]

What happens when people get to the stage only their fridge and freezer is being used and it's still too costly by April/Summer?

Anarchy

 

[Freefaller]

Every town could do with a second Starbucks!

hopefully nowhere near me!

That literally would be the end of the world.

 

[GIBURROWS]

hopefully nowhere near me!

That literally would be the end of the world.

Then you must need another charity shop...

 

[Freefaller]

Then you must need another charity shop...

We've already got 3 in our tiny town of less than 9000 people! :Eek:

The only "big" stores we have is a Costa and a Waitrose. The rest are all locally supplied stores (butcher, greengrocer, baker etc...).

Joking aside the charity shops have never been busier. If you walk down the high street they're really always full of people.

 

[Alex_6n2]

Even my large American, probably fairly inefficient one, was down as using 389 kwh per year. This kind of scenario would be unlikely. at £0.50 per kwh that would £194.50 for the year for the fridge/freezer.

People need to take the real cost of things into consideration here.

This.

Things are gonna be tough, but for the majority of people (middle income working families) it won't be the end of days

It also won't last forever. Although I appreciate it feels like that when going up the curve. Just look at all the commodities smashed by Covid (Lumber, steel, shipping containers). All now falling rapidly in price

The anarchists and anti government types will use it as a good excuse to stoke up emotion and attempt to create unrest though. No surprises there.

 

[HungryHippos]

Then look forward to even higher energy bills than forecast! Because apparently it's unfair that you pay the same unit rate as someone whose life circumstances mean they are hardly at home!

Whilst I would support the idea of encouraging people to use less, I would not do as at the huge expense of the upper tier users necessarily.

I also think the idea is dead in the water because it's too complicated to make it fair.

If doing this it would need a very reasonable subsidised cap, and it would need to take into account several factors, hence why I don't believe it's at all likely to work.

Anarchy

Also not realistic, let's be real here for a minute, a Fridge/Freezer by itself will not cost that much to run, already explained why the concern isn't with basic white goods.

Unless you're running one from the 60-80's era or something where efficiency wasn't really worried about.

It also won't last forever. Although I appreciate it feels like that when going up the curve. Just look at all the commodities smashed by Covid (Lumber, steel, shipping containers). All now falling rapidly in price

I think so, but we need to replace some of that missing gas usage somewhere.

Even war ending between Ukraine and Russia won't necessarily mean we get the gas turned back on, we need to make plans to live in a post-Russian gas world and EU in general needs to become more self-sufficient.

 

[casper_uk]

What about a UK national tariff anyone household can go on? You pay under the market rate for the first X amount of units, the market rate for the next X amount of units, and double the market cap for all units above that. The poor get cheaper electric, it would encourage people to reduce usage, and best of all, the highest users/rich support the less well off. Obviously there would need to be some investigation and work done by the electric companies to figure out the exact prices/number of units. It seems a sensible, more affordable and a better long term solution, than simply printing money to throw at energy companies.

 

[Zenduri]

What about a UK national tariff anyone household can go on? You pay under the market rate for the first X amount of units, the market rate for the next X amount of units, and double the market cap for all units above that. The poor get cheaper electric, it would encourage people to reduce usage, and best of all, the highest users/rich support the less well off. Obviously there would need to be some investigation and work done by the electric companies to figure out the exact prices/number of units. It seems a sensible, more affordable and a better long term solution, than simply printing money to throw at energy companies.

This was a thing until the early 90s then the regulator scrapped it.....

 

[413x]

She might go down as the most damaging prime minister ever.

What a legavy

Work from home?
Have young kids who are at home all day?
Retired?
Drive an electric car?
Have electric storage heaters?
Have old, inefficient appliances, and unable to replace them (due to, for example, not having the money, or renting)?

Then look forward to even higher energy bills than forecast! Because apparently it's unfair that you pay the same unit rate as someone whose life circumstances mean they are hardly at home!

Let's reduce the bills of those who are about to be paying £150/month by increasing the bills further for people who are about the be paying £600+ per month. Stellar idea. What could possibly go wrong there?

Consider two customers. One uses 100kWh of electricity per month. By the time the price cap goes up, they will be paying an extra ~£40/month for electricity vs 18 months ago. Now consider someone who uses 600kWh per month. The cost of their usage will be up ~£240/month. Do you really think that £240/month increase isn't already an incentive toward cutting usage? Chuck gas in on top, and many are going to be struggling to pay what will amount to a £600+ per month bill. But apparently that isn't enough of a problem already, and this person's bill needs to be higher so that the first person's bill can be lower?

The price of electricity has to be paid. Just depends on who.

There also has to be incentive to reduce it.


Something has to give. We aren't going back to 2021 prices probably ever.

 

[Alex_6n2]

I think so, but we need to replace some of that missing gas usage somewhere.

Even war ending between Ukraine and Russia won't necessarily mean we get the gas turned back on, we need to make plans to live in a post-Russian gas world and EU in general needs to become more self-sufficient.

Yes agreed

You can already see this situation driving policy and decision making the right way

• Germany has reversed the decision to de-commission 5 Nuclear reactors (they're still within spec life and safe...)
• Germany to build an LNG port finally
• UK grid strategy to employ more nuclear (e.g. SMRs and new reactors at old sites)
• Companies diversifying their energy usage away from Gas with investments (business cases now make sense)
• EU Gas interconnects with Spain/Portugal being fast tracked (they've been smart and invested in LNG ports already)
• Norway supplies ++
• America will frack more
• Qatar LNG shipping capacity ++
• More people interested in home Solar
• Everywhere looking for energy efficiency improvements
• etc

The expensive/painful energy will last probably thru to 2025, but as projects come on stream and get completed the market will price in less and less Russian risk

Russia will then just sell more to Asia and the West moves away from them

 

[200sols]

What better way to end fossil fuels than to make them hideously expensive

 

[HungryHippos]

What about a UK national tariff anyone household can go on? You pay under the market rate for the first X amount of units, the market rate for the next X amount of units, and double the market cap for all units above that. The poor get cheaper electric, it would encourage people to reduce usage, and best of all, the highest users/rich support the less well off. Obviously there would need to be some investigation and work done by the electric companies to figure out the exact prices/number of units. It seems a sensible, more affordable and a better long term solution, than simply printing money to throw at energy companies.

The problem is we're all on the same grid, and market rates the energy companies pay per kwh is well above current price cap.

Somewhere, somehow, the energy needs to be paid for.

Subsidising in this model still means printing money to throw at the energy companies, but it would ease the burden somewhat and allow people to cut back on usage and maintain cheap bills, but keep the basics ticking over.

Something has to give. We aren't going back to 2021 prices probably ever.

I agree here, £0.28/kwh will be a baseline price for a while yet. Some breakthrough tech like Fusion could change that, but it's always 20 years away

If we're hard capping I would cap electric at £0.40 - £0.50 per kwh and stop it going above that, gas around £0.13 - £0.16/kwh on the same basis.

High cost but not spiralling into depths of madness.

Russia will then just sell more to Asia and the West moves away from them

If I was Asia I would be wary of Russia turning off the gas supply when they feel like it.

What better way to end fossil fuels than to make them hideously expensive

Without a replacement ready though it's hard to say this is good timing.

 

[Nemiyen]

I would find it hard to justify solar if you're not using at least 10kwh per day or so.

That would put your usage at around 3650kwh per year, and a reasonable 4kw system can generate about that as well on the right roof layout, which at least gives a chance of making the system efficient.

Ultimately my argument on installing solar is if the quote makes sense, and you have the capital, I expect install costs are high at the moment as people are busy trying to get solar installed.

Electric heaters are kind of inefficient, best heating method with electric is probably something like mini-split AC, as then you can use 1kwh of electric to generate 3-4kwh of heating. But the cost to install mini-split isn't nothing either.



True, but it offsets the yearly electric bill, which frees up additional capital for the winter gas bill.

It's more of an indirect benefit to utility bills in general.



Even my large American, probably fairly inefficient one, was down as using 389 kwh per year. This kind of scenario would be unlikely. at £0.50 per kwh that would £194.50 for the year for the fridge/freezer.

People need to take the real cost of things into consideration here.

I think we should be close to that number. Since Friday 11am and Sunday at 3pm we've used 24 units. So nearly 12 units per day. That's with us all being at home and using the tumble dryer and cooking food in the Ninja. I'm going to get a morning to morning reading when we're back to normal and I expect we are close to or less than 10 units in a day.

The split AC is definitely something I've been looking into. Especially with the summer this year and if they're more efficient at hearing as well then that's a double bonus. I didn't realise they were as good as that so I'll need to do some more research!

Even at 10kw per day, if we were lucky and could use all of the energy we generate ourselves, it would be 1k per year saved at the current rates. Next year it would be 2k and possibly higher if things keep going up!

In summer though if we did have solar then I wouldn't mind having an AC unit on all the time if it was coming from the "free" energy we were getting!

 

[GIBURROWS]

We've already got 3 in our tiny town of less than 9000 people! :Eek:

The only "big" stores we have is a Costa and a Waitrose. The rest are all locally supplied stores (butcher, greengrocer, baker etc...).

Joking aside the charity shops have never been busier. If you walk down the high street they're really always full of people.

80% off business rates and most charities can barely make ends meet

 

[LabR@t]

*Winter forecast 2022/2023* First in-depth look at Winter and how the weather patterns will develop under the new La Nina influence

Winter 2022/2023 in the United States, Canada, and Europe is forecast to respond to the new La Nina phase, now strengthening in the Pacific

www.severe-weather.eu

Europe is expected to have warmer than average temperatures over most of the northern and north-central parts of the continent. A warmer signal is present over the central area but is not particularly strong.

 

[HungryHippos]

I think we should be close to that number. Since Friday 11am and Sunday at 3pm we've used 24 units. So nearly 12 units per day. That's with us all being at home and using the tumble dryer and cooking food in the Ninja. I'm going to get a morning to morning reading when we're back to normal and I expect we are close to or less than 10 units in a day.

The split AC is definitely something I've been looking into. Especially with the summer this year and if they're more efficient at hearing as well then that's a double bonus. I didn't realise they were as good as that so I'll need to do some more research!

Even at 10kw per day, if we were lucky and could use all of the energy we generate ourselves, it would be 1k per year saved at the current rates. Next year it would be 2k and possibly higher if things keep going up!

In summer though if we did have solar then I wouldn't mind having an AC unit on all the time if it was coming from the "free" energy we were getting!

Solar pairs well with Aircon, although clearly better in the summer. So yes you can essentially cool your house for free on the sunniest days.

Aircon works by heat transference, so typically a good AC unit would be about 3-400% efficient. I think it's possibly slightly more efficient in cooling than heating though.

It still means that you'd need electric to be less than 3-400% of the cost of gas per kwh to make it better to use electric for heating than gas though.