Tracker - yay or nay?

TheKDs

Got the email saying tracker by 6th July. Is this still a good idea? Is agile better? Is there a waiting list for that too?

mmmmikey

The things you need to ask yourself are:

1. What is your attitude to risk? If you are risk averse and would prefer the certainty of knowing what you are going to pay then neither Tracker or Agile are good options and you should look at SVR or fixed options.

2. How good are you at staying on top of your admin? These are not tariffs you can set up and ignore, they involve a fair amount of monitoring if you're going to make the most of them.

3. If they get expensive will your personality allow you to switch out or will you be fretting about whether it's best to stay or go?

4. If you still want to switch after considering those things then you should choose Agile if you want a time of use tariff that allows you to save money by avoiding peak periods, or Tracker if you want the same price all day and don't want the hassle of timing what you want when.

All IMHO of course

TheKDs

mmmmikey said:

The things you need to ask yourself are:

1. What is your attitude to risk? If you are risk averse and would prefer the certainty of knowing what you are going to pay then neither Tracker or Agile are good options and you should look at SVR or fixed options.

Depends on the day but I think I'm happier with Tracker for now. The only caveat is the warning that it could double in the winter - but at the moment, I am paying £139 pm on Flexible Tariff. 

2. How good are you at staying on top of your admin? These are not tariffs you can set up and ignore, they involve a fair amount of monitoring if you're going to make the most of them.

I'm pretty good at this but what does the monitoring involve? Decisions that I will not be using the washing machine and hoover on certain days once I've checked the rate for the morning? We already do not use the oven or have used it twice since the winter!

3. If they get expensive will your personality allow you to switch out or will you be fretting about whether it's best to stay or go?

Yes, I would switch out. It says 2 weeks' time so I imagine I would switch out before the winter. I guess the only risk is if there will be decent tariffs to switch to then.

4. If you still want to switch after considering those things then you should choose Agile if you want a time of use tariff that allows you to save money by avoiding peak periods, or Tracker if you want the same price all day and don't want the hassle of timing what you want when.

Yes, definitely Tracker on this count.



All IMHO of course

Thank you, this is a great breakdown! Answers above because I couldn't figure out how to write this above :-)

Dolor

Yes, I would switch out. It says 2 weeks' time so I imagine I would switch out before the winter. I guess the only risk is if there will be decent tariffs to switch to then.

A lot can happen in two weeks. The ‘worst’ is that you end up up paying the maximum Tracker price per kWh for 14 days. There is also a return restriction on Tracker of ‘9 months no return’.

Having been ‘on and off’ Agile and Tracker tariffs for over 5 years, my observation would be that people switch into them too late and stay too long. 

Agile became popular last year for the sole reason that people realised very late in the day that the capped price was below the Ofgem capped unit price. I suspect that very few people proactively changed their usage pattern.

TheKDs

Having been ‘on and off’ Agile and Tracker tariffs for over 5 years, my observation would be that people switch into them too late and stay too long. 

Why, though? How long is too long?

Dolor said:

Agile became popular last year for the sole reason that people realised very late in the day that the capped price was below the Ofgem capped unit price. I suspect that very few people proactively changed their usage pattern.

Proactively changing usage pattern - i.e. reducing consumption at higher charged periods? I did that anyway because I overthink things and I was thinking about general energy use and wasn't on Agile! Lol!

Dolor

Why, though? How long is too long?

Increasing energy prices usually result in a change to fixed tariffs. By the time that people have procrastinated over whether an increase in Tracker is just a short term blip, cheaper fixed rate tariffs have been withdrawn. Economists have a history of getting their assessments wrong. Look at what the IEA has to say. In particular, note their concern about China and LNG imports this coming Winter. We have very little storage to offset a lack of LNG and a very cold Winter. (There is also an ongoing War in Ukraine).

‘This is because Europe’s ability to weather the storm in 2022 was supported by several factors that might not be repeated in 2023:

• Russia cut deliveries sharply in 2022 but nonetheless supplied some 60 bcm by pipeline to the European Union over the course of the year. This included 30 bcm by pipeline during the April-September period when gas storages were filling, contributing either directly or indirectly to storage injections. It seems highly unlikely that Russian deliveries will reach these levels in 2023. And Russian pipeline supplies could cease entirely.
• Europe’s success in increasing LNG imports was enabled in large part by lower import demand from China because of slower economic growth and Covid-induced lockdowns. A recovery in Chinese LNG import demand would intensify competition for cargoes in 2023 and limit their availability to European buyers. 
• Unseasonably mild temperatures in October and the first half of November 2022 effectively delayed the start of the European heating season by around a month. Natural gas consumption in the residential and commercial sectors was around 30% lower during those weeks than in the same period in 2021, leaving a stronger storage buffer for the remaining winter.

Despite a series of measures adopted by the European Union and by individual European countries (see box below) to increase security of supply, a supply-demand gap could open up in 2023 that – if not addressed – could provoke a renewed period of intense price volatility and turbulence in gas markets.’

TheKDs

Dolor said:

Why, though? How long is too long?

Increasing energy prices usually result in a change to fixed tariffs. By the time that people have procrastinated over whether an increase in Tracker is just a short term blip, cheaper fixed rate tariffs have been withdrawn. Economists have a history of getting their assessments wrong. Look at what the IEA has to say. In particular, note their concern about China and LNG imports this coming Winter. We have very little storage to offset a lack of LNG and a very cold Winter. (There is also an ongoing War in Ukraine).

‘This is because Europe’s ability to weather the storm in 2022 was supported by several factors that might not be repeated in 2023:

• Russia cut deliveries sharply in 2022 but nonetheless supplied some 60 bcm by pipeline to the European Union over the course of the year. This included 30 bcm by pipeline during the April-September period when gas storages were filling, contributing either directly or indirectly to storage injections. It seems highly unlikely that Russian deliveries will reach these levels in 2023. And Russian pipeline supplies could cease entirely.
• Europe’s success in increasing LNG imports was enabled in large part by lower import demand from China because of slower economic growth and Covid-induced lockdowns. A recovery in Chinese LNG import demand would intensify competition for cargoes in 2023 and limit their availability to European buyers. 
• Unseasonably mild temperatures in October and the first half of November 2022 effectively delayed the start of the European heating season by around a month. Natural gas consumption in the residential and commercial sectors was around 30% lower during those weeks than in the same period in 2021, leaving a stronger storage buffer for the remaining winter.

Despite a series of measures adopted by the European Union and by individual European countries (see box below) to increase security of supply, a supply-demand gap could open up in 2023 that – if not addressed – could provoke a renewed period of intense price volatility and turbulence in gas markets.’

Thanks - that's a useful analysis. I think I will go with Tracker and switch out when it's end of September. At the moment, we pay about £139 per month for both, 3 bed terraced, 4 members.