The price cap isn't much of a cap

DingDongitsKingKong

It's gonna jump by over 50% in April and will alter every 6 months. There are talks it could be adjusted in as little as 3 month periods. This would be fine if the cap was limited to more general inflation, 7% or whatever. 50% increase tho!  I wouldn't call that a price cap any more than I would call the Hubble Constant a limit to the universe.

Are there any sustainable ways of keeping an actual cap? The one we got now is just kicking the can down the road.

OJ32

Allowing fracking for gas for the next 10 years while we build more nuclear power stations would do it. 

GingerTim

Just don't live near a fracking field: https://www.nytimes.com/2019/10/24/business/energy-environment/netherlands-gas-earthquakes.html

MattMattMattUK

DingDongitsKingKong said:

It's gonna jump by over 50% in April and will alter every 6 months. There are talks it could be adjusted in as little as 3 month periods. This would be fine if the cap was limited to more general inflation, 7% or whatever. 50% increase tho!  I wouldn't call that a price cap any more than I would call the Hubble Constant a limit to the universe.

Are there any sustainable ways of keeping an actual cap? The one we got now is just kicking the can down the road.

The cap was always a flawed system, even more so now that wholesale energy rice's have risen so much. The government has forced the energy suppliers to subsidise people for the last six months, which is why many went bust and those that did not have lost billions (by the end of this year, more profit than they made in the three before all this happened). The only way long term would be government subsidy, which means we would pay less on energy to pay more in tax which is a stupid system.

What needs to happen is more north sea gas (extraction from new fields has not happened for 20+ years, but we will need gas for the next twenty years so it makes little sense for it to not be our own), fracking, and then building a lot of nuclear, solar and wind power generation.

Ectophile

The problem is that North Sea gas is running out. We are importing more and more of our gas. Which means we pay World prices that we can't control.

So it's either massive fracking in the UK, or we have a major campaign to stop using gas, much faster than the government's current plans.

MattMattMattUK

Ectophile said:

The problem is that North Sea gas is running out. We are importing more and more of our gas. Which means we pay World prices that we can't control.

So it's either massive fracking in the UK, or we have a major campaign to stop using gas, much faster than the government's current plans.

North Sea gas is a long way from running out, within the UK economic zone there is enough to supply the UK with all its needs for 300-700 years, the issue is we have stopped exploring new fields. We are going to need gas for another twenty years, it makes no sense to stop producing it ourselves and import it, but that is the path the UK government has taken.

[Deleted User]

Fracking is allowed in the US; it hasn’t resulted in widespread earthquakes, and the wholesale price of gas has remained stable. There is a very good article in today’s Daily Telegraph on the pursuit of net zero which has resulted in so many poor Government energy supply and storage decisions.

Ectophile

The fracking in the USA is mostly for oil. They get gas as a byproduct. They have so much of it now that they are sticking it on boats and sending it over here.

molerat

Dolor said:

Fracking is allowed in the US; it hasn’t resulted in widespread earthquakes, and the wholesale price of gas has remained stable. There is a very good article in today’s Daily Telegraph on the pursuit of net zero which has resulted in so many poor Government energy supply and storage decisions.

You mean not putting the cart before the horse and listening to both sides of the argument unlike what we have doing forced by the green lobby.

RogerBareford

DingDongitsKingKong said:

It's gonna jump by over 50% in April and will alter every 6 months. There are talks it could be adjusted in as little as 3 month periods. This would be fine if the cap was limited to more general inflation, 7% or whatever. 50% increase tho!  I wouldn't call that a price cap any more than I would call the Hubble Constant a limit to the universe.

Are there any sustainable ways of keeping an actual cap? The one we got now is just kicking the can down the road.

The intention of the price cap was never to keep energy prices at a stable level and increase with inflation.

The whole idea of the cap is to stop energy companies from having very expensive standard tariffs way beyond the cost of what the energy actually costs. The reason it is increasing so much is because energy prices have increased massively, if there was no cap the standard tariffs would be increasing even higher.

savers_united

People here are just not used to paying much for energy, we have all become reliant on Gas that has served us well from the North Sea, that is now being reduced and so we import, and the same time we found quick fixes with Gas power stations replacing coal rather than looking longer term at Nuclear. So now we are faced with high global prices for Gas that we use large amounts to not only heat but power our homes. We either import less and extract more or become less reliant on Gas
Renewables have their place but without decent amounts of storage your hand to mouth when the sun shines and / or the wind blows.

The way to look at it now is like paying back for years of cheap energy, maybe if it had been 10-20% higher over the past decade it would have smoothed out these increases we are now seeing.