Economy 7, Night Store Heaters and the Price Cap

Ragged1953

While agentcain is perfectly able to respond, I am prompted to to interject as the OP.
The thread's title is clearly related, not to the energy sector / crisis per se but to a section of it.

Reed_Richards

Back in 2014 I was in a different house with an Economy 7 meter.  I was paying 14.875p per kWh day rate and 6.754p per kWh night rate.  So the night rate was less than 50% of the day rate.  If this differential has not been maintained then I would agree that E7 uses have been unfairly disadvantaged.

QrizB

Reed_Richards said:

Back in 2014 I was in a different house with an Economy 7 meter.  I was paying 14.875p per kWh day rate and 6.754p per kWh night rate.  So the night rate was less than 50% of the day rate.  If this differential has not been maintained then I would agree that E7 uses have been unfairly disadvantaged.

That's an interesting point (although most people are likely to be bored silly and should switch to a different thread now).

By the miracle of the internet, I've found various vintages of EDF's SVT rate card. Looking at the DD prices for the East Midlands region.

April 2013:

• Standard rate electricity is 13.86p/kWh and 18.9p/day SC.
• E7 electricity is 16.77p/kWh day, 6.07p/kWh night (36% of the day price) and 18.9p/day SC.
• Gas, for comparison, is 4.245p/kWh (70% of night-rate E7) and 26.25p/day SC.

Jan 2014:

• Standard rate electricity is 13.55p/kWh and 18.9p/day SC.
• E7 electricity is 16.47p/kWh day, 5.99p/kWh night (36% of the day price) and 18.9p/day SC.
• Gas is 4.079p/kWh (68% of night-rate E7) and 26.25p/day SC.
  

What's interesting about those two rate cards is that, allowing for boiler efficiency and the additional standing charge, at that time gas probably wasn't all that much cheaper than night-rate electricity for many households. (From memory, this was not a normal situation and gas was unusually expensive in the early 2010s.)

Moving on and things change.

March 2017:

• Standard rate electricity is 15.00p/kWh and 18.9p/day SC.
• E7 electricity is 18.19p/kWh day, 6.61p/kWh night (36% of the day price) and 18.9p/day SC.
• Gas is 3.438p/kWh (52% of night-rate E7) and 26.25p/day SC.

Electricity prices are up but the 36% differential for E7 night vs day has been maintained. Gas will now be cheaper than night-rate E7 for most households.

There's a bit of a gap here now (ie. I stopped looking for rate cards). Also, during this period Ofgem introduced their cap on SVTs.

April 2021:

• Standard rate electricity is 18.50p/kWh and 23.78p/day SC.
• E7 electricity is 23.62p/kWh day, 8.28p/kWh night (35% of the day price) and 23.86p/day SC.
• Gas is 3.260p/kWh (39% of night-rate E7) and 26.6p/day SC.

Four years on and we see the first (small) increase in standing charges. Electricity is roughly 25% more expensive than in 2017 but gas has become cheaper. Gas is cheaper than night-rate E7 for pretty much everyone that can get it.

October 2021:

• Standard rate electricity is 20.31p/kWh and 23.77p/day SC.
• E7 electricity is 25.78p/kWh day, 9.79p/kWh night (38% of the day price) and 23.85p/day SC.
• Gas is 3.987p/kWh (41% of night-rate E7) and 26.12p/day SC.

The start of the cost-of-living crisis, although we didn't think of it at the time. Standing charges are down but unit rates are up. The difference between day & night E7 tariffs is only fractionally less than before.

April 2022:

• Standard rate electricity is 27.63p/kWh and 44.75p/day SC.
• E7 electricity is 35.28p/kWh day, 13.4p/kWh night (38% of the day price) and 44.84p/day SC.
• Gas is 7.282p/kWh (54% of night-rate E7) and 27.22p/day SC.

This is where we are now. Standing charges and unit rates are both up, gas having a smaller SC increase but proportionatelly larger unit rate rise. The E7 day/night split is however maintained at 38%. The relationship between gas and night-rate E7 is back to where it was in 2017.

October 2022 (projection based on this forecast):

• Standard rate electricity could be 44p/kWh and 44.75p/day SC.
• E7 electricity could be 57p/kWh day, 22p/kWh night (38% of the day price) and 44.84p/day SC.
• Gas could be 14.2p/kWh (65% of night-rate E7) and 27.22p/day SC.

I can't say with any confidence that EDF will maintain the 38% ratio but their track record has been fairly consistent. The soaring gas price means we're getting back towards E7 competitive again.

littleteapot

It varies dramatically by region. But like others in this thread I have noticed significant 'rate compression' on E7 tarriffs in the last 15 years.

The flat I used to own, and now the house that I own have both been electric-only, so I have been accustomed to looking for the tarriff with the best night rate and optimising consumption to minimise day-rate usage. Our average consumption over the course of a year is 75-80% night rate.

As a rather extreme example, about 4 years ago EDF had a 2 year fix which was about 6p night and 20p day (eastern region). I don't remember what the standing charge was. I.e. night is 30% of day rate.

The last fix I had (March 2020) was 8p night, 16p day, so about 50%.

EDFs current SVR in this region is about 16p night, 31p da, i.e. 52%

I don't know what the October 2022 SVR will be in this region - @QrizB where did you get those figures from - can you share a link?

I'm now on the EDF April 2024v2 tarriff, which is 21p night, 42p day, 38p SC. So again a 50% differential

Also I notice that different suppliers have different splits. I have stayed with EDF because they seem to have the best differential between day and night. For example Scottish Power's "best" E7 fix in Eastern region is as follows:

Unit rate	51.905p per kWh
Economy 7 unit rate	32.043p per kWh
Standing charge	38.000p per day

That's a measly differential, night being about 62% of the day rate. Other suppliers e.g. OVO seem to be offering similarly small differentials.

QrizB

littleteapot said:

I don't know what the October 2022 SVR will be in this region - @QrizB where did you get those figures from - can you share a link?

The prices for single-rate electricity and gas are calculated from the latest Cornwall Insight forecast, as shown at the link provided.

The E7 prices are synthetic values that maintain the 38% ratio while giving an aggregate price similar to the single-rate one.

littleteapot

QrizB said:

The E7 prices are synthetic values that maintain the 38% ratio while giving an aggregate price similar to the single-rate one.

Thanks that makes sense now, I was trying to work out how you came to determine the split between day and night rate before it had been published by ofgem

QrizB

littleteapot said:

QrizB said:

The E7 prices are synthetic values that maintain the 38% ratio while giving an aggregate price similar to the single-rate one.

Thanks that makes sense now, I was trying to work out how you came to determine the split between day and night rate before it had been published by ofgem

I'd need to be precognisant to know that! (I watched Minority Report last night, which prompted the long word.)

Ofgem don't publish a split. They puclish a maximum annual charge for a 4200kWh multi-rate customer who uses 58% on day-rate and 42% on night-rate. Provided they meet this annual total, suppliers can set the day/night split however they choose. They could even set both rates to be the same.

I wrote a more detailed explanation a little while ago; you'll find it here.

molerat

I have got an old rate card on my computer from 2004. 

Standard units  6.815p

Day units   7.488p

Night units  3.196p

So E7 day units were at a 10% premium on standard units and night units were at 57% discount from day units.

How things have changed

agentcain

pochase said:

agentcain said:

You are correct OP. E7 tariffs have been unreasonable disadvantaged and the reported cap rise is nowhere near the rise that E7 customers see. As with everything else from politicians, bankers, activists etc we are of course the ones to blame, the consumers. This forum will blame you for wasting energy, not doing enough to reduce it, accuse you of being arrogant or selfish, anything apart from blaming the real culprits. The real situation is that the market has failed us, the regulator has failed us, no one takes responsibility, no one is actually doing anything remotely useful and at the end of the day the consumer will pay for everything.  

Why do you feel that E7 users have been so unfairly disadvantaged?

People heating with gas have seen a 70% plus increase in April, and by current predictions will see another 94% increase in October.

Gas prices will go up from 4p in March to over 14p per KWh, that is an increase of over 250%. To the contrary of what you are saying prices are shifting in favour of electricity.

Why? Because they can. There's great commotion around rises in gas price, little to no discussion about E7 heating. Price caps on news are always electricity only (following the ridiculous "average home" figure). At the same time, we're told that EVs are great because energy is produced more efficiently in a central location. True, yet that somehow escapes heating?
And then you have people who as you say take on more gas heating. Regardless of the percentage increase, you're still paying less than E7. 

EssexHebridean

pochase said:

agentcain said:

You are correct OP. E7 tariffs have been unreasonable disadvantaged and the reported cap rise is nowhere near the rise that E7 customers see. As with everything else from politicians, bankers, activists etc we are of course the ones to blame, the consumers. This forum will blame you for wasting energy, not doing enough to reduce it, accuse you of being arrogant or selfish, anything apart from blaming the real culprits. The real situation is that the market has failed us, the regulator has failed us, no one takes responsibility, no one is actually doing anything remotely useful and at the end of the day the consumer will pay for everything.  

Why do you feel that E7 users have been so unfairly disadvantaged?

People heating with gas have seen a 70% plus increase in April, and by current predictions will see another 94% increase in October.

Gas prices will go up from 4p in March to over 14p per KWh, that is an increase of over 250%. To the contrary of what you are saying prices are shifting in favour of electricity.

It would be more accurate to suggest that within the bigger picture of electricity rises generally, heavy E7 night-rate users may have been unfairly disadvantaged perhaps. In fairness, although night rates for some of us have indeed increased well above the "headline" 54% figure the day rate inevitably (and as the OP said too) gone up by less than that percentage. Roundabouts and swings for E7 generally - but yes, someone  who uses 75% of their electricity on the cheaper rate is seeing a far steeper increase than the media would have had them expect.