Energy price rises and price cap discussion.

[birchesgreen]

I don't have house heating myself but yes invest in jumpers. Fleece lined slippers FTW.

 

[ainsworth74]

If that be the case, your postings during the winter months on this website will be sadly missed,

The Forum's visa requirements for access by those overseas are very lax, I'm sure that @najaB will still be able to access the Forum even if they are in a more warm climate

 

[Herefordian]

It's that or paying more than that on your energy! Any able bodied adult can DIY it, it's itchy but not unduly difficult.

Where are people who can barely afford to live getting £300-£400 from?

Or are they going to pay for insulation, and potentially labour costs, with magic beans?

How is a disabled person going to install their own loft insulation?

People should certainly do that, a silver lining in the cloud is reduced carbon emissions through less profligacy of energy use,.

I have a customer who, after cutting back as far as they can, still can't afford to charge their wheelchair.

Please stop assuming everyone's circumstances are ideal and they can just do X, Y or Z.

 

[Bletchleyite]

Where are people who can barely afford to live getting £300-£400 from?

Or are they going to pay for insulation, and potentially labour costs, with magic beans?

How is a disabled person going to install their own loft insulation?

I have a customer who, after cutting back as far as they can, still can't afford to charge their wheelchair.

Please stop assuming everyone's circumstances are ideal and they can just do X, Y or Z.

We seem to be rolling out the RUK Standard Minority again.

Everyone who CAN do these things SHOULD do them. It is much more feasible for the Government to help those who CANNOT than everyone, including those who just stubbornly WILL NOT.

 

[Nicholas Lewis]

But everyone was so happy when these private companies brought the cost of energy down 20-30 years ago. How did they do that - by burning off the fat and the cost of capacity redundancy for when things go wrong.

We had plenty of winter margin but large combustion directive put paid to running hours of the older coal fried power stations then they slapped carbon taxes on their emissions so they were being pushed down the merit order and the likes of powergen and national power started getting rid of them. Then govt started getting worried so bought in the capacity market to pay owners to keep the assets available (thats added to the standing charge as well). Oh and in between that you hasd the likes of Alok Sharma doing photo ops of blowing up the power stations before the boilers were even cold. At least the Germans who have pushed renewables far more than us had the savvy to mothball their coal fired stations so they can bring them into play this winter. We don't have that luxury.

Don't just blame Governments or businesses

I didn't i blamed OFGEM ok and arms length body of government but who are independent of government has shown to be utterly wanting they fuelled the supplier market to drive down prices and licensed suppliers who were totally out of their depth about the energy market. And of course the irony is the big six have had to take over their customers so we are largely back to square one but at a cost of 7B, once include Bulb, which is being dumped back on the consumer.

- consumers really liked it too, flitting from supplier to supplier to get cheaper prices... cheaper ... cheaper. We are where we are - no point in blaming anyone. But how to put it right? This remit of 'the least amount of cost with what they've got' is nonsense

I should have explained better currently wind gets put on the system first with the ESO full aware that it is likely to have to constrain it off and call upon short notice expensive gas to cover loss. Better to run the system taking full cognisance of the constraints so you have gas on running baseload at cheaper prices and not pay the windmills to switch off.

- they need more investment in expensive kit and this means higher prices to pay for that.

National Grid/Scottish Power Networks/Scottish Hydro Electricity Transmission are spending billions on the grid to enable it to connect more wind power and massively reduce the amount of money they have to spend on constraints every year. They have demonstrated that it will pay for itself in the long run but they've been bogged down for years in consenting and planning morass which has delayed key projects some for over five years. Back in the 50/60's the grid was built out as a priority to support the country. The same needs to happen now and a strong leader just needs to say it as it is and get on with it.

 

[najaB]

We seem to be rolling out the RUK Standard Minority again.

Surely if they are standard then, by definition, they aren't in the minority...

 

[DynamicSpirit]

Oh, there's zero chance that we'll go back to the era of cheap gas, but there's every chance we'll get back to cheaper than vodka gas.

There's every chance that a more moderate US stance towards Iran could unlock their reserves (potentially larger than Russia's), not to mention vast quantities of non-traditional gas reserves in the US. On the demand destruction side, there is a lot of investment in renewables and a new generation of nuclear is likely on the way - as an example,. I was reading yesterday that Japan has lifted (or is about to lift) their moratorium on new nuclear and NuScale just received US approval for their first SMR. Rolls Royce aren't far behind and I expect an announcement from them any day now of their first order.

I kinda agree with that, but can see two reservations: Firstly, on the demand side, we don't yet seem to have any good mass-market and technologically workable alternative to gas for central heating - the main alternatives that people promote of heat pumps and hydrogen both seem to have considerable issues. So at least for home heating, I'm not sure demand for gas is going to drop that much over the next 10 years.

And I'm not sure I fancy buying gas from Iran any more than from Russia. Both regimes have the same disregard for human rights coupled with the same willingness to try to subvert neighbours (though Iran seems to favour terrorism rather than outright invasion).

 

[ainsworth74]

And I'm not sure I fancy buying gas from Iran any more than from Russia. Both regimes have the same disregard for human rights coupled with the same willingness to try to subvert neighbours (though Iran seems to favour terrorism rather than outright invasion).

Even before the present crisis I've always thought that one of the strongest argument for renewables, nuclear and anything else that reduces reliance on fossil fuels and one which should appeal to everyone isn't particularly the environmental concerns and climate change it's the fact that it means we can stop doing business with awful regimes like Russia, Iran and Saudi Arabia.

 

[Trainbike46]

I kinda agree with that, but can see two reservations: Firstly, on the demand side, we don't yet seem to have any good mass-market and technologically workable alternative to gas for central heating - the main alternatives that people promote of heat pumps and hydrogen both seem to have considerable issues. So at least for home heating, I'm not sure demand for gas is going to drop that much over the next 10 years.

The main way to drop demand from home heating is insulation, a mature technology

On top of that, in some areas district heating is an alternative source of heating (mostly near incinerators, power stations and other industrial facilities that produce waste heat)

Heat pumps only really have one problem: they are expensive to install (currently). However, there have been promising announcements on that front, so hopefully those will come to pass soon

And I'm not sure I fancy buying gas from Iran any more than from Russia. Both regimes have the same disregard for human rights coupled with the same willingness to try to subvert neighbours (though Iran seems to favour terrorism rather than outright invasion).

I fully agree here; I don't think our strategy should involve relying on foreign produced gas long term. Not even from trustworthy countries (like Norway), but definitely not from unreliable/untrustworthy/otherwise problematic countries, like Iran, Russia, Saudi Arabia or Qatar

 

[Deltic1961]

Agreed. Everyone else saw this coming but successive governments have buried their heads in the sand.

 

[Bletchleyite]

I kinda agree with that, but can see two reservations: Firstly, on the demand side, we don't yet seem to have any good mass-market and technologically workable alternative to gas for central heating - the main alternatives that people promote of heat pumps and hydrogen both seem to have considerable issues. So at least for home heating, I'm not sure demand for gas is going to drop that much over the next 10 years.

Heating using electricity (panel heaters, radiators etc) works perfectly fine, it's simpler, safer and infinitely more controllable than gas. Traditionally it's hugely more expensive, but if gas specifically is going to get pricier and pricier and generation migrate to renewables and nuclear then that may not be the case long term.

Passivhaus uses electric radiant or heated air for the tiny amount of heat you need to add, for instance, so this is probably what all new builds should do.

As for heat pumps air to air is a cheaper option than running radiators off it for small properties, though it may be tempting to run it in reverse for aircon!

 

[brad465]

Even before the present crisis I've always thought that one of the strongest argument for renewables, nuclear and anything else that reduces reliance on fossil fuels and one which should appeal to everyone isn't particularly the environmental concerns and climate change it's the fact that it means we can stop doing business with awful regimes like Russia, Iran and Saudi Arabia.

The problem is some powerful folk think that green campaigners stopped our own oil and gas being explored further, causing us to rely on dodgy regimes more. What's more likely is globalisation saw it cheaper to import from them than explore our own (remember the price of oil was a subject of the independence campaign regarding independence economic sustainability of North Sea reserves), and OPEC existed long before climate change concerns were widely discussed. On top of that, unless we nationalised all our production (good luck getting support for that), it would only be sold at global market prices anyway, and our production rates would not have a noticeable impact on supply, so prices wouldn't drop much if at all. Thus the best way to avoid dealing with such regimes is, as you say, to use alternative energy supplies entirely.

 

[Trainbike46]

As for heat pumps air to air is a cheaper option than running radiators off it for small properties, though it may be tempting to run it in reverse for aircon!

If some people running their air-to-air heatpump in reverse for AC in summer prevents heat deaths I think that may be worth it?

 

[Deltic1961]

I think what's peeing off a lot of people is that they were "duped" in to thinking the investment in renewables would mean cheaper bills.

The likes of Bulb and Octopus were full of crap about theyre fuel being 100 percent renewable when that's not the case and prices aren't lower at all.

 

[Trainbike46]

The problem is some powerful folk think that green campaigners stopped our own oil and gas being explored further, causing us to rely on dodgy regimes more. What's more likely is globalisation saw it cheaper to import from them than explore our own (remember the price of oil was a subject of the independence campaign regarding independence economic sustainability of North Sea reserves), and OPEC existed long before climate change concerns were widely discussed. On top of that, unless we nationalised all our production (good luck getting support for that), it would only be sold at global market prices anyway, and our production rates would not have a noticeable impact on supply, so prices wouldn't drop much if at all. Thus the best way to avoid dealing with such regimes is, as you say, to use alternative energy supplies entirely.

The main reason domestic supply has decreased is because we are running out of gas reserves. Another big problem with fossil fuels is that they're not infinite

 

[Bletchleyite]

If some people running their air-to-air heatpump in reverse for AC in summer prevents heat deaths I think that may be worth it?

True, but if everyone runs aircon when it gets above mid 20s we just create another problem.

 

[WelshBluebird]

True, but if everyone runs aircon when it gets above mid 20s we just create another problem.

There of course is a difference between the mid 20's and the mid to high 30's though. If we are going to regularly get more of the higher temps then having something that can double as air conditioning in many buildings isn't going to be a bad idea.

 

[najaB]

And I'm not sure I fancy buying gas from Iran any more than from Russia. Both regimes have the same disregard for human rights coupled with the same willingness to try to subvert neighbours (though Iran seems to favour terrorism rather than outright invasion).

The difference there is that Iran is very much a bogeyman of our (well the USA's) creating. They propped up the last Shah well past the point where they should have, and then punished the Iranian people for having the nerve to choose their own leader. The West has no real reason to get involved in the power struggles between Sunni and Shia - and the blanket sanctions imposed by the USA have had the perverse effect of propping up the regime by giving form to their "us vs them" narrative.

Yes, Iran sponsors terrorist groups, but that is largely in response to the massive amount of support that we have given to the Sunnis in Saudi Arabia and the fact that the West (and the USA in particular) allow Israel to do whatever they want without criticism. Thing is, Iran always was a moderate Islamic country and it still is (as compared to Saudi Arabia) - now, that's not to say that they are anything close to Western liberal countries in terms of values - but women are allowed to work, have their own bank accounts, travel alone, vote, hold public office, etc. which are freedoms that have only started to come to Saudi Arabia in the last few years.

In a perfect world we would not need to import energy at all, but given that we aren't there yet I would much rather engage with Iran economically and culturally and try to help them become more moderate than deal with the likes of Putin's Russia.

 

[kristiang85]

The New Statesman have produced the below graph (shared by FT journalist Jim Pickard), showing the different politician plans to date:

https://twitter.com/PickardJE/status/1562923188039946240

As the title highlights, Starmer's plan does the best for those poorest but is poorly targeted overall, Sunak's plan is better targeted but not very sufficient, and Truss, well, let's just not go there...

What's the y axis scale of this graph? It's hard to see what is defined as "rich" or "poor".

The problem with measures that only target the poorest is that there is a whole swathe of middle class Britain who will also be badly affected, but not get any help. Yes they likely won't go hungry, but if all their income is spent on heating their home, then there is nothing left to contribute to the economy at large... Which in turn affects the poorest again.

It is all one big mess, and I feel it could have been so easily avoided.

 

[Domh245]

True, but if everyone runs aircon when it gets above mid 20s we just create another problem.

Depends - running them in cooling is typically less energy intensive than heating (mostly in terms of them needing to work less hard to maintain a space at 19 against an outdoor temperature of say 5-10, vs 22 against 30, though they are generally more efficienct in heating modes than cooling. If we are talking about much higher temperatures then that's another matter though!)

We should also (eventually, and ideally) reach a point where our peak electricity demand can be met entirely through renewables & nuclear - which will still be there in the summer (potentially even greater supply depending on the extent of PV in the final mix) so that shouldn't pose too much of a problem demand wise

 

[RT4038]

The problem with measures that only target the poorest is that there is a whole swathe of middle class Britain who will also be badly affected, but not get any help. Yes they likely won't go hungry, but if all their income is spent on heating their home, then there is nothing left to contribute to the economy at large... Which in turn affects the poorest again.

Well, yes. 'nothing left' is possibly hyperbole, but those in 'discretionary' spend industries (such as foreign holidays and other leisure pursuits) are probably going to have a hard time for a while, unfortunately.

It is all one big mess, and I feel it could have been so easily avoided.

Avoided - probably. Easily - not so sure about that. People have rather liked the standard of living over the last few years, rather than investing for a rainy (or cold more like) day. Human nature and all that.

 

[najaB]

Avoided - probably. Easily - not so sure about that. People have rather liked the standard of living over the last few years, rather than investing for a rainy (or cold more like) day. Human nature and all that.

If the billions that were withdrawn from the energy companies in the form of dividends had instead been invested then the standard of living for the 1% would have been slightly less opulent and the standard of living of the other 99% would have been unchanged.

 

[yorksrob]

The problem with that approach is the way the industry was privatised. The companies failing are basically retailers. The producers are raking it in due to the high prices.

We (the United Kingdom) owned our North Sea oil and gas reserves, but we sold the right to extract the fuel to the private companies. They are simply using the assets they've paid for to generate the maximum return for their shareholders, as any business would do.

There are similarities with what happened in banking a decade ago. Lots of people got rich in the good times, then the whole house of cards came falling down and everyone else was left to pick up the pieces.

The state always has the right to take control of its assets and resources in times of emergency. Now is no different.

== Doublepost prevention - post automatically merged: 26 Aug 2022 ==

what do you believe is going to make them drop?

Well teh only thing that can is either massive demand destruction (only possible if we want to give up a huge amount of our gains over the last century so unlikely to happen in short term) or we suddenly find a load more gas (equally unlikely as we've spent a decade telling oil & gas they are wanted for muh longer so they haven't bothered to invest in exploration).

So reality is these high prices are here to stay and whilst no doubt they will drift back from the speculative £6/therm you have to remember that the baseline was 50-75p/therm and that ain't ever going to be seen again as like the 70's teh West has badly played its card with those that have the energy and they will do take as much off us as they can although not enough to fully kill our economies but enough to neutralise most of the advantages we've built up over them.

In the name of the global free market, we have allowed ourselves to become beholden to untrustworthy dictatorships.

The West must learn the lesson not to become reliant on its enemies again.

 

[Xenophon PCDGS]

We had plenty of winter margin but large combustion directive put paid to running hours of the older coal fried power stations....

Were these another KFC franchise?

 

[XAM2175]

I think what's peeing off a lot of people is that they were "duped" in to thinking the investment in renewables would mean cheaper bills.

It was never going to happen overnight, though, and we're in this position precisely because we're still very exposed to fluctuations in the cost of natural gas. The more that's invested in renewable generation, the lesser that exposure becomes.

The likes of Bulb and Octopus were full of crap about theyre fuel being 100 percent renewable when that's not the case and prices aren't lower at all.

If you were on a 100%-renewable tariff from those suppliers then you were buying 100% renewable generation to cover your usage (subject to the debate about the degree to which this is or isn't possible), so they weren't "full of crap" unless you don't trust any of the generation source figures.

 

[Deltic1961]

I have a good friend who works in the industry and he says the renewable figures used by these companies are simply untrue.

 

[kristiang85]

Well, yes. 'nothing left' is possibly hyperbole, but those in 'discretionary' spend industries (such as foreign holidays and other leisure pursuits) are probably going to have a hard time for a while, unfortunately.

The hospitality industry is going to be absolutely decimated if nothing is done. That not only will mean horrendous unemployment and vastly reduced receipts to the Exchequer, but we will lose so much of our traditional way of life.

Avoided - probably. Easily - not so sure about that. People have rather liked the standard of living over the last few years, rather than investing for a rainy (or cold more like) day. Human nature and all that.

Putting the blame onto the people rather than the government is plain wrong I'd say. Yes it's good practice to save up (luckily I do, so I should be able to weather this ok), but I was saying again and again that the profligate money throwing that took place during the pandemic was unsustainable, unconscionable and unnecessary and we would all suffer in the long run. As such, now the energy crisis has hit the government has nothing to shield us from this. The energy companies will run off with record profits, which also grates.

But the rot set in 20 years ago as New Labour went on their spending spree when times were very good - as you say, they should have seen the rainy days coming. Gordon brown saying "boom and bust is over" was probably one of the most irresponsible things a politician has said in modern history, and that kind of attitude is the root cause of our issues.

 

[HSTEd]

If you were on a 100%-renewable tariff from those suppliers then you were buying 100% renewable generation to cover your usage (subject to the debate about the degree to which this is or isn't possible), so they weren't "full of crap" unless you don't trust any of the generation source figures.

No, it means the retailer was purchasing renewable energy tokens equivalent to your use. But the time of use is in no way related to the time at which the renewable energy is generated.

 

[yorksrob]

The hospitality industry is going to be absolutely decimated if nothing is done. That not only will mean horrendous unemployment and vastly reduced receipts to the Exchequer, but we will lose so much of our traditional way of life.

Absolutely.

The very essence of the British way of life is at risk without its small businesses.

The French seem to understand this sort of thing so much more clearly.

 

[TheAnswer89]

Any particular reason we will face 300% rises, but French people will only see 4% rises? How is that in any way justifable?