What should the unit prices be to cover wholesale prices?

Sea_Shell

QrizB said:

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   

@QrizB

Are you getting ready for your next prediction update?   Get that pencil sharpened.

Do you think the media are reporting this accurately, stating "only" a 50% rise in the price cap?   Or is that 50% excluding the claims rebate from failed suppliers, being mooted at an additional £100 per household?

It's going to be pushing £2000.   Do you think it will be higher, when announced?

QrizB

Sea_Shell said:

QrizB said:

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   

@QrizB
Are you getting ready for your next prediction update?   Get that pencil sharpened.
Do you think the media are reporting this accurately, stating "only" a 50% rise in the price cap?   Or is that 50% excluding the claims rebate from failed suppliers, being mooted at an additional £100 per household?
It's going to be pushing £2000.   Do you think it will be higher, when announced?

Pencil at the ready

I think the media (and their sources) are a bit behind with their predictions. December has, to date, been the most expensive month of the year by a significant margin. Even if energy was free for the next two days we'd still be looking at a monthly average of almost 9p/kWh for gas and 23p/kWh for electricity, wholesale. The equivalent retail price would be around 11p and 37p.

December is only one month and its influence on the six-month average is reduced accordingly. However an April cap equivalent to 8p gas and 32p electricity retail is definitely possible. If January is as bad as December you can add another 0.5p to gas and 1p to electricity, so 8.5p and 33p.

Predictions of £2000/yr could turn out to be optimistic.

All this, of course, assumes that Ofgem and their political masters don't decide to intervene in some way and change the rules.

merchcon55

@QrizB

Would you be able to give us the monthly wholesale average price for Gas and Electricity for July, August, Sept, Oct and Nov.

As you quite rightly point out, the rules could change - but at least for the time being, if the calculation uses a straight average, then certainly the prices in July and August will cushion the blow of Nov, Dec, and Jan 2022.

Of course they could change rules and use a "weighted average" - July, August, Sept being counted say only 33% and Oct, Nov, Dec being counted 67%.

If I were an energy supplier in that meeting on Monday, I would certainly be arguing that a straight balanced average is irrelevant, as prices from July, August, Sept should have little bearing. 

Let's all hope they will use the existing formula to calculate the price cap, but I fear a change to the rules is coming

QrizB

merchcon55 said:

Would you be able to give us the monthly wholesale average price for Gas and Electricity for July, August, Sept, Oct and Nov.

The numbers I'm using, and details of my source for them, are on page 7 of this thread:

https://forums.moneysavingexpert.com/discussion/comment/78794477/#Comment_78794477

For December to date, the equivalent wholesale numbers are 9.56p/kWh for gas (Guy Lipman) and 23.6p/kWh for electricity (Drax).

Thrugelmir

QrizB said:

merchcon55 said:

Would you be able to give us the monthly wholesale average price for Gas and Electricity for July, August, Sept, Oct and Nov.

The numbers I'm using, and details of my source for them, are on page 7 of this thread:

https://forums.moneysavingexpert.com/discussion/comment/78794477/#Comment_78794477

For December to date, the equivalent wholesale numbers are 9.56p/kWh for gas (Guy Lipman) and 23.6p/kWh for electricity (Drax).

Need the wind to blow and reduce the dependence on other fuel sources to generate electricity. 

wild666

In summer my usage is around 7 units M3 or 79.1 kWh and in winter it can vary from 40 units, 452 kWh, to 70 units, 791 kWh, I only turn the heating on when the family is down, at other times I use a hot water bottle. I once left the heating on and wondered why I wasn't needing a hot water bottle then realised the heating had being on all the time that year I used 120 units, 1,356 kWh in winter. 

QrizB

Happy New Year to everyone who's following this thread!

QrizB said:

It must be time to update this thread. A quick reminder for anyone who doesn't want to wade through my previous posts:

• The October 2021 Ofgem cap was based on average wholesale energy prices from February to July 2021.
  
• The cap reflected gas at 2.2p/kWh (plus 1.9p/kWh for everything else) and electricity at 7p/kWh (plus 14p/kWh for everything else).
• The April 2022 cap is expected to be based on average prices from August 2021 to January 2022.

I'm continuing to use the average monthly day-ahead electricity prices from Drax and the daily gas prices from Guy Lipman. Here is the story so far (updated info in bold):

• August - gas 3.71p/kWh, electricity 10.6p/kWh
  
• September gas 5.19p/kWh, electricity 17.7p/kWh
  
• October gas 6.85p/kWh, electricity 16.4p/kWh
  
• November gas 6.68p/kWh,  electricity 18.4p/kWh
  
• December gas 9.36 p/kWh,  electricity 22.6 p/kWh
• January remains TBC

Based on the past 5 months, the average price of gas is 6.37p/kWh and electricity is 17.1p/kWh. If prices don't fall significantly below this average during January this suggests an April cap of:

• around 8.3p/kWh for gas;
• around 31.1p/kWh for electricity;
• a headline Ofgem cap price for an average dual-fuel consumer of ~£2080pa, compared to the current £1277pa. That's a 63% increase.

Just for my own interest I worked out that if gas and electricity are both zero-priced (ie. free) on the wholesale market through the whole of January, we'd still be looking at 7.2p/kWh for gas and 28p/kWh for electricity and an £1860 headline cap, a 46% rise.

I'll update this again in early February, once we have January's numbers. In mid-February we'll find out how close I am, or not.

PS this all assumes there's no meddling in the background and the calculation scheme is unchanged. Obviously if Ofgem moves the goalposts, all these forecasts will just be a minor historical curiosity.

Verdigris

Top work, QrizB!

The ASHP to be fitted at my new gaff is looking more cost effective against gas (not that there is any), especially as I aim to be growing a good proportion of my own leccy.

Gerry1

QrizB said:

Just for my own interest I worked out that if gas and electricity are both zero-priced (ie. free) on the wholesale market through the whole of January, we'd still be looking at 7.2p/kWh for gas and 28p/kWh for electricity and an £1860 headline cap, a 46% rise.

Let's hope that Mr. Gove rides to the rescue...

Spies

That's still only a 5% saving, if increases are 60% then it's a drop in the ocean.