Why are Energy Prices not falling?

ariarnia

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

agentcain

[Deleted User] said:

agentcain said:

macman said:

agentcain said:

GingerTim said:

How do you propose forcing a bankrupt company to fulfil a contract, or forcing another company to take on another's contract?

The same way everyone else seems to be forced, by legislation.
You just make it so others who want to trade are forced to honour contracts set by failed suppliers, if they become SOLR.
As for the bankrupt company, go after their shareholders and make them pay back the credits. Have you seen what the owners of Bulb are doing? They have a brand new company, jumping on the bandwagon of net-zero, no doubt trying to get a piece of the current action.

spot1034 said:

agentcain said:

Just proves the point though, energy generators will be making a huge profit again.
But don't feel sorry for the energy suppliers as all left have some form of generator backing them up. 

Seems they like having the cake and eating it too. Everyone is quick to justify their high prices by assuming they have "long contracts" and "buying a year in advance". And yet somehow those contracts cannot be invalidated for the benefit of the people.
Where were those contracts of all those suppliers that went bust? What about the contracts of those who fixed with those suppliers only to have their contract invalidated when they were forced to go to a SOLR? 

Many of the companies that went bust didn't have such contracts - they were buying on the spot market and got caught out when prices rose. That is why they went bust.

Which is why their shareholders should be penalized, alongside the existing suppliers who do, according to what you're saying, have contracts yet somehow oppose the idea of ring-fencing customer's credit (which should be expected since they very well plan for the estimated annual consumption of the customer). 

There would be little to be gained from that, since many of the failed suppliers were just one man and a dog type operations: no great string of fat-cat shareholders creaming off dividends I'm afraid. If you want to point the finger, blame Ofgem for allowing so many hopelessly under-capitalised and under-resourced start-ups to enter the market. But then, their hands were tied by their political masters' obsession with 'market freedoms'. 

Which is where legislation and regulatory bodies come into play, i.e. ofgem which has been useless all these years and should also be penalized. Instead, we only saw what, one of the directors quit? Maybe to get away from it all or maybe of genuine concerns about ofgem is run. Regardless, the rest are there and they're all responsible.

That would be a first: a Government penalising one of its own Government Departments. They could impose a significant fine that taxpayers could pay! The Ofgem director who resigned was a non-executive director. 

Ofgem is a non-Ministerial Government Department within the Department for Business and Industrial Strategy. 

Oh no, that's an easy kill. Putting the strain on the taxpayers by fining the department? No. Go after their personal assets. What happens if I get a loan and don't pay back the bank? The bank takes it, it doesn't ask for taxpayers to cover for it. Was there any need for the Bulb director of a failed company to continue being paid 250K? Nope.

agentcain

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

tell me, how well is it working with everyone's bill through the roof, yet no one was asked where they want their energy to come from, how to be priced and whether they want to contribute to anything regarding the latest government's agenda on net-zero etc. I don't see people being responsible that get punished at all.

ariarnia

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

tell me, how well is it working with everyone's bill through the roof, yet no one was asked where they want their energy to come from, how to be priced and whether they want to contribute to anything regarding the latest government's agenda on net-zero etc. I don't see people being responsible that get punished at all.

thats whats called a straw man. i didn't say it was working currently (tho the big problems are caused by things that our government can't make laws about because its the international markets and they can only make laws at uk level). what i'm saying is that your solution wont fix the problem and will make it worse. 

the main uk level reason why we are having this problem is because the ofgem cap was introduced by the government to 'protect' those customers who didn't switch suppliers for years. 

rather than having customers being responsible for the contracts they signed up to. or for not bothering to sign up to a contract at all. the government have protected them. that has created an environment where global events led to energy companies being forced to sell energy for less than it cost to buy. 

that being forced to sell energy for less than it cost to buy is what caused lots of firms to collapse. and you want to make it so that more companies have to do the same. even when they made sure they werent over extending themselves until you made them take on the extra customers?

as far as that is concerned then yes i can see people who decided to take a risk by signing up for a cheap rate with a small company arent being held responsible for there choice.  

but punishing people who were responsible (companies who did hedge and do have financial reserves to cover the contracts there making) wont punish the irresponsible. 

agentcain

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

tell me, how well is it working with everyone's bill through the roof, yet no one was asked where they want their energy to come from, how to be priced and whether they want to contribute to anything regarding the latest government's agenda on net-zero etc. I don't see people being responsible that get punished at all.

thats whats called a straw man. i didn't say it was working currently (tho the big problems are caused by things that our government can't make laws about because its the international markets and they can only make laws at uk level). what i'm saying is that your solution wont fix the problem and will make it worse. 

the main uk level reason why we are having this problem is because the ofgem cap was introduced by the government to 'protect' those customers who didn't switch suppliers for years. 

rather than having customers being responsible for the contracts they signed up to. or for not bothering to sign up to a contract at all. the government have protected them. that has created an environment where global events led to energy companies being forced to sell energy for less than it cost to buy. 

Its not a staw man, but Im not here to convince you otherwise. I will agree with you that the current situation is not working currently, something that was foretold, with numerous warnings against dependence on foreign gas imports.

I do however argue against your point on international markets. Gas is indeed an international market as it can be shipped, stored, pumped etc. However, electricity can't. You can't sell or buy your whole electricity as the interconnections can't take it. Therefore, you can regulate the price of electricity within your country. Then you ask, how do I do that when gas is so expensive. Simple. You disconnect the price of electricity from the price of gas and let each and every supplier/generator use their own fuel mix and sell it. They don't want to sell wind generated electricity at 10p? Well, I would really like to see them try selling it elsewhere!

I am very much behind the cap and what its supposed to protect against. I would hate it to be another circle of internet provider "deals", where you have to keep phoning them not to be taken advantage of because you have more serious things to do in life.

I believe energy contracts have been long broken. Looking at the rates at the moment of sale, I see no justification for the rate being higher within a contract than being on a variable. Surely, they should entice you with lower rates, to be in a contract, which would give them a guarantee of custom to buy energy at lower prices. You know, the difference between PAYG and contracts in mobile providers?

ariarnia

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

tell me, how well is it working with everyone's bill through the roof, yet no one was asked where they want their energy to come from, how to be priced and whether they want to contribute to anything regarding the latest government's agenda on net-zero etc. I don't see people being responsible that get punished at all.

thats whats called a straw man. i didn't say it was working currently (tho the big problems are caused by things that our government can't make laws about because its the international markets and they can only make laws at uk level). what i'm saying is that your solution wont fix the problem and will make it worse. 

the main uk level reason why we are having this problem is because the ofgem cap was introduced by the government to 'protect' those customers who didn't switch suppliers for years. 

rather than having customers being responsible for the contracts they signed up to. or for not bothering to sign up to a contract at all. the government have protected them. that has created an environment where global events led to energy companies being forced to sell energy for less than it cost to buy. 

I do however argue against your point on international markets. Gas is indeed an international market as it can be shipped, stored, pumped etc. However, electricity can't. You can't sell or buy your whole electricity as the interconnections can't take it. Therefore, you can regulate the price of electricity within your country. Then you ask, how do I do that when gas is so expensive. Simple. You disconnect the price of electricity from the price of gas and let each and every supplier/generator use their own fuel mix and sell it. They don't want to sell wind generated electricity at 10p? Well, I would really like to see them try selling it elsewhere!

we do buy electric. its not a huge amount (i think i read 1%) but its really important for making sure we can balance our supply and demand. (so no power cuts). 

the thing you might not know is that nearly half our electric is generated by burning gas. so the cost of making that electric is dependent on the price of gas on the international markets. 

if in 10 or 20 years we have enough domestic generation to decouple the prices then you might have a point. if we were only taking about electric bills and not the gas bills that 85% of homes in the uk have to pay.

but until then my point stands. the problems in the market are more complicated than 'make someone else pay for me signing up for a deal with a company that went bust' 

agentcain

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

ariarnia said:

agentcain said:

EssexHebridean said:

And then when no other supplier is willing to become a SOLR because they know it will risk bankrupting their business too, and the lights start going out for customers of those who failed, what is your plan then? 

Its not about willing, its about that being the price to pay if you want to enter the market. If you're capable to comply and still have a business model, then by all means do. If not, don't. If no one does, well I guess we nationalize it. That's the plan.

are you seriously suggesting i could set up a business tomorrow offering electric for 1p a unit for life. sign up three million people. go bust next week. and ovo or british gas (who were responsible and set there price at a level they could guarentee delivery) should be forced to take on my customers and honour the contract at that price...?

and you dont see a problem with that?

No, I see a problem with this. Why should you be allowed to start this business? Has your business plan been examined and approved by ofgem? If so and proven, then sure. Although I seriously doubt you would be able to provide proof of lifetime guarantees. 

which is great. thats what lots of people want. for companies to have to hedge and ring fence cash so they dont collapse. 

which you completely undermine by saying companies who DO that and ARE responsible have to be liable for contracts from those companies who dont. 

If companies can be made to hedge and ring fence cash, then they can be made to honour contracts of others, as the SOLR is a process of last resort to the benefit of the customer (allegedly).
If everyone plays by the same rules, there won't be anyone being irresponsible, will they?

anyone can be made to do anything. that doesn't mean its fair or right or will end up with the behaviours they want. 

why? because its not the people being irresponsible that will face the consequences. its the people being responsible that you want to punish. 

tell me, how well is it working with everyone's bill through the roof, yet no one was asked where they want their energy to come from, how to be priced and whether they want to contribute to anything regarding the latest government's agenda on net-zero etc. I don't see people being responsible that get punished at all.

thats whats called a straw man. i didn't say it was working currently (tho the big problems are caused by things that our government can't make laws about because its the international markets and they can only make laws at uk level). what i'm saying is that your solution wont fix the problem and will make it worse. 

the main uk level reason why we are having this problem is because the ofgem cap was introduced by the government to 'protect' those customers who didn't switch suppliers for years. 

rather than having customers being responsible for the contracts they signed up to. or for not bothering to sign up to a contract at all. the government have protected them. that has created an environment where global events led to energy companies being forced to sell energy for less than it cost to buy. 

I do however argue against your point on international markets. Gas is indeed an international market as it can be shipped, stored, pumped etc. However, electricity can't. You can't sell or buy your whole electricity as the interconnections can't take it. Therefore, you can regulate the price of electricity within your country. Then you ask, how do I do that when gas is so expensive. Simple. You disconnect the price of electricity from the price of gas and let each and every supplier/generator use their own fuel mix and sell it. They don't want to sell wind generated electricity at 10p? Well, I would really like to see them try selling it elsewhere!

we do buy electric. its not a huge amount (i think i read 1%) but its really important for making sure we can balance our supply and demand. (so no power cuts). 

the thing you might not know is that nearly half our electric is generated by burning gas. so the cost of making that electric is dependent on the price of gas on the international markets. 

if in 10 or 20 years we have enough domestic generation to decouple the prices then you might have a point. if we were only taking about electric bills and not the gas bills that 85% of homes in the uk have to pay.

but until then my point stands. the problems in the market are more complicated than 'make someone else pay for me signing up for a deal with a company that went bust' 

I know how much is generated from what source and how much the interconnections can take, which is why I make these statements.
Some people will not like this, as disengaging the price of electricity from gas means that some suppliers might result in burning too much coal or other fossil fuel sources. But, free market. If they don't like it, they can buy more expensive electricity from 100% gas-fuelled producers or wind/solar farms + batteries/hydros, whatever floats their boat. The fact that 50% comes from gas can be only blamed on recent governments, not the people. They're the ones pushing for net-zero.

Besides, I thought the idea was that we move away from fossil fuels, which would mean that everyone has to use electricity based heating. Yet we see articles about E7 being phased out. smh

asp746

i think once prices are set for consumers at a high rate they will stay that way, i'm on an ok salary and feeling the pinch with the price of my utilities.

Chrysalis

Spoonie_Turtle said:

Chrysalis said:

Spoonie_Turtle said:

Chrysalis said:

tlcgrantham said:

MattMattMattUK said:

SnakePlissken said:

Prices for day ahead gas now down to pre ukraine war level

UK gas prices have also dropped back from their highs earlier this year. The day-ahead gas price closed at 155p per therm yesterday, compared with 200p/therm at the start of 2022, and over 500p/therm in August.

https://i.guim.co.uk/img/media/063732ceadf8eb30acff2e1c9159b6ddcf7a1397/0_0_697_380/master/697.jpg?width=700&quality=45&dpr=2&s=none


https://www.theguardian.com/business/live/2022/dec/29/european-natural-gas-prices-drop-rouble-uk-mortgage-oil-china-covid-business-live

Day ahead prices are irrelevant when it comes to costs paid by consumers, amounts bought on day ahead are less than 1% of supply. The gap between Christmas and New Year, when much of industry is shut down and many large users are offline means day ahead prices always fall as it is highly unlikely that the networks will need to purchase gas as very short notice, even more with the temperature having risen considerably. Sterling is also 18% lower than before the Russian invasion of Ukraine, so even a flat USD price means a sizeable increase for the UK.

Octopus Tracker customers do benefit from “Day Ahead” prices. My Gas Tracker price today is 7.2p/kwh and Electricity Tracker is around 12.00p/kwh. 🤗

Apparently we are irrelevant.

We are irrelevant to the standard variable tariff and the price cap set by Ofgem.

We are only really relevant to Octopus showing how it can be done.  And these types of tariff wouldn't suit everyone anyway.  Tbh if we were paying full Tracker price (capped 55p for elec) without the EPG discount we would have had to seriously consider coming off.

Mine is 35p for reference.

Irrelevant was the wrong word to use, never agreed with the assumptions that a minority of people dont matter.

Not applicable to SVR would have been a better phrase.

That's the thing, the lower caps on the older tariff versions are only in place because Octopus honour ongoing agreements.

As wholesale prices rose and they had to increase their own tariff caps, each new version became less of a no-brainer.  The most recent versions have Octopus caps of 100p/kWh, though it seems Tracker is still withdrawn.  So the low prices in the troughs are great, but even with the EPG discount it's still a huge gamble whether those newer tariffs will work out cheaper overall taking into consideration how high the peaks could be.

Yes I would expect a supplier to honour their contract.  I have a 12 month tariff with a cap of 35p.

Like fixed deals obviously tariffs get withdrawn to new customers and replaced with newer ones to reflect the market, the increases on the "new" agile/tracker tariffs is nothing different to normal fixed deals in that respect, which also got withdrawn.

michaels

Are we expecting Auxilione or Cornwall insights to update their price cap forecasts for April onwards?