Choosing a fix tariff can be an option

primitus

Being somewhat into maths and having data on my past energy consumption, I decided to try and do a simple cost benefit analysis of fixing my energy prices. I have decided to share my simulation here as it might be useful to other forum members.

I am currently with Octopus, I live in the London area and have a fixed deal until 11/03/22. I have been offered a new fixed deal, Loyal Octopus 12M Fixed, starting on 12/03/22, with the following prices:

• Electricity: 27.65p per kWh, 23.30p sc per day;
• Gas: 8.49p per kWh, 26.10p sc per day.

What I did was to compare the above deal with the standard variable tariff. For the SVT, I have used two sets of prices: the current prices valid until the end of March and the new set of prices that we'll have in April as estimated by QrizB.

I have split the year (12/03/22 - 11/03/23) into several periods (according to the imperfect past consumption data that I had at my disposal) and calculated the yearly cost as follows:

By taking the (relatively good) fixed tariff deal I would be paying 78£ (or 5%) more, but I won't be affected by potential increases in the price cap. This result left me somewhat surprised, as I expected the difference to be larger because of:

1. The higher unit cost for gas under the fixed tariff; and
2. The higher cost that I would be paying for 2/3 of March.
   

In my view, this sort of self-insurance is worth it given the current uncertainty around the price cap.

To conclude, when comparing different tariffs, it seems to be a good idea to simulate the yearly costs using real past data, as the final verdict might be different than what one would think just by looking at the unit costs.

bristolleedsfan

primitus said:

I am currently with Octopus, I live in the London area and have a fixed deal until 11/03/22. I have been offered a new fixed deal, Loyal Octopus 12M Fixed, starting on 12/03/22, with the following prices:

• Electricity: 27.65p per kWh, 23.30p sc per day;
• Gas: 8.49p per kWh, 26.10p sc per day.

When were you offered those rates, a more expensive version was launched couple of weeks ago.

Last week someone on here renewed at more expensive rates, on the same day someone posted elsewhere renewed at above rates.

primitus

bristolleedsfan said:

primitus said:

I am currently with Octopus, I live in the London area and have a fixed deal until 11/03/22. I have been offered a new fixed deal, Loyal Octopus 12M Fixed, starting on 12/03/22, with the following prices:

• Electricity: 27.65p per kWh, 23.30p sc per day;
• Gas: 8.49p per kWh, 26.10p sc per day.

When were you offered those rates, a more expensive version was launched couple of weeks ago.

Last week someone on here renewed at more expensive rates, on the same day someone posted elsewhere renewed at above rates.

They were offered to me on 26 January and I accepted them on the same day.

P.S.: Here's a link to the full resolution image from the main post.

facade

I am on the same fix. Between April and October I break even, if the October prices shoot up, I win. If prices come down, or a better fix appears, I change tariff.

We are over paying 1p for gas, but saving 23p a day on the standing charge,  so if we use less than 23 kWh of gas a day, the fix is cheaper than the cap.

As bristolleedsfan says, this fix was updated to higher prices when panic set in over the likely April cap.