What should the unit prices be to cover wholesale prices?

Thrugelmir

What if Putin isn't bluffing and cuts gas transmission to EU countries unwilling to pay in Roubles? 

MattMattMattUK

Thrugelmir said:

What if Putin isn't bluffing and cuts gas transmission to EU countries unwilling to pay in Roubles? 

Then there will likely be energy rationing across Europe (including in the UK), OPEC members will somewhat increase supply and there will be a global recession. 

Archie_Duke

Thrugelmir said:

What if Putin isn't bluffing and cuts gas transmission to EU countries unwilling to pay in Roubles? 

According to what I’ve heard this morning he’s walking back that threat somewhat.

QrizB

A very brief update from me (it's a sunny Bank holiday weekend and I've got other things to do).

We're half-way through April and so far the averages for this month are:

• April - gas 7.28p/kWh, electricity 20.3p/kWh

Cornwall Insight's press team have got them back in the news with their winter forecast of £2607, a 32% increase. My model is predicting £2511, up 27%.

I guess we'll find out who is closest when we get to August!

QrizB

Another month over and what a roller-coaster it's been for wholesale energy prices! Wholesale gas has been as high as 9.7p/kWh and as low as 2.9p, electricity from 25.9p/kWh to 10.7p/kWh.

I'm contiinuing to use day-ahead electricity prices are from Nordpool and gas prices are from Guy Lipman. Last pricing period I came up with 6.5p/kWh for gas and 17.4p/kWh for electricity; Ofgem used 4.9p/kWh for gas and 16.6p/kWh for electricity when deriving the April cap.

Average prices for the month are thankfully down on March..

• February - gas 6.33p/kWh, electricity 16.2p/kWh
• March - gas 10.34p/kWh, electricity 25.0p/kWh
• April - gas 5.66p/kWh, electricity 17.7p/kWh

This gives us an average wholesale price for the period to date of 7.50p/kWh for gas and 19.8p/kWh for electricity, and would suggest that the retail price of gas will increase by around 1.1p/kWh, to 8.5p/kWh, and electricity by around 2.5p/kWh, to 30.8p/kWh, leading to a headline Ofgem cap of around £2390, an increase of £420 or 21%.

That's somewhat more reasonable than it was looking at the end of March, and quite a lot lower than the fixed-rate tariffs currently being offered, even the ones currently recommended by MSE.

Given that we're halfway through the period, the range of possible outcomes is narrowing. I am therefore suggest the following bounding cases:

• Lower estimate - 7.5p/kWh gas, 29p/kWh elec, £2220 cap, 13% increase.
• Mid estimate - as the text above, 8.5p/kWh for gas, 30.8p/kWh for elec, £2390 cap, 21% increase.
• Uper estimate - 10p/kWh gas, 33.5p/kWh for elec, £2650 cap, 35% increase.

There's still every possibility of a big increase in October but those forecasts of 30%+ seem to be towards the upper end of the range, so long as the war in Ukraine doesn't throw up any more surprises.

(Edited to put my three estimates on the same basis. Previously the lower and upper were calculated in a different, less detailed way and were coming in lower than they should.)

Mstty

Nice work @QrizB

Xbigman

Many thanks for this.

This is a thread that doesn't get many responses but a lot of people, including myself, follow it with interest.


Darren

Sea_Shell

I now follow this thread to see if I should have zigged, when I zagged???😉

Gone for a fix 20% higher than the cap, April to April.

Back of an envelope maths. My fix = £1700.  Current cap would be £1500.

If cap increases by 20% (to £1800 for me),  and my usage is 30% April-Oct and 70% Nov-Mar, that'll be...

£1500 X 30%=£450
£1800 X 70%=£1260
= £1710*

So an increase of more than 20% I win, less, I lose!! 


* Subject to the vaguries of exactly how the new cap will be made up of course 😉


This is the point someone tells me my figures are completely wrong and I've made a hash of it all. 😜

QrizB

Sea_Shell said:

This is the point someone tells me my figures are completely wrong and I've made a hash of it all. 😜

Using your numbers, I get the same result 👍

Although ... if your fix is 20% higher than the current cap, it would be £1800? If it's £1700 it's only 13% higher? Or is the 20% based on the Ofgem average, but the £1700 is for your own annual consumption?

An October increase of 19% would see you break even.

Sea_Shell

QrizB said:

Sea_Shell said:

This is the point someone tells me my figures are completely wrong and I've made a hash of it all. 😜

Using your numbers, I get the same result 👍

Although ... if your fix is 20% higher than the current cap, it would be £1800? If it's £1700 it's only 13% higher? Or is the 20% based on the Ofgem average, but the £1700 is for your own annual consumption?

An October increase of 19% would see you break even.

DOH!!    You see, I got £200 extra in my head and so mistransposed that to 20%.

Yes you're right, it's only 13% higher!!

That'll teach me to post after a 🍺😉