Why the huge increase in electric cost?

Britannia12345

I guess other people have asked this but I can't find a post relating to it. 
Why have energy costs risen so much this year? Our electric has gone up from 12p a unit to 16p which is extortionate!!! I've checked the other suppliers on here and no-one else can match what we're paying with Avro but increasing by a third?!?!!!!! 

[Deleted User]

Britannia12345 said:

I guess other people have asked this but I can't find a post relating to it. 
Why have energy costs risen so much this year? Our electric has gone up from 12p a unit to 16p which is extortionate!!! I've checked the other suppliers on here and no-one else can match what we're paying with Avro but increasing by a third?!?!!!!! 

There are a number of reasons. Wholesale prices have increased as a result of the World coming out of CV19. UK Nuclear reactors are failing to come out of maintenance on time due to their age etc. The price of gas has risen making electricity generation from this source more expensive. 

The wholesale cost of electricity and gas accounts for less than 40p in every £ that we pay. In April, Ofgem agreed to a £105 increase in the price cap: £23 of this was down to consumer debt as a result of CV19. Each time a supplier fails, the cost of protecting consumer balances and taking over the supply is added to our bills. Then there is the growing cost of the UK smart meter programme. I could go on. 

Pundits are already predicting that Ofgem will have to agree to another £100+ increase in the price cap in October.

Neil_Jones

Last year demand fell through the floor from the commercial point of view as everybody had to stop at home, and this pushed prices down.  If you were fortunate enough to get a dirt-cheap deal in the summer of last year where oil prices were so low they were practically paying you to take it, then when those deals expire nothing else at this time will touch them price-wise.

MWT

Britannia12345 said:

I guess other people have asked this but I can't find a post relating to it. 
Why have energy costs risen so much this year? Our electric has gone up from 12p a unit to 16p which is extortionate!!! I've checked the other suppliers on here and no-one else can match what we're paying with Avro but increasing by a third?!?!!!!! 

That 12p rate hasn't been commercially viable for a long time now, but a few of the small suppliers have been keeping the rates artificially low to attract customers.

Net result is that while everyone has seen a rate increase, it has been a lot lower as a percentage for those who were already on a sustainable rate in the first place.

12p was great while you could get it, but right now you have to consider that anything below 16p is a great deal now and for most 17-18p is the new normal with some even higher.

tghe-retford

There are people who will be facing three massive 10-40% accumulated increases on their bills this year. And we're not even at the point where furlough tails off and the reality of keeping people in zombie jobs hits and the shortfall that customers will have to cough up to cover the debts that will be accrued. And that's before any potential recession, shortfalls in energy production, the costs of migrating to green energy and potential world conflicts affecting the price of oil and energy. I'm pretty sure everyone has noticed the rise in filling the car as of late.

I fear that the days of energy being an affordable utility could be coming to an end. Or at the very least, a shock like what western countries saw in the 1970s. As things stand, energy prices will be exceeding that of council tax and fast becoming second only to rent/mortgage as the highest expense for a household.

MidlandsGlory

Britannia12345 said:

I guess other people have asked this but I can't find a post relating to it. 
Why have energy costs risen so much this year? Our electric has gone up from 12p a unit to 16p which is extortionate!!! I've checked the other suppliers on here and no-one else can match what we're paying with Avro but increasing by a third?!?!!!!! 

Exactly the same for me on Avro, big shock as my fix just ended.

I have just switched to PFP's variable tariff on 12.15p but I don't expect it to last, but still, its got to rise a lot before it gets to Avro's 16p so hopefully a few months of worthwhile use and no exit fee.

Britannia12345

I've never looked at a variable tariff before - what's to stop them putting the price up after the first month or so? 

MidlandsGlory

Britannia12345 said:

I've never looked at a variable tariff before - what's to stop them putting the price up after the first month or so? 

Me neither! 
my understanding is they have to give you 30 days notice of a change and there is no exit fee so I presume if they push their luck too much with rises customers will just mass exodus, I will do, its a hassle but I am willing to give it a try.

Ectophile

Britannia12345 said:

I've never looked at a variable tariff before - what's to stop them putting the price up after the first month or so? 

Nothing at all.  It's a variable tarriff.

PennineAcute

Britannia12345 said:

I've never looked at a variable tariff before - what's to stop them putting the price up after the first month or so? 

Exactly what happened with me and Neon Reef.  Good variable tariff and on the day I went live, they gave me notice of a near 30% increase.  Just say I moved.

[Deleted User]

Britannia12345 said:

I've never looked at a variable tariff before - what's to stop them putting the price up after the first month or so? 

Variable tariffs and falling market prices are good bedfellows. In a rising market, not so good. As others have said, the tariff cost can rise even whilst the supplier is taking over your supply.