UK Home energy prices

[Lobby]

British Gas new cap rates

Current rate (until 30th September) ▶ New rate (from 1st October)
Gas standing charge 27.220p ▶ 28.485p
Gas unit rate 7.480p ▶ 14.758p

That unit rate is insane!

I got an email from British Gas this week telling me not to worry, as I’m on a fixed rate until November 2023, so no price increases for me this winter. God knows how much I’ll have to pay next when my contract comes up for renewal next year.

[GogLais]

British Gas new cap rates

Current rate (until 30th September) ▶ New rate (from 1st October)
Gas standing charge 27.220p ▶ 28.485p
Gas unit rate 7.480p ▶ 14.758p

That unit rate is insane!

I got an email from British Gas this week telling me not to worry, as I’m on a fixed rate until November 2023, so no price increases for me this winter. God knows how much I’ll have to pay next when my contract comes up for renewal next year.

I’m in the same sort of position, rates fixed until May/July next year.

[Slick]

I would recommend people start to think about buying a generator for the months ahead.

Do you not expect demand to plummet, or at least significantly reduce? It’s time for me to play the “I grew up in a draughty old farmhouse, stone floor, coal fire, ice on the inside of the bedroom windows” card. Did me no harm, well apart from the chilblains.

I'm with you - I grew up wearing four layers and having two duvets in winter. Suffered from chillblains (I have Reynauds as well) and once a chillblain became an abscess - couldn't play rugby for a month whilst it healed meaning I missed a regional trial.

Yes, I expect demand to plummet. But Norway are talking about limiting exports, we have virtually no energy storage and our incoming PM seems hell-bent on pissing off Europe. Finland are preparing for rolling blackouts and they barely use gas (5% of energy grids). I think a £400 generator is a smart investment in this circumstance.

Watching the oil/gas tankers queue up in the Firth of Forth seems a bit odd, where are we sending it

[Lobby]

Do you not expect demand to plummet, or at least significantly reduce? It’s time for me to play the “I grew up in a draughty old farmhouse, stone floor, coal fire, ice on the inside of the bedroom windows” card. Did me no harm, well apart from the chilblains.

I'm with you - I grew up wearing four layers and having two duvets in winter. Suffered from chillblains (I have Reynauds as well) and once a chillblain became an abscess - couldn't play rugby for a month whilst it healed meaning I missed a regional trial.

Yes, I expect demand to plummet. But Norway are talking about limiting exports, we have virtually no energy storage and our incoming PM seems hell-bent on pissing off Europe. Finland are preparing for rolling blackouts and they barely use gas (5% of energy grids). I think a £400 generator is a smart investment in this circumstance.

Watching the oil/gas tankers queue up in the Firth of Forth seems a bit odd, where are we sending it

The highest bidder?

[Dogbert]

Do you not expect demand to plummet, or at least significantly reduce? It’s time for me to play the “I grew up in a draughty old farmhouse, stone floor, coal fire, ice on the inside of the bedroom windows” card. Did me no harm, well apart from the chilblains.

I'm with you - I grew up wearing four layers and having two duvets in winter. Suffered from chillblains (I have Reynauds as well) and once a chillblain became an abscess - couldn't play rugby for a month whilst it healed meaning I missed a regional trial.

Yes, I expect demand to plummet. But Norway are talking about limiting exports, we have virtually no energy storage and our incoming PM seems hell-bent on pissing off Europe. Finland are preparing for rolling blackouts and they barely use gas (5% of energy grids). I think a £400 generator is a smart investment in this circumstance.

Watching the oil/gas tankers queue up in the Firth of Forth seems a bit odd, where are we sending it

A lot of what you are seeing could be tankers delivering to Grangemouth , rather than exporting

For the Grangemouth's Kinneil Gas (KG) cracker, Ineos invested around $2bn in the project to import US ethane to Grangemouth and Norway's Rafnes This includes a 15-year supply contract made with a range of US shale gas producers and a fleet of eight new 27,500m³ capacity ships along a jetty system at Grangemouth capable of accommodating these vessels and a 60,000m³ (30,000t) storage tank — the largest in Europe.

Grangemouth also will be taking deliveries from the Phillips 66 refinery from Immingham

[Slick]

I'm with you - I grew up wearing four layers and having two duvets in winter. Suffered from chillblains (I have Reynauds as well) and once a chillblain became an abscess - couldn't play rugby for a month whilst it healed meaning I missed a regional trial.

Yes, I expect demand to plummet. But Norway are talking about limiting exports, we have virtually no energy storage and our incoming PM seems hell-bent on pissing off Europe. Finland are preparing for rolling blackouts and they barely use gas (5% of energy grids). I think a £400 generator is a smart investment in this circumstance.

Watching the oil/gas tankers queue up in the Firth of Forth seems a bit odd, where are we sending it

A lot of what you are seeing could be tankers delivering to Grangemouth , rather than exporting

For the Grangemouth's Kinneil Gas (KG) cracker, Ineos invested around $2bn in the project to import US ethane to Grangemouth and Norway's Rafnes This includes a 15-year supply contract made with a range of US shale gas producers and a fleet of eight new 27,500m³ capacity ships along a jetty system at Grangemouth capable of accommodating these vessels and a 60,000m³ (30,000t) storage tank — the largest in Europe.

Grangemouth also will be taking deliveries from the Phillips 66 refinery from Immingham

Ahh! Thanks, could well be

[Raggs]

That unit rate is insane!

I got an email from British Gas this week telling me not to worry, as I’m on a fixed rate until November 2023, so no price increases for me this winter. God knows how much I’ll have to pay next when my contract comes up for renewal next year.

I’m in the same sort of position, rates fixed until May/July next year.

Got my mum locked in at a then slightly expensive, but already now good, price until mar 2024. Might be popping to hers quite often in the coming years if prices aren't fixed.

[Dogbert]

https://www.marinetraffic.com/en/ais/ho ... 6.0/zoom:6

The shipping version of 'Flightradar' interesting way to see what's being moved , when and where on the high seas

[C T]

I'm looking for someone to educate me, to offset the lazyiess of not educating myself. That's what forums are for right?

Why has the wholesale price gone up? Well, actually I guess the question is more why are we so accepting of the supply/demand reason?

So I've made up an example. I sell thingymcbobs for £10, this gives me a decent lifestyle covering my needs. Something happens in supply/demand of thingymcbobs so I can now sell them for £20.

I can double my profits, as a general rule of thumb that would be seen as a good thing. I now earn more than I need, but still. I don't have to, but I can raise the price to £20. Perhaps you could say it's sensible for me to, to safeguard against a future change in thingymcbobs which might mean I can only sell them for £5.

My accepted lack of knowledge thinking is that the wholesalers don't have to raise the price per barrel, but they can and we all accept it because of supply and demand. It isn't costing them more to produce the barrel, or is it? Their skyrocketing profits seem to indicate it isn't, or at least not to the extent that the price has gone up by.

Couldn't more pressure be put on wholesalers to keep their profits sensible and the price per barrel down?

In a genuine free market, there'd be no barrier to someone else selling a thingymcbob as well, preventing you from raising prices too much. If you then arranged with them to fix the price so you could both profit, and sell at a higher price, that'd be a cartel and you'd be open to being undercut by someone else. But similarly if there's oversupply, people can leave that market and not sell them. That, in very simple terms is market efficiency - supply and demand work against each other to find the most efficient price point.

But there's a fundamental problem with that kind of model in relation to something like energy (or water). the most efficient point leaves some people unable to buy your thingymcbob as they'd need it priced lower to an extent which would mean you'd make less overall profit. But we all need electricity so no one can be excluded from the market. So heavy regulation is needed to make a market in essential services viable. Unfortunately our regulation is far too light, with far too much emphasis on a free market (and that's across Europe, not the UK). There's no price control, so nothing to stop it being unaffordable when a marginal situation (in economic terms) is reached.

Thank you for your response. Distinct lack of "Idiot!" or "Do your research!" that I've come to expect from the internet.

[Mahoney]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

[GogLais]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

I guess you’d have to do it by price. Sliding scale cost/kWh. Trouble is you’d have to relate it to size of property and number of occupants.

[Lobby]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

I guess you’d have to do it by price. Sliding scale cost/kWh. Trouble is you’d have to relate it to size of property and number of occupants.

We may get a form of rationing by way of powercuts in the Autumn.

I see the German Government has announced a series of measures to reduce consumption

"Starting from September, public buildings apart from institutions like hospitals, are to be heated to a maximum of 19C and the heating may be turned off completely in entrances, corridors and foyers.

Public monuments and buildings will also not be lit up for aesthetic reasons and businesses could be banned from keeping their shops illuminated at night.

Private swimming pool heating could also be banned. And the country will give coal and oil cargo priority over passenger travel on railways meaning passengers will have to wait.

Germany also plans to run publicity campaigns to tell locals how they can cut down on their own consumption."

No chance the UK Government will take sensible and responsible measures like this, but I'm sure the reduction in NI promised by Dizzy Lizzy will sort everything out.

[MungoMan]

I'm looking for someone to educate me, to offset the lazyiess of not educating myself. That's what forums are for right?

Why has the wholesale price gone up? Well, actually I guess the question is more why are we so accepting of the supply/demand reason?

So I've made up an example. I sell thingymcbobs for £10, this gives me a decent lifestyle covering my needs. Something happens in supply/demand of thingymcbobs so I can now sell them for £20.

I can double my profits, as a general rule of thumb that would be seen as a good thing. I now earn more than I need, but still. I don't have to, but I can raise the price to £20. Perhaps you could say it's sensible for me to, to safeguard against a future change in thingymcbobs which might mean I can only sell them for £5.

My accepted lack of knowledge thinking is that the wholesalers don't have to raise the price per barrel, but they can and we all accept it because of supply and demand. It isn't costing them more to produce the barrel, or is it? Their skyrocketing profits seem to indicate it isn't, or at least not to the extent that the price has gone up by.

Couldn't more pressure be put on wholesalers to keep their profits sensible and the price per barrel down?

In a genuine free market, there'd be no barrier to someone else selling a thingymcbob as well, preventing you from raising prices too much. If you then arranged with them to fix the price so you could both profit, and sell at a higher price, that'd be a cartel and you'd be open to being undercut by someone else. But similarly if there's oversupply, people can leave that market and not sell them. That, in very simple terms is market efficiency - supply and demand work against each other to find the most efficient price point.

But there's a fundamental problem with that kind of model in relation to something like energy (or water). the most efficient point leaves some people unable to buy your thingymcbob as they'd need it priced lower to an extent which would mean you'd make less overall profit. But we all need electricity so no one can be excluded from the market. So heavy regulation is needed to make a market in essential services viable. Unfortunately our regulation is far too light, with far too much emphasis on a free market (and that's across Europe, not the UK). There's no price control, so nothing to stop it being unaffordable when a marginal situation (in economic terms) is reached.

Thank you for your response. Distinct lack of "Idiot!" or "Do your research!" that I've come to expect from the internet.

In economic terms there are some electricity markets where price is always a 'marginal situation'. Australia's misleadingly named* National Electricity Market (NEM) is one.

The main game for NEM physical energy supply is by way of a blind auction. There are no capacity payments and no regulated day-ahead market. For every trading interval in the NEM, every generator gets paid the marginal price: i.e. the market clearing price, the price of the last generator bid needed to meet the last MW of demand. The market price cap, currently AUD15,100, I believe is higher than most euro equivalents.

Even so, for the first decade or so of the NEM's operation the prices were so low investors in generation would have been regretting their choices.

Electricity supply is as complicated economically as it is in engineering terms.

*Western Australia and the Northern Territory aren't connected to the NEM grid and aren't subject to NEM pricing; ditto biggish chunks of Queensland and South Australia.

[Glaston]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

[Hal Jordan]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

Burn furniture, old books and the dead?

[tc27]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

Just hedging (albeit at astronomical cost) surely?

Currently the UK is exporting power to France fwiw.

[Dinsdale Piranha]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

Just hedging (albeit at astronomical cost) surely?

Currently the UK is exporting power to France fwiw.

France has a lot of repair work to do on its Nuclear plants. I expect UK will be exporting electricity to France for a while. Normally UK imports as it's cheaper. Currently not the case.

[TB63]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

Burn furniture, old books and the dead?

The Germans tried that in the 1940s..

Didn't work out too well...

[dpedin]

I'm with you - I grew up wearing four layers and having two duvets in winter. Suffered from chillblains (I have Reynauds as well) and once a chillblain became an abscess - couldn't play rugby for a month whilst it healed meaning I missed a regional trial.

Yes, I expect demand to plummet. But Norway are talking about limiting exports, we have virtually no energy storage and our incoming PM seems hell-bent on pissing off Europe. Finland are preparing for rolling blackouts and they barely use gas (5% of energy grids). I think a £400 generator is a smart investment in this circumstance.

Cold is fine unless you're a pensioner, disabled and rely on power for your care, a young baby, live in north of Scotland where temps are well below UK average, etc. Apart from families going cold and folk dying the big problem is going to be companies going bust as costs rise, domestic demand for goods and services plummet and discretionary spending falls off a cliff. There is already a significant slowdown and this will accelerate as folk cant pay power bills and stop spending as a response. We are heading for a huge recession and dangerous times indeed.

You're speaking to someone who grew up in Banchory and Monifieth. I am aware of winters in the north of Scotland.

I agree times are going to be extremely hard for vulnerable people. Which is why not vulnerable people have to step up and put on a jumpers.

I also agree this is going to be far worse economically than the GFC or covid.

Just caught up with this! I too grew up in Monifieth, in the early 70's. Compared to Banchory it must be the equivalent of the Costa del Sol? Cant remember too many fierce winters in Monifieth.

[Paddington Bear]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

Yes, and we should be starting now so people get used to it at times when energy use is less important. Everything feels a bit February 2020 and no one in government gives a shit.

[Torquemada 1420]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

Can of worms. Health? Insurance? Travel?

Welcome to capitalism.

[tabascoboy]

[petej]

Mention of the French forward buying 1 billion euros of German Electricity last week for 2023.

Hope UK has forward plans because nothing is coming from France this winter

Just hedging (albeit at astronomical cost) surely?

Currently the UK is exporting power to France fwiw.

France has a lot of repair work to do on its Nuclear plants. I expect UK will be exporting electricity to France for a while. Normally UK imports as it's cheaper. Currently not the case.

Summer is outage season. Wife has been relieved she doesn't do that anymore as she always ended up with a fair bit of confined space work (due to being 5'2") when doing plant integrity inspections which would have been grim in the heatwave.

[_Os_]

Is there a case for rationing? It sticks in the craw a bit that those with loads of disposable income may be able to carry on much as before whilst others are in huge trouble because there's a genuine scarcity of something so fundamental. It's not like there's an infinite supply that happens to be expensive, every KW I use us a KW someone else can't have.

Can of worms. Health? Insurance? Travel?

Welcome to capitalism.

Is this in a scenario where available energy supply is less than demand?

Rationing will not work unless it's severe enough to impact peak-load. Otherwise everyone cuts back on what they can, but peak-load remains much the same, people will still want to eat at the same time of day. The market driven approach to rationing power usage during peak hours, would be making the normal use of power during those hours unaffordable to most people. Essentially this method has been picked, but with most providers only having a flat rate (and no cheaper off peak rate).

If this method doesn't work, and there's still not enough power available to meet demand after the peak-load has been flattened. South African style load shedding where loops that have no critical infrastructure on them are turned off on a schedule and left completely without power for a certain amount of time, then becomes the choice.

[I like neeps]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

[robmatic]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

Good grief.

As well as being dogmatic, he just doesn't have the intellectual capacity to deal with this kind of issue.

[Hal Jordan]

Climate change denier/slow walker/costs too much cunt as well.

Also, proven liar if he takes the post, given his proclaimed intention never to work under anyone but Johnson.

[Hal Jordan]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

The more pressing issue is how many won't survive as a result of her tenure.

[inactionman]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

Good Christ.

He'll just try to offshore everyone.

[Torquemada 1420]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

Good Christ.

He'll just try to offshore everyone.

No chance he could be offshored back to HK I suppose?

It always surprises me that he is a fair bit younger than I and yet looks worse than Jake.

[inactionman]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

Good Christ.

He'll just try to offshore everyone.

No chance he could be offshored back to HK I suppose?

It always surprises me that he is a fair bit younger than I and yet looks worse than Jake.

Ideally, from a cannon.

[Hal Jordan]

Jacob Rees Mogg to be put in charge of energy. A rabid small state libertarian in charge of an economic and social challenge up there with covid.

I find it hard to believe Truss survives the year before a vote of no confidence.

Good Christ.

He'll just try to offshore everyone.

No chance he could be offshored back to HK I suppose?

It always surprises me that he is a fair bit younger than I and yet looks worse than Jake.

Using all that Force lightning to blast orphans and the poor has aged him.

[I like neeps]

The next govt are looking to cut business rates to ease pressures on business (although still not sure how some are covering the uncapped energy costs) and renewables pricing will no longer be tied to gas which both make sense.

[Blackmac]

Just done the calculations and our new bill on the latest cap will be about £5400 based on the last two years.
We have just fitted a new energy efficient boiler and topped up the insulation and we have also kept the lazy spa in the garage all summer, so hopefully our usage will have dropped a bit. We are reasonably comfortable but even I don't see how we can cope if the price cap gets anywhere near the £6800 some are predicting.

[Torquemada 1420]

Just done the calculations and our new bill on the latest cap will be about £5400 based on the last two years.
We have just fitted a new energy efficient boiler and topped up the insulation and we have also kept the lazy spa in the garage all summer, so hopefully our usage will have dropped a bit. We are reasonably comfortable but even I don't see how we can cope if the price cap gets anywhere near the £6800 some are predicting.

Move to Cornwall. That's will be sub-Saharan climate in the next decade!

[I like neeps]

Liz Truss ruled out a further windfall tax on O&G producers. Government are predicted 170bn excess profits they generate. Massive decline in living standards... It's hard to see how this holds.

[Tichtheid]

I was only half listening (as was only half awake), but earlier there was an item on the R4 Today programme that had an interview with a restauranteur in Calais and one in Dover. The French geezer is seeing a 4% increase in his energy bills and his English counterpart is contemplating his costs going from £15K to around £100K.

I've seen a figure flying around that we in the UK get <5% of our gas from Russia.

edit, Google tells me the UK gets 3% of its gas from Russia

[Raggs]

Doesn't matter how much we get from Russia. Supply overall has gone down, demand has stayed constant, so prices rise. It's a worldwide thing not just a UK one. Our suppliers however do seem to have decided to just cash grab in an extraordinary way.

[Tichtheid]

Doesn't matter how much we get from Russia. Supply overall has gone down, demand has stayed constant, so prices rise. It's a worldwide thing not just a UK one. Our suppliers however do seem to have decided to just cash grab in an extraordinary way.

Correct me if I'm wrong, but the UK gets half of its supply from its own North Sea waters, another third comes from Norway and the rest in the form of LNG from Qatar, our 3% from Russia comes in this form and this LNG has seen the most volatile prices - that's why our balance of trade with the EU is actually good at the moment, it's shored up by the ludicrous price of LNG that we import from Qatar and export on to Europe.

We've been subsidising extraction of oil and gas for a long time now, iirc we receive some of the lowest tax returns in the world from oil and gas companies.

[I like neeps]

I was only half listening (as was only half awake), but earlier there was an item on the R4 Today programme that had an interview with a restauranteur in Calais and one in Dover. The French geezer is seeing a 4% increase in his energy bills and his English counterpart is contemplating his costs going from £15K to around £100K.

I've seen a figure flying around that we in the UK get <5% of our gas from Russia.

edit, Google tells me the UK gets 3% of its gas from Russia

Raggs is correct, gas is a global market and the world's second largest supplier being removed from the market ends up in everyone's prices going up. Doesn't matter we get most of our energy from the north sea as the producers don't give us better contracts because it's our sea they're drilling.

France are paying for the increase through the governments magic money tree. Macron is signalling in December they'll have to change that. This is a Europe wide issue that nobody is protected from and all economies will be very damaged.