What should the unit prices be to cover wholesale prices?

ispookie666

@QrizB thank you. I lost track of where I had posted that question!

QrizB

The 28th of February already, and where has the time gone? Time to look at the first full month of wholesale energy prices.

A reminder: I'm taking my day-ahead electricity prices from Nordpool, and for gas I'm using Guy Lipman's data. Last pricing period I came up with 6.5p/kWh for gas (Ofgem used 4.9p/kWh) and 17.4p/kWh for electricity (Ofgem used 16.6p/kWh).

So, without more ado, what do I have for February?

• February - gas 6.33p/kWh, electricity 16.2p/kWh

Both values are somewhat higher than the numbers Ofgem used when calculating the April cap, but as previously discussed I can't explain why they came in that low. All I can really do is compare the new numbers to my calculations for the previous period.

On that basis you can see that we're down slightly for both gas (-0.17p/kWh) and electricity (-1.2p/kWh).

Will this last? How should I know, I'm not Mystic Meg*  but it's a good start to the period and makes me think that, so long as we can get through March without any major shocks (I know, a big ask) the remaining energy companies might just about break even.

* Or am I?

markin

Has the Average jumped in the last 5 days? Whats it look like on a shiny Graph?  

Sea_Shell

Anyone have any inkling as to under what circumstances OFGEM would do a "mid-term" cap review?

Would sustained prices in excess of 300-400p/therm be enough to trigger it?

ispookie666

Pure speculation - likely end up with 3 month updates.  The way oil & gas prices are going and if Russia decides to turn the natural gas off 

Ultrasonic

ispookie666 said:

 if Russia decides to turn the natural gas off 

My utterly amateur view is that I can't see that happening personally. Russia increasing prices or Europe deciding not to buy Russian gas seems more likely.

PennineAcute

The current spot price is £0.3511 per kWh according to Nord Pool.  This is higher than the new April 22 rate.  Energy compies were looking forward to April where they could start making a profit on their standard rate tariffs.  If the current spot price carries on like this, we are back to October problems and, maybe, other companies going bust!

victor2

Even bigger companies could go bust - unless Ofgem make an early adjustment to the cap and make Joe Public pay up...

Ultrasonic

victor2 said:

Even bigger companies could go bust - unless Ofgem make an early adjustment to the cap and make Joe Public pay up...

Which if the alternative is the big suppliers going bust, they should.

QrizB

PennineAcute said:

The current spot price is £0.3511 per kWh according to Nord Pool.  This is higher than the new April 22 rate.  Energy compies were looking forward to April where they could start making a profit on their standard rate tariffs.  If the current spot price carries on like this, we are back to October problems and, maybe, other companies going bust!

Spot prices rise and fall. Looking at Drax it seems we're in-between weather systems and wind generation has been falling all day, so we're burning more gas than in recent weeks. The Met Office forecasts high pressure persisting over the weekend so we probably won't get much wind until next week.