An idea to sort out this pricing mess

Chrysalis

An interesting model, although 3000 watt ovens might cause problems.  But it is interesting and it has merit in my opinion.

Alnat1

No good in the UK when we boil 3kW kettles every couple of hours 

QrizB

Alnat1 said:

No good in the UK when we boil 3kW kettles every couple of hours 

3kW kettles aren't the rule.

You can easily buy <2.5kW kettles, and with a bit of looking can find much lower powered ones.

I'm using an 800W kettle at the moment (it's a better match to my solar panels).

jj_43

mountyuk said:

What do you think:

My idea is to set pricing thresholds so that people who use a lot of energy (for example heating an outside swimming pool) subsidise those that are just getting by trying to heat 1 room in a small house and cook dinner.

The thresholds would apply to everyone, but once a threshold is passed the per unit price would rise and any further energy consumed would be charged out at an increased rate. Any number of thresholds could be in place - ensuring that everyone can afford the basics required to survive this winter but those that wanted to and can afford to enjoy excessive use could do so whilst also supporting the less fortunate in society.

I'm not sure if my idea is practical but it strikes me as a fairer way to handle the current crisis.

good idea. everyone has a energy budget. if you use more than your budget your price should reflect the greater cost of building new power stations etc. if you use less, you could trade it with those who have used their allowance.

jrawle

mountyuk said:

jrawle said:

The government could pay everyone's electricity standing charge for them and then give their first 450 kWh of electricity for free. With the October price cap prices, that would cost... about £400 per customer.

Seriously, what is the difference between a lower price tier for the first so many units, and giving a fixed payment as the government are doing? The only difference would be for people who use so little that they don't even reach the upper tier, who would effectively be receiving less from the government. Those cases would be marginal. Everyone else would in effect receive the same subsidy. The big difference would be that a tiered system would be more complex and costly to administer, and confuse people even more, given how many clearly do not understand the price cap, fixed tariffs and direct debit payments as it is.

the £400 is a one off payment and doesn't adapt to/with the price cap.

I stand by my assertion that giving a credit to everyone's energy accounts is equivalent to the first N units being discounted. Stating that the £400 is one off is getting into the details of the current scheme. Likewise, your suggestion of lower unit cost could be for a limited time period, and the amount of discount for the first units could be adjusted according to the level of the price cap. So forget about the £400 figure. And I'll say it again:

Mathematically, there is no difference in having a lower price for the first N units and giving a credit to everyone's account.

Chrysalis

QrizB said:

Alnat1 said:

No good in the UK when we boil 3kW kettles every couple of hours 

3kW kettles aren't the rule.

You can easily buy <2.5kW kettles, and with a bit of looking can find much lower powered ones.

I'm using an 800W kettle at the moment (it's a better match to my solar panels).

Mine is 2200W as measured on smart meter. So yep for less than 3000 watt kettles.

wrf12345

You can buy an electric element from aliexpress for circa £3 inc tax and delivery, it is around 600W and you just stick it in a cup of water to boil it - it is surprisingly well made for the money and the only plastic is in the lead. No wasted heat or water.

At the moment you have three threads on pricing. One: the retail energy companies are vicious about making all the money back they lost when the price cap was mismatched to the wholesale price. Two: the government is letting them and Ofgem get away with this predatory pricing. Three: the net zero agenda means the govn wants people to use a lot less energy but not quite yet as they have a stake in getting that lost money back - see if the new govn has the guts to come clean. Gas prices should continue to go up, electric prices start to come down,

The combination of getting rid of standing charges and have a capped energy rate for the first tier of energy use is the way forward from April next year when the energy companies will finally be embarrassed by how much dosh they have extracted from the consumer and govn.

Brie

I wonder when we are going to stop expecting £££ from the government to fix all our problems.  If we are all given X even if we don't actually need it then it's a waste and that wasted money is coming out of our pockets.  

I do like the idea of those who are both well off and energy greedy paying for that privilege.  And those things do normally go hand in hand.  Bigger salary, bigger house, more gadgets, less concerned about economising as it's not required, able to afford an EV and have the set up to charge it from home.....so those individuals/households shouldn't get the extras being chucked to everyone.  Easy way to decide who gets and who doesn't?  Add a one off (or repeat as required) extra tax exemption for those under a certain salary.  Yes it's still us tax payers that ultimately pay for this but maybe at least that would be fairer.  (yes I'm contradicting myself a tad)  

carolmiers

I live in a tiny eco house - at the moment - not to be boring but someone mentioned buying an element and using it to heat water, eg for a cup or a pot of tea - you just put it in. When I first saw one of these it had belonged to my stepfather and I thought what is this prehistoric thing? But last year when I was offered one - again by a very elderly person ! I took it. It is 350W Marux i think it is Spanish.  Then I have a wood granules heating stove, and I actually have an oven that is on a gas bottle that lasts about three months and costs about £25 a time. So I know when I get the bottle that I have paid for it, no surprises there. Also I have a timer switch for the immersion heater - I didn't get as far as photovoltaic panels and a special hot water tank, but with the timer switch I am trying to reduce the hours it is on for, not sure this will work but here there is a cheaper rate between 2 - 5am so that is when it is coming on (I hope).  I also have a Karmameju loungesuit that was a present that is a thermal suit with a hood. I have only worn it in the car ! - Also i have seen people if they have large rooms, dividing up the room with heavy curtains and heating one part. I did that actually - twelve years ago I was living in a house in winter when it was -10C outside and there was just a wood incert fire, and there was ice inside the window in the shower room, it was not much fun for that but we did hang curtains around the fire area to make a smallish kind of room that was very warm !!  So I am not suggesting everyone does this, I am just sharing what I have done. In fact maybe it would be possible to buy heating vouchers and give them to food banks like the Trussel Trust to give out. I am not saying that the government should not act but if they don't or in any case, if say a heating voucher for £20 could be bought then maybe we could help each other.   Also years ago I lived in a flat and it had an electricity meter and i once ran out and a friend came and put in 50p for me, it used to be possible to pay ahead - if we could pay in advance then at least we would know where we are - as with the gas cannister for the stove, or even those rather dangerous gas fires - or even buying wood you know before you use it that you have paid for it? Sorry for going on, don't all shout at me at once!! 

doodling

Hi,

There are two issues which people are confusing.  There might be a security of supply issue (i.e. having enough energy electricity to meet demand at any instant) and there is definitely a cost issue.

Time of use based tariffs may be a solution to the security of supply issue as they reduce peak demand and make it less likely that we won't have enough electricity to keep the lights on. Time of use tariffs have a marginal impact on cost to consumers as there is normally enough generation to go round and if we do need to pay silly rates to cover instantaneous shortages (as happened a few weeks ago) the actual volume traded tends to be small (and hence the costs relatively low).

The overall cost issue is being driven by the cost of gas and quite simply there will never be a case in the next two years where that is not the case. It doesn't matter what time of day the demand is moved to, it will still be met by gas fuelled generation.  The cost of gas doesn't vary significantly throughout the day so using it at a different time doesn't help.