What should the unit prices be to cover wholesale prices?

wakeupalarm

Dolor said:

Don’t forget to factor in the cost of all the supplier failures. Ofgem will add SoLR costs (including failed supplier credit balance protection), plus any green levies owed to all our future bills. The CEO of BG has said this week that this could amount to £200

https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/failed-energy-suppliers-cost-consumers-255m-since-2018-says-citizens-advice/

PS Ofgem is currently consulting on adding the cost of providing power supplies to EV charger sites to all our bills; BG is pressing for a levy so that it can re-open the Rough gas storage facility and Kwasi wants us to pay for his new nuclear power station.

So you have to add to the cap
1) The current wholesale prices at triple the rate of the last cap
2) The £200 cost of failures linked above, 
3) Cost of EV Charger sites added to bills
4) BG re-opening the Rough gas storages site

and also

5) New upfront charges added to bills for new Nuclear plants.
https://www.theguardian.com/business/2021/oct/26/plan-for-new-uk-nuclear-financing-model-moves-upfront-cost-to-energy-bills

6) Green charges being shifted from Electricity to Gas, which will actually increase charges more then the reduction in electric charges.
https://news.sky.com/story/boris-johnson-looking-at-new-green-levies-on-gas-as-prices-reach-new-high-leaked-document-reveals-12423200


So unless you are very wealthy and don't die from covid, expect to either freeze or starve to death in the near future.

wittynamegoeshere

The big consolation is that most of the cold weather should be out of the way by April, so hopefully most of us will be paying for less consumption under whatever new tariff.

It's possible that we may have six months of high charges followed by prices getting more sensible from October onwards.

Also these high wholesale prices were reached pretty quickly.  If they fall they could do so equally dramatically - nobody yet knows whether this is a spike or a step change.  Presumably the companies supplying the gas were doing so profitably before so could continue to function as before if prices drop.  Obviously gas gets more scarce every year so will increase in price, but not at this sort of rate.

I don't think anyone forecast this rise before it happened, so it may be that a drop could be just as possible.

I suspect that the government isn't planning for the current prices to continue as they think it's unlikely to last, in which case there isn't a major problem.

I suspect that many people will be looking at energy efficiency with new eyes next year.  Perhaps this may be the shock that some needed to start taking their wasteful consumption more seriously.  E.g. some are still using filament light bulbs, which is just outright ignorant these days.

spot1034

Prices have fallen a bit this week, but of-course they could rise again next week! However we are well off the highs now and it is being reported that some of the factors which pushed prices up are now working in the opposite direction.

This is a report from yesterday. https://finance.yahoo.com/news/europe-gas-prices-edge-lower-094138632.html

Sea_Shell

"Perhaps this may be the shock that some needed to start taking their wasteful consumption more seriously. E.g. some are still using filament light bulbs, which is just outright ignorant these days."

I'd suggest that "wasteful consumption" should be taken in the round and not focused on one element of usage.

I don't think calling those who still have filament bulbs as "ignorant" helps.

It's more nuanced than that.   How many bulbs?  Time in use?

wittynamegoeshere

When we moved into our house only 2 years ago it had 100W bulbs in every single pendant!

I haven't bothered replacing them with LEDs for the few lights that we hardly ever use.  Obviously intelligence is required, if that's the point you're making.

But many just want "proper" bulbs, like they had in the old days, and won't consider anything else.  There's a booming black market on ebay for them.  One example among many...

https://www.ebay.co.uk/itm/174748254498

2,391 10-packs sold!  I saw one listing saying "Remember when you could see".

Sadly the "low energy" fluorescent bulbs made a lot of people think that everything other than an olden days bulb is terrible, so have created some reluctance to try out modern things again.

A 100W bulb is going to cost around 2p/hour at current capped rates.  It doesn't take that many hours per day to cover the cost of an LED bulb, especially as they have a much longer lifespan.  If these capped rates go up lots then it should be a no-brainer for any bulbs that are used any more than almost never.  Probably not though, people will just moan about big bills.

wild666

QrizB said:
 of maintaining the networks/supplies?    I wonder what a "true cost" standing charge would be for each fuel?

I wondered about that. Then I realised that, for an "average" electricity user on 2900kWh/yr, the energy cost at 36p/kWh is already £1044/yr. Another £30-£50 on the SC to cover eg. the SoLR costs will hardly be noticed.

£30 to £50 for a SC it's way over £50 for the vast majority somewhere around the £96 mark or higher. IMO the SC should be divided by 9 and added to the kWh price of electric and by 11 for gas as that's nearly how much is used by the gas meter increasing by 1 unit. Or better still use how much gas is used in an average day and divide it by that which for 12,000 kWh the average daily usage that would be 0.0008p per kWh summer usage would see users paying a smaller daily charge but in winter a higher daily charge as more gas was used. Over the year with the 26p divided by 32 it would make the gas SC be around £96 for a year.

QrizB

wild666 said:

QrizB said:
 of maintaining the networks/supplies?    I wonder what a "true cost" standing charge would be for each fuel?

I wondered about that. Then I realised that, for an "average" electricity user on 2900kWh/yr, the energy cost at 36p/kWh is already £1044/yr. Another £30-£50 on the SC to cover eg. the SoLR costs will hardly be noticed.

£30 to £50 for a SC it's way over £50 for the vast majority somewhere around the £96 mark or higher.

Maybe try reading that again?

MWT

wild666 said:

IMO the SC should be divided by 9 and added to the kWh price of electric and by 11 for gas as that's nearly how much is used by the gas meter increasing by 1 unit. Or better still use how much gas is used in an average day and divide it by that which for 12,000 kWh the average daily usage that would be 0.0008p per kWh summer usage would see users paying a smaller daily charge but in winter a higher daily charge as more gas was used. Over the year with the 26p divided by 32 it would make the gas SC be around £96 for a year.

The elements that make up the standing charge are not variable with demand so it makes no sense to try and pretend that they are.

It doesn't cost any less to provide a supply or account services to a customer using 1kWh a day than it does to one using 30kWh a day so why should one pay 30x more than the other...?

Sea_Shell

I'm just going to do less ironing!!!😇😇

My iron is 2800w !!!😲😲

wittynamegoeshere

Iron...ing?...  Must find out what this strange word means.