Energy price cap explained please

[Deleted User]

molerat said:

DeletedUser said:

molerat said:

DeletedUser said:

Funny how London is the lowest, and the whole of Northern Scotland is the highest...

You must be looking at a different table to the one OFGEM have published.  Yes Scotland is one of the higher cost areas for electricity, especially for multi register, which has historically been down to high transmission costs but is by no means the highest.

I was looking at the table Euro posted in this thread at 12:30?

Sorry, yes, standing charges are highest in N Scotland.  They always have been and that reflects the higher cost of transmitting electricity across Scotland spread across a lower number of customers.  But the overall cost of electricity is not the highest.

Initially yes, more pylons, more transformers, but once the infrastructure is in place, which it probably has been for a long time...

Are electrons not electrons, in London, or on Mars?

I never mentioned the total cost...

Ultrasonic

DeletedUser said:

molerat said:

DeletedUser said:

molerat said:

DeletedUser said:

Funny how London is the lowest, and the whole of Northern Scotland is the highest...

You must be looking at a different table to the one OFGEM have published.  Yes Scotland is one of the higher cost areas for electricity, especially for multi register, which has historically been down to high transmission costs but is by no means the highest.

I was looking at the table Euro posted in this thread at 12:30?

Sorry, yes, standing charges are highest in N Scotland.  They always have been and that reflects the higher cost of transmitting electricity across Scotland spread across a lower number of customers.  But the overall cost of electricity is not the highest.

Initially yes, more pylons, more transformers, but once the infrastructure is in place, which it probably has been for a long time...

Are electrons not electrons, in London, or on Mars?

I never mentioned the total cost...

I'm sure there will be costs associated with maintaing the infrastructure too...

(I live in the south west which is similarly at the wrong end of the league table of price cap costs  .)

hunting_heat

The download link shown in phillw post is a useful starting point. Page 2 of the letter shows the build-up of the target for the cap. But some things to note.
Starting at the bottom, VAT is included. The two totals are the source of the media "noise" that energy bills are rising by 
£139 a year.
At the top of the listing is Ofgem's basis of the pence per kwhr, when you divide the yearly cost by ??? as the numbers shown are for the average gas and electric property at 12,000 gas and 2900 electric. The values shown are what has caused the pain to the suppliers, who have got caught short by the "energy crisis"
Notice that the energy totals make up just 41% of the proportion of the bottom line. Everything else is the cost to get it delivered. 
Suppliers can vary the standing charge and some of the other costs. Note that network costs and operating costs are the same for both cap periods!!. Now for even more complications. I do not have gas [I am one of 4M properties not on mains gas] And I use twice as much electricity as the "average" household.
How the hell Ofgem can check what and how the supplier arrives at the capped rate costs , whatever they are!!! 

matrix11001

Basically the cap means nothing as it's not a set maximum price people pay. Seems deliberately worded to confuse people.They should tell you the price cap and maximum cost for day/night rate (if you have economy 7 or 10) or maximum cost per unit so you can challenge this if the energy company is exceeding this. With just a £ amount the cap is meaningless unless you you know exactly how it relates to standing cost and cost per unit. Sooner they nationalise utilities companies the better so they can't confuse and screw over their their customers the better!

Ultrasonic

matrix11001 said:

Basically the cap means nothing as it's not a set maximum price people pay. Seems deliberately worded to confuse people.They should tell you the price cap and maximum cost for day/night rate (if you have economy 7 or 10) or maximum cost per unit so you can challenge this if the energy company is exceeding this. With just a £ amount the cap is meaningless unless you you know exactly how it relates to standing cost and cost per unit. Sooner they nationalise utilities companies the better so they can't confuse and screw over their their customers the better!

The cap comes from the government via ofgem, so any confusion lies with them rather than the privatised utility companies. 

If part of the reason for the current cap structure is to still allow some variation/completion between providers then nationalisation would remove this. If it comes from politicians believing that defining standing and unit charges would be too complicated for some or even most to understand then it wouldn't.

Coffeekup

matrix11001 said:

Basically the cap means nothing as it's not a set maximum price people pay. Seems deliberately worded to confuse people.

Pretty much... Everytime a "regulator" comes out with a new way of protecting customers it's more overly complicated than ever, within a year or so people are paying more. 

For example I was reading up on appliance energy usage the other day, you know A,A+,A++ and A+++ and all that rubbish... This report was saying we need to find a better system to inform customer's on how much energy  appliances use...Which baffles me why would you need a "new system"?
If "fridge freezer A" uses 400 units of electricity a year and "fridge freezer B" uses 350 units a year, surely a customer can see which one is more energy efficient and also has a better chance of working out it's yearly cost than if that appliance has A or A++.
Better yet the old system is out dated, let's think of a new one....over complicate it, introduce it, watch and sit back as x amount of million people still have no clue !!!!!! they are buying.

Ultrasonic

Coffeekup said:

For example I was reading up on appliance energy usage the other day, you know A,A+,A++ and A+++ and all that rubbish... This report was saying we need to find a better system to inform customer's on how much energy  appliances use...Which baffles me why would you need a "new system"?
If "fridge freezer A" uses 400 units of electricity a year and "fridge freezer B" uses 350 units a year, surely a customer can see which one is more energy efficient and also has a better chance of working out it's yearly cost than if that appliance has A or A++.
Better yet the old system is out dated, let's think of a new one....over complicate it, introduce it, watch and sit back as x amount of million people still have no clue !!!!!! they are buying.

Devils advocate: arguably the idea of a cap based on average usage is actually trying to mirror the freezer example. The actual energy usage per year will vary, depending on usage and ambient temperatures.

Coffeekup

Ultrasonic said:

Coffeekup said:

For example I was reading up on appliance energy usage the other day, you know A,A+,A++ and A+++ and all that rubbish... This report was saying we need to find a better system to inform customer's on how much energy  appliances use...Which baffles me why would you need a "new system"?
If "fridge freezer A" uses 400 units of electricity a year and "fridge freezer B" uses 350 units a year,

Devils advocate: arguably the idea of a cap based on average usage is actually trying to mirror the freezer example. The actual energy usage per year will vary, depending on usage and ambient temperatures.

Ok it was an example (bad one maybe), let's go with TV as we don't have to worry about ambient temperatures. If a TV uses for arguments sake 140w p/hour a customer has a better chance of working out how much it will cost them per day/week/month/year than A, A+ or G rating's where there based on averages..
If the government want people to make better informed decision's about how much energy they use, don't we have to get rid of all this over complicating energy rating rubbish? Journalism doesn't help either as they always talk about the usage on £££ instead of unit's.

I know from 11 years of monthly meter reads I use 80kw per month during summer months. Early spring and late autumn months I'm using 120kw a month (lighting, more tv with a freeview box). In winter 160kw, December shoots up to 200kw (lights on longer, 2 sets of 200 tree led lights).

I don't like the prices going up as much as the next person, on the other hand it may make people look at how and what they use the energy on.
For me I have been watching my energy use for years and trying to keep it to a minimum, unfortunately there is only a couple if ways I can reduce my energy costs.
For example a smaller TV with no freeview box will save me around about £80 a year at current prices, but what's that mean to person A/B or C if I'm the average am I the average?
But a smaller TV and no box would bring my energy use down 370 kWh per year, your more inclined to work it out and judge for yourself if you would go ahead and make that change

Ultrasonic

Coffeekup said:

Ultrasonic said:

Coffeekup said:

For example I was reading up on appliance energy usage the other day, you know A,A+,A++ and A+++ and all that rubbish... This report was saying we need to find a better system to inform customer's on how much energy  appliances use...Which baffles me why would you need a "new system"?
If "fridge freezer A" uses 400 units of electricity a year and "fridge freezer B" uses 350 units a year,

Devils advocate: arguably the idea of a cap based on average usage is actually trying to mirror the freezer example. The actual energy usage per year will vary, depending on usage and ambient temperatures.

Ok it was an example (bad one maybe), let's go with TV as we don't have to worry about ambient temperatures. If a TV uses for arguments sake 140w p/hour a customer has a better chance of working out how much it will cost them per day/week/month/year than A, A+ or G rating's where there based on averages..

This is somewhat off-topic but for what it's worth the energy used by a TV will depend on the setup of the TV and the content played - most significantly the backlight setting (or OLED equivalent), and HDR typically using more power than SDR.

I believe the A, A+ or whatever categories are useful as well as actual power figures, since they provide an easier 'at a glance' comparison in a store or on a website. The two are directly related, with the power figures determining the lettered category. The latest EU energy labels have also moved from showing typical annual costs to an instataneous power value for comparison (it's weirdly labelled as kWh/1000h, but this is simply W!)

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