How to get Ofgem to set energy standing charges to zero?

MattMattMattUK

wrf12345 said:

Just to add, people with new PV installations are being charged for their use of the grid because they are lucky to get 5p kwh, 16p disappearing into ether - be a huge boost for the country if new installations were offered 18p kwh, the new smart meters able to read and credit such exported electricity so consumers would have credit during the summer to use for electric heating in the winter. Some countries let the smart meter run backwards so they are fully credited, BTW.

That was a government choice, take it up with them. The reality is that it will be a few years before I install solar, but when I do I will be installing Powerwalls as well to make sure I use most of my self produced energy. Potentially, depending on the home I can buy and how well I do financially over the next five years I may even be able to get close to being independent of the grid, in which case I will reach your dream of no standing charges, as provided the solar and battery supply is large enough I would not need a grid connection, although of course I would keep one as a backup, as £0.25 per day is irrelevant. 

Grizzlebeard

bagand96 said:

The system isn't perfect, but no system will be.  Abolishing standing charges sounds great, especially for low users, but we will all pay it another way - that money into the industry would have to be recouped.

That's very true. Everything needs paying for. The only question is is it fair for low energy users to be forced to pay more per kWh than high energy users.

I would suggest a basic level of energy is as important to well being as the NHS is. I've yet to hear anybody say "You've not paying much tax or NI so so I'm going to charge you more for your prescription pills."

All Social and Medical authorities suggest a strong link between poverty and health. Expect a big rise in demand on our Health and Social Services if this energy situation is not equitably resolved.

wrf12345

Ocotpus Agile can also go "negative" if there is not enough demand whereas if your are a consumer you never get a "negative" bill. In inverted commas because they do not actually deduct money just rate it at zero. Still, that does get a bit closer to a prospect of generating enough power on the roof to pay the electric bill. I had a free system on a house ten years ago and the Ebico tariff with no standing charges (before the hopeless Ofgem changed the rules and made that impossible), the best quarter I got close to a bill of £10 - happy days! My neighbour bought his system and made enough to pay his electric and council tax, though he paid around £12000 for the privilege. Solar could come back in a big way if there was enough money paid for the exported electricity, panels are up from 300 to 500 watt so 5kW or more possible on the roof.

Currently, selling my house and it has a newish boiler so it would be silly to cap the supply but if the next house has an older boiler, I will be capping the supply and using the saved money to super-insulate the house. Depending what is on offer, solar panels may be an option.

savers_united

Grizzlebeard said:

bagand96 said:

The system isn't perfect, but no system will be.  Abolishing standing charges sounds great, especially for low users, but we will all pay it another way - that money into the industry would have to be recouped.

That's very true. Everything needs paying for. The only question is is it fair for low energy users to be forced to pay more per kWh than high energy users.

I would suggest a basic level of energy is as important to well being as the NHS is. I've yet to hear anybody say "You've not paying much tax or NI so so I'm going to charge you more for your prescription pills."

All Social and Medical authorities suggest a strong link between poverty and health. Expect a big rise in demand on our Health and Social Services if this energy situation is not equitably resolved.

I am not so sure, in general the elderly, those with illness / medical conditions and those who are renting / poor quality housing will being using a larger percentage of energy. They would be hit hardest by not having SC and Instead having higher unit rates. Its those same people who would be contributing most to the networks upkeep. Yes you will have your large properties but those people can afford to heat their homes anyway and if needed could afford to improve its efficiency, someone renting or in their 70s will unlikely see the benefit of spending thousands upgrading their heating systems, new windows etc. Some unfortunately have little choice but to use higher amounts of energy to keep warm. 

QrizB

wrf12345 said:

Ocotpus Agile can also go "negative" if there is not enough demand whereas if your are a consumer you never get a "negative" bill.

Octopus Agile Outgoing (the generation tariff) never goes negative.

Octopus Agile (the import tariff) can go negative and in those cases Octopus will pay you to use electricity. You do get a negative bill for that period.

https://octopus.energy/agile/

Across the UK, whenever more electricity is generated than consumed, energy prices fall – sometimes to the point where prices drop below zero, and suppliers are paid to take energy off the grid.

Agile Octopus introduces Plunge Pricing – a world first that lets you take advantage of these negative price events, and get paid for the electricity you use. You'll receive alerts whenever prices drop below zero, and you can use our Agile API to program your smart devices.

wild666

wrf12345 said:

Currently, setting standing charges to zero would add approx 15 percent to the tariff rates for gas and elect but removing the daily charge of 50p (for gas and electric) would be very Green as it would emphasize the benefits of low energy usage rather than penalize it.

Incidentally, wholesale electric rate is 7p kwh against current cap of 21p so electricity should be coming down not going up.

But how to persuade ofgem - who have the power - to set the standing charge to zero - do they even have the intelligence to see the benefits of it?

I have said for some time the standing charges should be added to the price per kWh. Divide the electric standing charge price by 9, 2.93p, and the gas standing charge by 0.8p. This would add a couple of pence to the price per kWh but benefit low users, but penalise heavy users and make them think of ways to lower their usage of both electric and gas. 
 

MattMattMattUK

wild666 said:

wrf12345 said:

Currently, setting standing charges to zero would add approx 15 percent to the tariff rates for gas and elect but removing the daily charge of 50p (for gas and electric) would be very Green as it would emphasize the benefits of low energy usage rather than penalize it.

Incidentally, wholesale electric rate is 7p kwh against current cap of 21p so electricity should be coming down not going up.

But how to persuade ofgem - who have the power - to set the standing charge to zero - do they even have the intelligence to see the benefits of it?

I have said for some time the standing charges should be added to the price per kWh. Divide the electric standing charge price by 9, 2.93p, and the gas standing charge by 0.8p. This would add a couple of pence to the price per kWh but benefit low users, but penalise heavy users and make them think of ways to lower their usage of both electric and gas. 

It would mostly benefit people with second homes and holiday lets which are not constantly occupied, it would be negative for anyone who lived in a home year round. 

wild666

Merlin139 said:

So by my calculation it would add 2.9p per kWh of Electric and 0.76p per kWh of Gas. 

I would suspect that the people who are struggling the most would be reducing the amount of Electric below the 3100 kWh per year of a Typical user and the 12000 kWh of Gas.

Your idea would help low users of which I am one. 2100 kWh Electric and 8900 kWh of Gas. From the many posts I have seen on these boards the vast majority would be worse off.

When boilers are serviced the person doing the service normally puts the temperatures up to around 65 degrees but will never put them down to what the homeowner sets them at.
That's what happens when my boiler is serviced and I have to lower the temperatures when they have gone. I have my heating temperature set at 54 degrees and hot water at 49 degrees. It takes the heating a bit longer to get to the 18 degrees the heating is set at but it's saving me over £130 per year in gas. My 2016 gas bill was nearly £350 now it's less than £140.

wrf12345

"They would be hit hardest by not having SC and Instead having higher unit rates"

Rates would be higher with no s/c but the average user would still pay the same total amount, Those paying less would save money. Ofgem would have to mandate a single rate rather than the previous two tier nonsense. It would then be simple to compare the various tariffs on offer. QED.

Another problem with the energy industry, they are allowed 2 percent return, therefore they have every incentive to increase the cost of energy because they get more dosh to reward themselves, though currently kneecapped by the Ofgem cap - when the new cap comes in April it will mean they can take out a huge increase in money from the system. Technology, smart meters and the internet, should make a lot of what energy co's do obsolete, someone like Micheal Gove, who seems still to have retained an intelligent mind, should be directed at the problem.

If Ofgem can't get a handle of this it needs to be closed down and things handled directly by the govn.

Grizzlebeard

savers_united said:

Grizzlebeard said:

bagand96 said:

The system isn't perfect, but no system will be.  Abolishing standing charges sounds great, especially for low users, but we will all pay it another way - that money into the industry would have to be recouped.

That's very true. Everything needs paying for. The only question is is it fair for low energy users to be forced to pay more per kWh than high energy users.

I would suggest a basic level of energy is as important to well being as the NHS is. I've yet to hear anybody say "You've not paying much tax or NI so so I'm going to charge you more for your prescription pills."

All Social and Medical authorities suggest a strong link between poverty and health. Expect a big rise in demand on our Health and Social Services if this energy situation is not equitably resolved.

I am not so sure, in general the elderly, those with illness / medical conditions and those who are renting / poor quality housing will being using a larger percentage of energy. They would be hit hardest by not having SC and Instead having higher unit rates. Its those same people who would be contributing most to the networks upkeep. Yes you will have your large properties but those people can afford to heat their homes anyway and if needed could afford to improve its efficiency, someone renting or in their 70s will unlikely see the benefit of spending thousands upgrading their heating systems, new windows etc. Some unfortunately have little choice but to use higher amounts of energy to keep warm. 

I'm absolutely sure they will be using a larger percentage of their income on energy. That's the definition of fuel poverty. I doubt they will be using a larger percentage of energy per person, whatever that means.

Various Government schemes to help upgrade energy efficiency and housing quality have come and gone. The general opinion is they were a colossal waste of tax payer money with no significant benefits.

Yes true, low income households live in the most energy inefficient housing and that just makes their situation even worse. Please don't tell me that the average someone living on £15k to £25k has a lifestyle that consumes more home energy than somebody on a £60k++ income.

BTW, my current standing charges account for +70% of my bill. In 2020 with Ebico Zero it was 0% of my bill. I'm a very low user by choice, for Ecological not financial reasons. I don't consider myself in fuel poverty despite only about 3% of my annual expenditure going on Energy. I am very lucky that a 350% increase (more to come) didn't give me any concerns for myself, but deep worries for millions of others, including a small handful of people I know.