Energy price rises and price cap discussion.

[Deltic1961]

We're currently fixed with Eon until October which is unfortunate. My wife runs a business from home so we have to heat a log cabin in the garden in the winter months, apart from that we have a normal 3 bedrom home.

She's paid £2500 to get a professional Panasonic air pump AC unit fitted which should reduce the cost of heating her building this year hopefully.

Our most expensive bill (January to February) last year was £344. Running that in to the new price cap figures it would now be £988. How the hell can any family / small business carry that increase, and that's just one month!

Unless something happens pronto this country will literally disintegrate over the next few months.

 

[Bletchleyite]

A roll of loft insulation is £22.50. Even if you rent, it seems obvious that this is a sensible purchase...

 

[Howardh]

We're currently fixed with Eon until October which is unfortunate. My wife runs a business from home so we have to heat a log cabin in the garden in the winter months, apart from that we have a normal 3 bedrom home.

She's paid £2500 to get a professional Panasonic air pump AC unit fitted which should reduce the cost of heating her building this year hopefully.

Our most expensive bill (January to February) last year was £344. Running that in to the new price cap figures it would now be £988. How the hell can any family / small business carry that increase, and that's just one month!

Unless something happens pronto this country will literally disintegrate over the next few months.

Think many businesses will simply shut down Nov-Mar as they simply will be unable to heat the building, and unheated means unhappy customers who won't turn up and/or the workforce tryng to work in the cold which might be illegal anyway.

It's covid 2.0 in a way, a complete winter lock/shutdown but this time with next to no help? See you in spring...hope we all come out the other side.

As an aside, seen a few comments in the right-wing newspapers such as "I'm gonna spend the winter abroad" - top idea! But unless they can get a residence visa, or Schengen visa, they will be limited to 90 days over the winter if they want to stay in a southern EU/EEA country. Think that's the route I'll take, two weeks "home" using the minimum of power and a week or so abroad. Especially if pubs etc shut down so there's nowhere to go here for relaxation.

 

[duncanp]

Unless something happens pronto this country will literally disintegrate over the next few months.

I think something will happen pronto, not least because of the electoral impact of the latest increase, not to mention others in the pipeline for next year.

If the new government doesn't get a grip on this, then Sir Kier Starmer will become Prime Minister in 2024, and that, if nothing else, will give the government an incentive to do something.

 

[RichJF]

A lot of talk on various sites & at work that the govt shouldn't just target the very poorest, but tier a support package for those on average/just above average/proven single incomes who have regular jobs but due to geopolitical situations find themselves on the brink of fuel poverty.

The largest help goes to the very poorest, then income/means-based support up the ladder until you reach the "high earning" threshold.

 

[Bantamzen]

A roll of loft insulation is £22.50. Even if you rent, it seems obvious that this is a sensible purchase...

Assuming you live in a house with a loft, its not so easy in apartment blocks. However my strategy is replacing some of my curtains with thicker ones, and starting to renew my West Yorkshire MCard again (I've been using flex tickets for the 2 day a week commute for a bit), as I plan to spend a lot more time at the office!

 

[najaB]

As an aside, seen a few comments in the right-wing newspapers such as "I'm gonna spend the winter abroad" - top idea! But unless they can get a residence visa, or Schengen visa, they will be limited to 90 days over the winter if they want to stay in a southern EU/EEA country. Think that's the route I'll take, two weeks "home" using the minimum of power and a week or so abroad. Especially if pubs etc shut down so there's nowhere to go here for relaxation.

I'm not right-wing by any stretch, but I am a dual national. I'm seriously considering spending a considerable portion of November through March somewhere a little warmer.

 

[RT4038]

We're currently fixed with Eon until October which is unfortunate. My wife runs a business from home so we have to heat a log cabin in the garden in the winter months, apart from that we have a normal 3 bedrom home.

She's paid £2500 to get a professional Panasonic air pump AC unit fitted which should reduce the cost of heating her building this year hopefully.

Our most expensive bill (January to February) last year was £344. Running that in to the new price cap figures it would now be £988. How the hell can any family / small business carry that increase, and that's just one month!

Unless something happens pronto this country will literally disintegrate over the next few months.

I am not suggesting that there does not need to be some temporary help, but people have made decisions in the past based on the energy prices being 'X'. Of course they are World energy prices, and seem likely to be at this or similar 'Y' level for some time going forward. Therefore decisions are going to have to be made by individuals (and companies) with the new price in mind, however unpleasant that may be. An example of this would be - is it really affordable to have 5 different parcel delivery companies duplicating each others delivery round, and have shops in the town? Is it really necessary to heat the house and the log cabin? Energy prices at 'Y' levels are really going to change the way we live

We are already seeing that recycling is becoming uneconomic (temporarily - the energy cost of raw materials will rise too) because the level of energy to reprocess is too costly. It is going to be a difficult adjustment, but no doubt we'll survive. Only the energy efficient businesses will.

 

[Bantamzen]

I'm not right-wing by any stretch, but I am a dual national. I'm seriously considering spending a considerable portion of November through March somewhere a little warmer.

Quite honestly it might actually turn out to be cheaper to go abroad for a few weeks than get slammed by vast energy price rises!!

 

[najaB]

Is it really necessary to heat the house and the log cabin?

The vast majority of the population don't have "a house and a log cabin". There's a sizeable portion (c. 35%) who don't even own a house.

 

[RT4038]

The vast majority of the population don't have "a house and a log cabin". There's a sizeable portion (c. 35%) who don't even own a house.

Quite right - me neither! But the point I am making is that we are all going to have to make adjustments and be more energy efficient (because most of us can't be afford any other). As I suggested, there will have to be some temporary relief, but that is not sustainable and our lifestyle is going to change. This happened after the '73 crisis, but we gradually got over that and readopted our profligate ways. (Discovery and exploitation of North Sea oil & gas mostly) . Too much reliance on Russia (not necessarily the UK but the total World market), who are using their energy reserves to increase their dominance in the world.
Possibly more blocks of flats cheaper to heat than individual detached houses?

Quite honestly it might actually turn out to be cheaper to go abroad for a few weeks than get slammed by vast energy price rises!!

Maybe, but travelling abroad will get more expensive ...... Swifts and swallows do it every year!

 

[Nicholas Lewis]

We'll only need to worry if they stay that high for an extended period, rather that it being a transitory spike.

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.

 

[Deltic1961]

I worked for Total in Aberdeen until a year ago. Oil & Gas is dead.

The whole company have rebranded to a green facing business. Yes they still make a fortune in the North Sea but there will be no further O&G investment or development.

Between bad "dirty oil" PR, Greta and Net Zero they've been forced to change direction by their investors.

 

[najaB]

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).

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.

 

[Howardh]

Quite honestly it might actually turn out to be cheaper to go abroad for a few weeks than get slammed by vast energy price rises!!

Oh it will. I've found a decent room for £25/night, inc breakfast - the hotel has an indoor pool etc; how much to sit at home in january when the price goes up even further?? Might as well spend it abroad.

 

[Nicholas Lewis]

There is a cost to keeping you connected so I have no issue with them. That cost is increasing (due to factors like e.g. diesel in maintenance vans), so it should increase, but not as much as the per kWh rate.

Ive got no problem with the above but but there is lots of hidden extras in teh standing charge that has pushed it up beyond what it shouls have been.

1. we are still contributing to bailing out the failed suppliers - why should that fall on individual consumers. I never changed and am penalised as a result. Also teh failed suppliers directors have walked away with millions. This was utter mis-management by OFGEM. Oh and that's before Bulb is added in which because they are buying on the spot market all the time could result in another £150 being taken off us. Why aren't the media pushing this stuff.

2. failed suppliers largely took on people who couldn't afford to pay half the time and they have huge unpaid bills which are going to have to be covered.

3. the failed suppliers never paid there ROC costs these are being socialised through the standing charge

4. renewables get first call to generate but just when it gets windy NG say to them the transmission system is overloaded and we can't take your power so we will pay you to switch off. That is bad enough but NG then have to get that power from elsewhere and the only people that can respond in real time are CCGTs. They say ooh gas is very expensive today i can sell you it at £700/MWh (or 70p/unit ie more than the revised cap). This is accumulating extra charges known as balancing costs which are retrospectively recovered.

So everyone is on the make in this system its broken and as minimum it needs windfall taxes on every element of the electrical supply chain but this is a national emergency so my view is it needs nationalising and the Electricity Supply Operator given a remit to supply energy at the least amount of cost they can with what they've got.

 

[RT4038]

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.

Perhaps not needed to be quite so pessimistic. Demand will drop, which will lower the price. The increased prices will spur on exploration. Research into substitution will be spurred on.

I worked for Total in Aberdeen until a year ago. Oil & Gas is dead.

The whole company have rebranded to a green facing business. Yes they still make a fortune in the North Sea but there will be no further O&G investment or development.

Between bad "dirty oil" PR, Greta and Net Zero they've been forced to change direction by their investors.

Yes, but expediency rules ok! Their Gas/Oil at their prices/influence or ours? Expect that resolve to start sliding.....

 

[Howardh]

Maybe, but travelling abroad will get more expensive ...... Swifts and swallows do it every year!

Well I spend a lot travelling at home, so for me it's simply transferring the cost from home travel to a return flight abroad. Some airlines are a darned sight cheaper than a return ticket to London from Manchester, including advance and railcards! Once tucked away in a resort there's no real need for any further spending on travel there, just walk up and down the coast!

 

[RT4038]

Ive got no problem with the above but but there is lots of hidden extras in teh standing charge that has pushed it up beyond what it shouls have been.

1. we are still contributing to bailing out the failed suppliers - why should that fall on individual consumers. I never changed and am penalised as a result. Also teh failed suppliers directors have walked away with millions. This was utter mis-management by OFGEM. Oh and that's before Bulb is added in which because they are buying on the spot market all the time could result in another £150 being taken off us. Why aren't the media pushing this stuff.

2. failed suppliers largely took on people who couldn't afford to pay half the time and they have huge unpaid bills which are going to have to be covered.

3. the failed suppliers never paid there ROC costs these are being socialised through the standing charge

4. renewables get first call to generate but just when it gets windy NG say to them the transmission system is overloaded and we can't take your power so we will pay you to switch off. That is bad enough but NG then have to get that power from elsewhere and the only people that can respond in real time are CCGTs. They say ooh gas is very expensive today i can sell you it at £700/MWh (or 70p/unit ie more than the revised cap). This is accumulating extra charges known as balancing costs which are retrospectively recovered.

So everyone is on the make in this system its broken and as minimum it needs windfall taxes on every element of the electrical supply chain but this is a national emergency so my view is it needs nationalising and the Electricity Supply Operator given a remit to supply energy at the least amount of cost they can with what they've got.

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. Don't just blame Governments or businesses - 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 - they need more investment in expensive kit and this means higher prices to pay for that.

Well I spend a lot travelling at home, so for me it's simply transferring the cost from home travel to a return flight abroad. Some airlines are a darned sight cheaper than a return ticket to London from Manchester, including advance and railcards! Once tucked away in a resort there's no real need for any further spending on travel there, just walk up and down the coast!

But for how long - with higher oil prices, higher costs of running airports, higher salaries to get staff - and passengers having less money to buy tickets because of higher taxes (to pay for help for those less well off) and higher commodity prices because of higher energy costs.

 

[Deltic1961]

Great if you're in that situation but you're very much the minority

Small businesses can't double or treble their prices, in fact my wife has noticed lately are being far more price conscious than even a couple of months ago.

So what happens when your customers want to pay less but your costs greatly increase?

 

[Herefordian]

A roll of loft insulation is £22.50. Even if you rent, it seems obvious that this is a sensible purchase...

You're, incorrectly, assuming everyone is in a position to afford to do this.

Sufficient material would be around £100. If you can't install it yourself, another £200, maybe more, in labour costs.

Yes, it's a one-off payment, but I have customers who can barely afford to live. They don't have £300-£400 lying around.

 

[RT4038]

Great if you're in that situation but you're very much the minority

Small businesses can't double or treble their prices, in fact my wife has noticed lately are being far more price conscious than even a couple of months ago.

So what happens when your customers want to pay less but your costs greatly increase?

They can't buy your stuff, or not so much of it, and the business will need to cut costs to survive? We are likely going to go through a hard adjustment - there isn't going to be the money around and both small and large businesses are likely to have lean times (unless you are selling loft insulation or some other energy saving things, of course) Hence why I think the current labour shortage will be short lived.

 

[Bletchleyite]

You're, incorrectly, assuming everyone is in a position to afford to do this.

Sufficient material would be around £100. If you can't install it yourself, another £200, maybe more, in labour costs.

Yes, it's a one-off payment, but I have customers who can barely afford to live. They don't have £300-£400 lying around.

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.

 

[najaB]

Hence why I think the current labour shortage will be short lived.

And how are we going to pay the unemployment benefits?

 

[Xenophon PCDGS]

I'm not right-wing by any stretch, but I am a dual national. I'm seriously considering spending a considerable portion of November through March somewhere a little warmer.

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

The vast majority of the population don't have "a house and a log cabin". There's a sizeable portion (c. 35%) who don't even own a house.

....and even fewer have a log cabin as their solitary abode.

 

[RT4038]

And how are we going to pay the unemployment benefits?

By everybody being poorer, I expect.

 

[brad465]

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

this is an absolutely staggering chart, take a second to look at it closely

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...

 

[birchesgreen]

Interesting i see the Chancellor has said people should save money by curbing their energy use, good idea i am choosing not to have my horse stables heated as i'd have to pay for it myself...

 

[Bletchleyite]

Interesting i see the Chancellor has said people should save money by curbing their energy use, good idea i am choosing not to have my horse stables heated as i'd have to pay for it myself...

People should certainly do that, a silver lining in the cloud is reduced carbon emissions through less profligacy of energy use. Don't for instance heat your house to 22 degrees in winter and sit there in shorts and a T-shirt, heat it to 18-19 and wear long trousers and a thick jumper.

 

[Deltic1961]

As a family we're already putting an action plan in place, but that doesn't mitigate the vast increase in standing charges.