What should the unit prices be to cover wholesale prices?

merchcon55

QrizB said:

Compared to my original wet-finger numbers of 36p and 8.5p, even the worst case is better now I've done the maths.

But they're still pretty high numbers, especially for gas (in relative terms, the worst-case electricity price is up 42% but gas is up 88%; even the best case is 33% and 63%).

First, great analysis. Now the bad news - don't we need to add to these projected increases an amount Utility Suppliers need to recoup for providing us all with Gas and Electricity at a loss during the current cap period, which as we all know, is far too low?

Also the amounts that SoLR will demand for taking on board (at least initially) loss making customers??

wild666

A 40 Watt bulb uses 1 kWh every 25 hours, about 351 kWh per year if left on 24/7. How much does an LED bulb use in the same period? I had smart bulbs for a while they used 4 watts per hour in standby and 11 Watts per hour when turned on so the bulb would use 96.7 kWh per year, a large saving of over 254 kWh per bulb left on 24/7.

QrizB

wild666 said:

A 40 Watt bulb uses 1 kWh every 25 hours, about 351 kWh per year if left on 24/7. How much does an LED bulb use in the same period?

Way off-topic for this thread but I answered your question here.

Here's a typical Philips Hue lamp (link). The max standby power is 0.1W, so 2.4Wh per day or 0.88kWh per year.
When illuminated, it uses 6W and is equivalent to a 40W incandescent lamp.
If you use it for 1000 hours per year (and have it in standby for the other 7760 hours) it will use a grand total of 6.78kWh, compared to the 40kWh that the incandescent lamp would have used.

wittynamegoeshere

jimjames said:

wittynamegoeshere said:

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".

I worked out that the LED bulbs were paid for in a few months in the most used rooms in the house. I'm really curious how that listing can claim an 80% energy saving. Is that against a 300W bulb? Or are they really LEDs in disguise?

I noticed that when I linked it.  Either it's just a mistake or they're deliberately lying, possibly to comply with the regulations that banned the sale of all filament bulbs years ago.  Either they're 60W, they're LED and they're about as bright as a stadium floodlight, or they're actually much lower powered.  Perhaps not a good example of a listing for a filament bulb, only confused people could have bought these.

But there are lots of real 60W filament bulbs on ebay.  Bizarrely you can legally sell them as long as they are described as "Rough Service" bulbs.  Just a stupid legal loophole really.  Most ebay sellers don't seem to know or care though, and it looks like it's bascially the wild west of fuddy-duddies buying their under-the-counter olden days bulbs.  Then they'll write a ranty letter to The Daily Wail about how high their leccy bill is.

wittynamegoeshere

QrizB said:

• Best case: Decenber and January are as cheap as August was. The average wholesale price for electricity will be around 14p, up 7p, and gas will be around 4.8p, up 2.6p. Ofgem capped rates will be around 28p and 6.7p respectively.
• Middle case: Decenber and January will be like the cheaper of Sept or Oct. The average wholesale price for electricity will be around 15.5p, up 8.5p, and gas will be around 5.3p, up 3.1p. Ofgem capped rates will be around 29.5p and 7.2p respectively.
• Worst case: December and January will be like the more expensive of Sept or Oct. The average wholesale price for electricity will be around 16p, up 9p, and gas will be around 5.8p, up 3.6p. Ofgem capped rates will be around 30p and 7.7p respectively.

I remain hopeful that the capped price will become as irrelevant to us smart consumers as it was previously, and it will return to being the worst-case granny price it was always intended to be.  The capped price calculations always look backwards, but the fixed prices offered look forwards, at predicted trends.  If competition resumes in some meaningful way then hopefully we'll all be paying much less than the legal maximum so won't have to care what it is, other than checking that our relatives aren't still paying it, then being told it's none of our business and they've already been told it's the best price by their trusted supplier (sigh).

Sea_Shell

QrizB said:

QrizB said:

Spies said:

Theorising that the cap is going to go up in April, how much should we be paying per unit of gas and electricity in order for the suppliers to not go broke?

According to Ofgem's press release on the current cap, it was based on a wholesale gas price of about 64p per therm (a therm is about 29kWh, so 2.2p per kWh) and a wholesale electricity price of around £70 per MWh (7p per kWh), based on prices from Febuary to July 2021.

The new cap will be based on prices from August 2021 to January 2022; roughly half that period is now behind us, and so we've a pretty good idea which way things will change. The only thing that needs guessing is exactly how much prices will rise by.

Obviously we're not yet half-way through November but, for completeness, this month electricity is averaging 17.5p/16.4p/15.8p and gas is averaging 5.85p, respectively.

Here's some speculation for you (I'm fully expecting to be proved wrong as the situation develops).

• Best case: Decenber and January are as cheap as August was. The average wholesale price for electricity will be around 14p, up 7p, and gas will be around 4.8p, up 2.6p. Ofgem capped rates will be around 28p and 6.7p respectively.
• Middle case: Decenber and January will be like the cheaper of Sept or Oct. The average wholesale price for electricity will be around 15.5p, up 8.5p, and gas will be around 5.3p, up 3.1p. Ofgem capped rates will be around 29.5p and 7.2p respectively.
• Worst case: December and January will be like the more expensive of Sept or Oct. The average wholesale price for electricity will be around 16p, up 9p, and gas will be around 5.8p, up 3.6p. Ofgem capped rates will be around 30p and 7.7p respectively.

Compared to my original wet-finger numbers of 36p and 8.5p, even the worst case is better now I've done the maths.

But they're still pretty high numbers, especially for gas (in relative terms, the worst-case electricity price is up 42% but gas is up 88%; even the best case is 33% and 63%).

What about an even worse case, worst case, in that prices for December and January turn out to be even MORE expensive than Sept or October?!?

Also what about any OFGEM levies to claw back losses?    What will happen to the standing charges?

QrizB

Sea_Shell said:

QrizB said:

Obviously we're not yet half-way through November but, for completeness, this month electricity is averaging 17.5p/16.4p/15.8p and gas is averaging 5.85p, respectively.

Here's some speculation for you (I'm fully expecting to be proved wrong as the situation develops).

• Best case: Decenber and January are as cheap as August was. The average wholesale price for electricity will be around 14p, up 7p, and gas will be around 4.8p, up 2.6p. Ofgem capped rates will be around 28p and 6.7p respectively.
• Middle case: Decenber and January will be like the cheaper of Sept or Oct. The average wholesale price for electricity will be around 15.5p, up 8.5p, and gas will be around 5.3p, up 3.1p. Ofgem capped rates will be around 29.5p and 7.2p respectively.
• Worst case: December and January will be like the more expensive of Sept or Oct. The average wholesale price for electricity will be around 16p, up 9p, and gas will be around 5.8p, up 3.6p. Ofgem capped rates will be around 30p and 7.7p respectively.

Compared to my original wet-finger numbers of 36p and 8.5p, even the worst case is better now I've done the maths.

But they're still pretty high numbers, especially for gas (in relative terms, the worst-case electricity price is up 42% but gas is up 88%; even the best case is 33% and 63%).

What about an even worse case, worst case, in that prices for December and January turn out to be even MORE expensive than Sept or October?!?
Also what about any OFGEM levies to claw back losses?    What will happen to the standing charges?

UK gas futures at The ICE are somewhat down compared to the earlier peaks. There are only two months to go to the end of the Ofgem period so there's a relatively small chance of them shooting up to being higher than October (it would take something disruptive like a gas embargo on/by Russia or a catastrophic pipeline incident). And electricity prices are related to gas prices.

Adding an Ofgem levy of ~£50/household to cover SoLR costs would hit low users hardest, but are a relatively minor effect on average users.

Compared to the current Ofgem average of £1277/yr, potential April averages (assuming £230 pa total SC) are:

• My best case: £1850
  
• My middle case: £1950
  
• My worst case: £2020
  

Sea_Shell

QrizB said:

Sea_Shell said:

QrizB said:

Obviously we're not yet half-way through November but, for completeness, this month electricity is averaging 17.5p/16.4p/15.8p and gas is averaging 5.85p, respectively.

Here's some speculation for you (I'm fully expecting to be proved wrong as the situation develops).

• Best case: Decenber and January are as cheap as August was. The average wholesale price for electricity will be around 14p, up 7p, and gas will be around 4.8p, up 2.6p. Ofgem capped rates will be around 28p and 6.7p respectively.
• Middle case: Decenber and January will be like the cheaper of Sept or Oct. The average wholesale price for electricity will be around 15.5p, up 8.5p, and gas will be around 5.3p, up 3.1p. Ofgem capped rates will be around 29.5p and 7.2p respectively.
• Worst case: December and January will be like the more expensive of Sept or Oct. The average wholesale price for electricity will be around 16p, up 9p, and gas will be around 5.8p, up 3.6p. Ofgem capped rates will be around 30p and 7.7p respectively.

Compared to my original wet-finger numbers of 36p and 8.5p, even the worst case is better now I've done the maths.

But they're still pretty high numbers, especially for gas (in relative terms, the worst-case electricity price is up 42% but gas is up 88%; even the best case is 33% and 63%).

What about an even worse case, worst case, in that prices for December and January turn out to be even MORE expensive than Sept or October?!?
Also what about any OFGEM levies to claw back losses?    What will happen to the standing charges?

UK gas futures at The ICE are somewhat down compared to the earlier peaks. There are only two months to go to the end of the Ofgem period so there's a relatively small chance of them shooting up to being higher than October (it would take something disruptive like a gas embargo on/by Russia or a catastrophic pipeline incident). And electricity prices are related to gas prices.

Adding an Ofgem levy of ~£50/household to cover SoLR costs would hit low users hardest, but are a relatively minor effect on average users.

Compared to the current Ofgem average of £1277/yr, potential April averages (assuming £230 pa total SC) are:

• My best case: £1850
  
• My middle case: £1950
  
• My worst case: £2020
  

So just to put that into monthlies (for those that prefer), an Ofgem "average" user would go from £106 pm, to...

best - £154 pm - up £48 pm
middle - £162.50 pm - up £56.50 pm
worst - £168.33 pm - up £62.33 pm

That's going to put a big squeeze on a lot of household budgets, many who won't have an extra £48 "spare".   It'll be even more of a jolt/surprise/shock to those who are still on a cheap fix with a current supplier, who aren't due to come off it until March/April 22.

I'm sure many people are still unaware of the "nuts and bolts" of the current situation.

It will be really interesting to revisit this thread, when the April cap is announced to see how close you were!! 

QrizB

Sea_Shell said:

It will be really interesting to revisit this thread, when the April cap is announced to see how close you were!! 

I'm hoping to update this at the end of each month, and you're right it will be fun to see how close I get

Sea_Shell

Gas prices seem to have been pushed up again this week.😲

Putin's pipeline not signed off on by Germany, apparently.