Will standing charges increase in April 23? 12 February at 1:36PM in Energy 42 replies 1.3K views

Apodemus

markin said:

ariarnia said:

EssexHebridean said:

Dolor said:

EssexHebridean said:

Dolor said:

MikeJXE said:

macman said:

MikeJXE said:

Mstty said:

MikeJXE said:

IMO yes as it's the only way energy companies can get more out of you when you are using less. 

It's.not set by the energy companies.

As far as I can remember I have always paid a standing charge, I keep being told it's for the infrastructure 

So are you saying thats not true the government takes it all. ? 

The energy companies (by which in this instance I assume you mean the retail suppliers) neither own nor maintain the supply network. That is done by National Grid, and the regional DNO's. SSE and SP also have some share in the ownership of the electricity grid.
You need to distinguish between the wholesale suppliers, distributors, and retail suppliers, as they are totally separate companies doing totally separate functions.
Just referring to 'energy companies' as one amorphous profiteering mass is extremely misleading.
He didn't say 'the gov't takes it all'. He said that the s/c level is determined by the regulator.

It seems to me only I answered the question from the OP

will standing charges increase from their current levels ?

I do know what the standing charge is I have been told many many times  but thats irrelevant to the question. 

Everyone else seems to have got sidetracked by my answer explaining what the standing charge is instead of sticking to the post. 

Perhaps it should be renamed Government levy or tax or whatever is appropriate so that users are not confused and will know exactly what they are paying for.

Does this government want to be more transparent ? I think not 

It is not a Government tax per se. The standing charge covers the cost of getting energy to your home AND the cost of Government energy support schemes PLUS the cost of failed suppliers.

The Government could have chosen to bin the Consumer Levy which would have left millions of consumers out of pocket as their credit balances would have realised pennies for every pound.

The ongoing argument about adding a hydrogen levy to the standing charge is that it would be a hidden Net Zero tax.

There are already aspects of the current SC that are related to Net Zero, no? Is the Hydrogen thing going to be buried in with those, or a specific item on its own? (Apologies if this has been mentioned and I missed it!) 

Make of this what you will.

Why do we need a levy and what will be the impact on consumer bills?

The purpose of the levy is to provide long-term funding for the hydrogen business model, which will enable hydrogen producers to overcome the operating cost gap between low carbon hydrogen and fossil fuels.

The levy is not expected to be implemented until 2025 (subject to legislation being in place) and so we do not expect it to have impacts on consumer bills before then. Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security. As policy development on the levy is ongoing, with a number of key decisions still pending, there is uncertainty regarding the precise impact of the levy on consumer bills.

Source: Gov.uk

So what do we think. Finish clearing the SOLR debt, the Bulb situation then leaves the SC with an uplift, and when that finishes the Hydrogen levy means we STILL have the uplifted charge?

Come to think of it - heaven help us when we have to start explaining that one to people as well, as seemingly there aren’t enough words of one syllable to make clear that the SC is NOT a revenue earlier for suppliers! 

once something has gone up then its easier to keep it at that level (to pay for 'other' things) than to reduce it and pay for taxes. 

people (wrongly) blame energy companies for the standing charge but blame the goverment for tax rates. 

if you were the chanceller which would you prefer

People need to know who to blame.


"National Grid generated approximately 18.4 billion British pounds in its 2022 fiscal year, an increase of roughly 25 percent in comparison to a year earlier"

That would install a lot of Grid storage, Or a new nuclear plant every other year.

I've got no axe to grind on this, but I am always wary of taking figures at face value, so I looked up this one... 

I'm not sure where you got that figure from, but a quick check on the National Grid accounts, suggests that you are quoting Revenue rather than Profit.  About half of that Revenue was generated in North America, rather than in UK.  Actual Profit was about £4 billion and after tax profit about £2 billion.  They also have to reinvest in their existing infrastructure and that comes to about £7 billion a year.

markin

Apodemus said:

markin said:

ariarnia said:

EssexHebridean said:

Dolor said:

EssexHebridean said:

Dolor said:

MikeJXE said:

macman said:

MikeJXE said:

Mstty said:

MikeJXE said:

IMO yes as it's the only way energy companies can get more out of you when you are using less. 

It's.not set by the energy companies.

As far as I can remember I have always paid a standing charge, I keep being told it's for the infrastructure 

So are you saying thats not true the government takes it all. ? 

The energy companies (by which in this instance I assume you mean the retail suppliers) neither own nor maintain the supply network. That is done by National Grid, and the regional DNO's. SSE and SP also have some share in the ownership of the electricity grid.
You need to distinguish between the wholesale suppliers, distributors, and retail suppliers, as they are totally separate companies doing totally separate functions.
Just referring to 'energy companies' as one amorphous profiteering mass is extremely misleading.
He didn't say 'the gov't takes it all'. He said that the s/c level is determined by the regulator.

It seems to me only I answered the question from the OP

will standing charges increase from their current levels ?

I do know what the standing charge is I have been told many many times  but thats irrelevant to the question. 

Everyone else seems to have got sidetracked by my answer explaining what the standing charge is instead of sticking to the post. 

Perhaps it should be renamed Government levy or tax or whatever is appropriate so that users are not confused and will know exactly what they are paying for.

Does this government want to be more transparent ? I think not 

It is not a Government tax per se. The standing charge covers the cost of getting energy to your home AND the cost of Government energy support schemes PLUS the cost of failed suppliers.

The Government could have chosen to bin the Consumer Levy which would have left millions of consumers out of pocket as their credit balances would have realised pennies for every pound.

The ongoing argument about adding a hydrogen levy to the standing charge is that it would be a hidden Net Zero tax.

There are already aspects of the current SC that are related to Net Zero, no? Is the Hydrogen thing going to be buried in with those, or a specific item on its own? (Apologies if this has been mentioned and I missed it!) 

Make of this what you will.

Why do we need a levy and what will be the impact on consumer bills?

The purpose of the levy is to provide long-term funding for the hydrogen business model, which will enable hydrogen producers to overcome the operating cost gap between low carbon hydrogen and fossil fuels.

The levy is not expected to be implemented until 2025 (subject to legislation being in place) and so we do not expect it to have impacts on consumer bills before then. Once introduced, we expect its impacts will ramp up as we look to deliver our 2030 hydrogen ambitions to improve energy security. As policy development on the levy is ongoing, with a number of key decisions still pending, there is uncertainty regarding the precise impact of the levy on consumer bills.

Source: Gov.uk

So what do we think. Finish clearing the SOLR debt, the Bulb situation then leaves the SC with an uplift, and when that finishes the Hydrogen levy means we STILL have the uplifted charge?

Come to think of it - heaven help us when we have to start explaining that one to people as well, as seemingly there aren’t enough words of one syllable to make clear that the SC is NOT a revenue earlier for suppliers! 

once something has gone up then its easier to keep it at that level (to pay for 'other' things) than to reduce it and pay for taxes. 

people (wrongly) blame energy companies for the standing charge but blame the goverment for tax rates. 

if you were the chanceller which would you prefer

People need to know who to blame.


"National Grid generated approximately 18.4 billion British pounds in its 2022 fiscal year, an increase of roughly 25 percent in comparison to a year earlier"

That would install a lot of Grid storage, Or a new nuclear plant every other year.

I've got no axe to grind on this, but I am always wary of taking figures at face value, so I looked up this one... 

I'm not sure where you got that figure from, but a quick check on the National Grid accounts, suggests that you are quoting Revenue rather than Profit.  About half of that Revenue was generated in North America, rather than in UK.  Actual Profit was about £4 billion and after tax profit about £2 billion.  They also have to reinvest in their existing infrastructure and that comes to about £7 billion a year.

Yes your correct, i was lazy and just looked at the Google highlighted snippet.

"Google's automated systems determine whether a page would make a good featured snippet to highlight for a specific search request."


May 2022.
https://news.sky.com/story/national-grids-profits-rise-to-3-4bn-amid-growing-energy-bills-12616860

"National Grid has seen its annual pre-tax profits increase by 107% to £3.4bn."