Future Cap Prediction - Ouch.

[Deleted User]

Cornwall Insights is recognised for the quality of its analytics. If true, this isn’t good news:

https://www.cornwall-insight.com/the-gravity-of-the-default-tariff-cap-and-the-impact-of-the-solr-process/

bristolleedsfan

45% increase in energy cap forecast in April by City economists at Bank of America,

Faisal Islam on Twitter: "NEW 45% increase in energy cap forecast in April by City economists at Bank of America, I make that £574 on top of this months rise to £1277… a staggering amount, on basis of current wholesale prices above. Would take inflation above 5% to decade high, in month of NICs rise… https://t.co/U0ytJsMaxv" / Twitter

Verdigris

[Deleted User] said:

Cornwall Insights is recognised for the quality of its analytics. If true, this isn’t good news:

https://www.cornwall-insight.com/the-gravity-of-the-default-tariff-cap-and-the-impact-of-the-solr-process/

I heard that on the radio, this afternoon. I also heard about DNOs dragging their feet over approving/making alterations for heat pump installations, which could put me in jeopardy of missing the RHI scheme deadline. I though we were suppose to be encouraged to go green and use less, but cleaner, energy.

GingerTim

All too plausible, sadly.

[Deleted User]

It took my DNO three months last year to sign off on a new solar array, and a further 3 months after installation to sign off the compliance testing.

wittynamegoeshere

They must have a really good crystal ball if they think they can forecast it, even to a single £1!

If they predicted the current mess three months ago then I'll believe their predictions for the next three months.

However...

While – less than two weeks ago – Cornwall Insight modelling indicated a default tariff cap level of £1,455 for Summer 2022 and £1,416 for Winter 2022-23, the increase in wholesale prices in the intervening period has pushed our indicative forecast for the two periods to approximately £1,660.

So they were wrong by £200+ less than a fortnight ago but now think they can accurately predict three months into the future.

Utterly pointless, who pays these people and why?

Bendo

wittynamegoeshere said:

They must have a really good crystal ball if they think they can forecast it, even to a single £1!

If they predicted the current mess three months ago then I'll believe their predictions for the next three months.

However...

While – less than two weeks ago – Cornwall Insight modelling indicated a default tariff cap level of £1,455 for Summer 2022 and £1,416 for Winter 2022-23, the increase in wholesale prices in the intervening period has pushed our indicative forecast for the two periods to approximately £1,660.

So they were wrong by £200+ less than a fortnight ago but now think they can accurately predict three months into the future.

Utterly pointless, who pays these people and why?

Have you used your time machine to visit the future  to know that they were wrong by £200+? All they have done is revised their prediction, until it's announced we don't know if they are right or wrong but with the way wholesale costs are trending, I wouldn't bet against it

QrizB

Bendo said:

wittynamegoeshere said:

They must have a really good crystal ball if they think they can forecast it, even to a single £1!

If they predicted the current mess three months ago then I'll believe their predictions for the next three months.

However...

While – less than two weeks ago – Cornwall Insight modelling indicated a default tariff cap level of £1,455 for Summer 2022 and £1,416 for Winter 2022-23, the increase in wholesale prices in the intervening period has pushed our indicative forecast for the two periods to approximately £1,660.

So they were wrong by £200+ less than a fortnight ago but now think they can accurately predict three months into the future.

Utterly pointless, who pays these people and why?

Have you used your time machine to visit the future  to know that they were wrong by £200+? All they have done is revised their prediction, until it's announced we don't know if they are right or wrong but with the way wholesale costs are trending, I wouldn't bet against it

The only thing we know for sure* is that both those numbers are wrong. The price cap in Apr 22 won'ty be either £1455 or £1660.

But I would agree with witty, a model which changes from the former value to the latter over a period of two weeks, with 20 weeks to go until a new cap is announced, can hardly be called a predicition; it's barely better than a guess.

Grumpy_chap

[Deleted User] said:

It took my DNO three months last year to sign off on a new solar array, and a further 3 months after installation to sign off the compliance testing.

Would the current high prices not be an incentive for a DNO to approve a solar array more quickly.  If we believe some of the comments in the news, each kWhr of electricity is being sold at a loss at the cap based upon high wholesale rates.  Even if that is not the case, the typical 5 p / kWhr that new feed in rates operate at could well be lower than the bulk wholesale rate so still attractive to the DNO.  Of course, new solar at this time of year in the UK will only yield small amounts, quite possibly all consumed by the generating property so a 6-month delay for export would not be a major issue.

Streaky_Bacon

Oh good, some "expert predictions".

https://www.newyorker.com/magazine/2005/12/05/everybodys-an-expert

People who are not experts in the psychology of expertise are likely (I predict) to find Tetlock’s results a surprise and a matter for concern. For psychologists, though, nothing could be less surprising. “Expert Political Judgment” is just one of more than a hundred studies that have pitted experts against statistical or actuarial formulas, and in almost all of those studies the people either do no better than the formulas or do worse.

https://www.theguardian.com/money/2017/sep/02/economic-forecasting-flawed-science-data

While accepting the Nobel prize for economics, Friedrich Hayek made an astonishing admission. Not only were economists unsure about their predictions, he noted, but their tendency to present their findings with the certainty of the language of science was misleading and “may have deplorable effects”.

One of the problems with economic forecasting is that a small change in a few variables can make predictions almost impossibly complex.

Prakash Loungani at the IMF analysed the accuracy of economic forecasters and found something remarkable and worrying. “The record of failure to predict recessions is virtually unblemished,” he said.

His analysis revealed that economists had failed to predict 148 of the past 150 recessions.

Quite aside from the multitude of other interacting issues that could impact prices, is what the weather will do between now and April, and exactly what impact that will have on supply and prices. Are we supposed to believe that these experts know exactly what the weather will do between now and April?

Not what the weather is most likely to do, mind you, but exactly what the weather will do, and the impact it will have on prices, and the plethora of other issues that will affect the price.

Guesswork, not completely uneducated guesswork, but guesswork nonetheless.

[Deleted User]

Predictions are great. Until the first time you get it wrong. Everything after that is a guess.