Energy news in general

Xbigman

The reason a windfall tax hasn't been talked about more is because its a dead duck. 

When a consumer fixes the supplier hedges, that is they take out a contract to buy gas in advance at the prevailing price from a wholesaler. The wholesaler then buys the gas at a pre arranged price from the gas producer. Producers pre sell as high a percentage of their expected production as they can. And this is the issue with a windfall tax. Most current UK production is pre sold and there is no great windfall to tax. This also highlights another issue. The amount of gas production in free float in the UK is quite small. When supplies are interrupted for any reason the price can become quite volatile. When you have disruption from multiple sources (as now) the sky really is the limit. 
I oversimplified it but my point is valid.

There is a second issue with a windfall tax. Taxes on Oil and Gas production in the UK are so high marginal fields are already being shut down and investment curtailed. If we really are heading into an energy squeeze we need to encourage production not punish it. More taxes would be a bad idea.
Some years ago I had shares in an O&G company based in Trinidad. I was surprised to learn that Trinidad was considered a far more stable oil production environment than the UK for the simple reason the Trinidad government didn't keep changing the tax rules every few years. This I think puts it in perspective.

Darren 

[Deleted User]

Interesting to see what action other countries are taking

Norway

Norway’s prime minister Jonas Gahr Store has described the rocketing energy prices as an “extraordinary situation” requiring “extraordinary measures”.

He therefore announced an aid package of more than 8 billion kroner – approximately £673 million – to limit the impact on the country’s 5.4m citizens.

From December to March, the government will cover half of households’ electricity payments – with a market price higher than 70 ore per kw hour – through deductions on bills. There will be a consumption limit up to 5000 kw hours, however, and households will have to pay for usage beyond this.

Additionally, students are eligible for 3000 kroner (around £252) in extra loans if they can document their electricity expenses.

There will also be an electricity tax cut worth 2.9bn kroner (approximately £24m).

“It is a powerful response to what we know many people experience as an acute and difficult situation,” the prime minister told Norwegians.

The Netherlands

The Netherlands’s finance minister Wopke Hoekstra pledged to take “necessary action” to held consumers facing huge energy price increases back in October.

The government is now set to compensate households by cutting energy taxes by an average of 400 euros (around £336) per household from January 1.

Dutch ministers also put aside 150 million euros (approximately £126m) to improve home insulation. This cash will be distributed by local government through vouchers for smart energy metres and draught excluders.

Overall the measures announced are set to cost the Netherlands about 3.2bn euros (£2.6bn).

Italy

Italy’s government has confirmed an intervention worth 3.8bn euro (around £3.2bn) as consumers face energy bill increases of up to 50%.

Prime minister Mario Draghi said those rising costs for citizens led his government to decide to “eliminate for the last quarter of the year the system costs for gas for everyone, and for electricity for families and small companies”.

These “system costs” are additional charges on Italian energy bills, which cover overheads like renewable energy incentives and nuclear safety, and can make up around 20% of final bills.

Spain

Spain has already cut taxes on electricity bills to limit costs for consumers – and in December announced this would continue until May.

VAT on energy bills has been reduced from 21% to 10%, while energy minister Teresa Ribera confirmed that electricity tax will remain at just 0.5%.

The 7% electricity generation tax will be suspended until the end of March.

France

In October, French prime minister Jean Castex confirmed that those earning less than 2000 euros (£1680) a month would receive a 100 euro payment to help them cope with rising energy costs.

Some 38m people in the country are expected to benefit from this cash, Castex told journalists at the time.

The prime minister said tax cuts hadn’t worked previously to stem these kinds of rising prices, and preferred to target measures to those most in need.

A gas price cap announced in September would remain until the end of 2022 if needed, he added.

SOURCE: www.thenational.scot/

markin

Norway makes no sense to me, its 93.4% hydro, Are they so complacent that they don't have fixed deals, and the government are allowing it to be sold at EU market price at home?

Shedman

The UK Natural Gas Futures on theice.com for Feb and March 22 are down significantly over last couple of days...Feb 22 futures down to around £171 a therm about 21% down today (compared to £452 on 21 Dec !)

[Deleted User]

Bargain! Although I half suspect that it's because the World has shut down for a fortnight, and we'll get a better picture next week, when things return to some semblance of normality. Prince Andrew has turned his heating down for some reason...

Shedman

Deleted_User said:

Bargain! Although I half suspect that it's because the World has shut down for a fortnight, and we'll get a better picture next week, when things return to some semblance of normality. Prince Andrew has turned his heating down for some reason...

Could also be to do with the US and Qatari tankers that are being diverted here..

spot1034

Shedman said:

Deleted_User said:

Bargain! Although I half suspect that it's because the World has shut down for a fortnight, and we'll get a better picture next week, when things return to some semblance of normality. Prince Andrew has turned his heating down for some reason...

Could also be to do with the US and Qatari tankers that are being diverted here..

It'll be a combination of that and the weather, which is mild and windy so less demand both for heating and electricity generation. The forecast is for colder weather next week but the wind should still be blowing. The past couple of weeks just show how volatile price movements can be. When we get past winter, short term demand will no longer be such a crucial factor.

[Deleted User]

Obviously most of us concentrate on our own particular case(s), but a look at the rest of the threads on the forum, about suppliers other than our own, shows that there are problems with the the SoLR process right across the board. Time and time again the same issues come up, irrespective of who the supplier is, notably

1) Lack of information and engagement. I can't help feeling that this is a deliberate policy in some cases.
2) Long delays in resolution, and getting caught up in the slow wheels of administration. 
3) Disputed readings and bills. Some suppliers are very hard-nosed to say the least.
4) Refused switches. 
5) Smart meters dying; others coming back to life.
6) Many others. 

I sincerely hope that OFGEM takes note of all this in any forthcoming review of the SoLR process.

[Deleted User]

Shedman said:

Could also be to do with the US and Qatari tankers that are being diverted here..

One would certainly hope that the Government has been trying to do things behind the scenes, like that, and developing better storage facilities (rather than apparently dispensing with them in the fairly recent past). 

BeerSavesMoney

If anyone is still on Octopus Agile you’ll be getting paid for energy use tonight/tomorrow morning! It’s been a while since I’ve seen that. 

edit: I’m in the NW