Confused about situation here after price cap change

mrodent33

This page on this site (section "fixed energy deal currently available") is still saying that the fixed rates from Octopus (who I'm with) are at 6% under the price cap. But it was saying that yesterday.

The per-unit LX price at Octopus under the fixed deal I'm being offered is 29.29 p / kWh and gas 7.05 p / kWh. The new price cap appears to be 27.35 p for LX and 6.89 p for gas. NB I'm disregarding the per-day element for simplification.

I'm not criticising MSE or Octopus here, I'm just trying to understand the situation, and also to try and judge whether this Octopus Fixed deal is worth going for (NB exit fees for both gas and LX of £75 each, so it ain't a 2-way street).

My understanding is that today's drop has been widely anticipated for some time, so it should probably be no surprise that Octopus is now slightly ABOVE the new cap.

Wouldn't it be good for MSE to remove statements about rates relative to the previous cap as rapidly as possible after a new cap comes in? It gets confusing for people who aren't thinking about this all day every day.

Any views about switching to this new Octopus Fixed rate? Seems pretty good to me.

la531983

Its only 6 hours since the official announcement, be sorted in due course.

Is it good? Dunno, its higher for electric than the Q4 cap and its predicted to be higher for electric than the ones in every quarter next year (although early days for Q3 and Q4), so depends on usage pattern and your appetite for risk.

https://www.cornwall-insight.com/predictions-and-insights-into-the-default-tariff-cap/

BUFF

mrodent33 said:

Wouldn't it be good for MSE to remove statements about rates relative to the previous cap as rapidly as possible after a new cap comes in? It gets confusing for people who aren't thinking about this all day every day.

as of today it is still the current cap & will be until October 1st.

mrodent33

BUFF said:

as of today it is still the current cap & will be until October 1st.

Hahaha, that's an interesting way of looking at it. Bearing in mind that these are rates which are fixed for 12 months, with in practice no way out of the deal. So if I signed up today that'd be 36 (comparatively warm) days with a 6% discount and then 330 days (bearing in mind that 2024 is a leap year) on a rate which is higher than the (2023 Q4) cap.

matt_drummer

mrodent33 said:

BUFF said:

as of today it is still the current cap & will be until October 1st.

Hahaha, that's an interesting way of looking at it. Bearing in mind that these are rates which are fixed for 12 months, with in practice no way out of the deal. So if I signed up today that'd be 36 days with a 6% discount and then 330 days (bearing in mind that 2024 is a leap year) on a rate which is higher than the (2023 Q4) cap.

The 2023 Q4 price cap won't last for 330 days.

Some of those 330 days may be higher than the currently available fixes.

It's the whole point of a fix, not necessarily to be cheaper than today but to protect against unforseen price rises.

mrodent33

QrizB said:

Disregarding the standing charge "for simplification" isn't helpful. The standing charge makes up roughly 15% of the cap, and Octopus have historically discounted it on their fixed tariffs.

Interesting point.

Octopus Fix: LX 36.5 p / day; gas 27.5 p / day

Cap: LX 53.4; gas 29.6

... from which I conclude that, all other things being equal (NB I am aware that this expression implies "which they aren't"), a light LX user might find the Octopus Fix slightly more attractive.

Last winter I hardly ever turned on my gas CH, preferring to heat individual rooms in my 3-bed semi using oil-filled radiators, for environmental reasons*, rather than economic ones. That approach is likely to be considerably more costly this winter (NB I spend a lot of time at home but never have the heating on at night). But in principle I'd call myself a heavy LX user.

* Before anyone feels like pointing out the bleedin' obvious, yes, I do know that most LX is generated using hydrocarbons. However, Octopus guarantees 100% renewable LX sources, at least on the tarriff I'm on. And Octopus is generally reckoned to be one of the least dishonest with this regard.

QrizB

mrodent33 said:

QrizB said:

Disregarding the standing charge "for simplification" isn't helpful. The standing charge makes up roughly 15% of the cap, and Octopus have historically discounted it on their fixed tariffs.

Interesting point.

Octopus Fix: LX 36.5 p / day; gas 27.5 p / day

Cap: LX 53.4; gas 29.6

Also, you seem to be quoting the national average prices for the cap but the Octopus fix is the one specific for your region?

See table here:
https://forums.moneysavingexpert.com/discussion/comment/80253545/#Comment_80253545

Qyburn

mrodent33 said:

* Before anyone feels like pointing out the bleedin' obvious, yes, I do know that most LX is generated using hydrocarbons. However, Octopus guarantees 100% renewable LX sources, at least on the tarriff I'm on. And Octopus is generally reckoned to be one of the least dishonest with this regard.

There's simply no way that Octopus can supply purely renewable electricity. You get the same generation mix as everyone else which just at this moment is 27% renewable. It may be true thay they only pay for renewable energy, but that doesn't increase the amount. If Octopus stopped buying from renewable sources, they aren't going shut down.

mrodent33

Qyburn said:

There's simply no way that Octopus can supply purely renewable electricity. You get the same generation mix as everyone else which just at this moment is 27% renewable. It may be true thay they only pay for renewable energy, but that doesn't increase the amount. If Octopus stopped buying from renewable sources, they aren't going shut down.

This is a very involved subject, and I don't claim to understand it fully.

My understanding is that the only company which supplies truly "green" LX (and gas, amazingly) is Ecotricity. I believe this means that on a night when there is no wind they are supplying LX only from hydroelectric. In the past I have checked their prices and they'd seemed exceptionally high for my part of the country (London), but in fact I've just checked just now, and to my surprise LX is only 36.6 p / kWh and 38 p / day. Their gas is supplied from something like rotting vegetables (check out website...). I may now switch to them.

Octopus are pretty open about their 100% claim: see this page:

"100% green energy suppliers can purchase enough certificates to cover their customers’ energy usage, and then buy energy wholesale to show that for all the energy a customer uses, another megawatt of renewable-backed energy has been pumped into the grid. We buy enough of these certificates to cover every single unit of energy our customers use. This also ensures that we can supply a steady stream of renewable-backed energy 24/7, when the sun isn’t shining, and the wind isn’t blowing."

I don't agree with your assertion "that doesn't increase the amount". The electrons entering my house are 27% sustainable, so 73% hydrocarbon-generated, but that's a banal point. By consciously choosing a 100% green tariff (if credible) I am contributing to the pressures and distortions exerted on the energy market in this country which will eventually eradicate hydrocarbon-generated LX. 

Octopus do in fact generate a lot of their own green LX as well as buying it in ... and if they "stopped buying from renewable sources" it's reasonable to suppose I would change to someone else within 24 h.

Spoonie_Turtle

Three companies - Ecotricity, Green Energy UK/100Green, and Good Energy - are the ones exempt from the Ofgem price cap as companies providing 100% renewable energy.  (One would assume that means they indeed buy only renewable energy but I don't understand it enough to be able to make that assertion.)

QrizB

mrodent33 said:

Octopus are pretty open about their 100% claim: see this page:

"100% green energy suppliers can purchase enough certificates to cover their customers’ energy usage ...

REGOs are better than nothing, and Octopus have a fairly large zero-carbon generating portfolio, but this Good Energy blog explains the limitations:

https://www.goodenergy.co.uk/blog/does-octopus-energys-big-renewable-deal-mean-an-end-to-greenwash/

Spoonie_Turtle said:

Three companies - Ecotricity, Green Energy UK/100Green, and Good Energy - are the ones exempt from the Ofgem price cap as companies providing 100% renewable energy.  (One would assume that means they indeed buy only renewable energy but I don't understand it enough to be able to make that assertion.)

I think those are the small suppliers mentioned in Octopus's blog as covering all their electricity with PPAs rather than REGOs.

Personally, I'm with Octopus but I've also got rooftop solar and I've bought a slice of Ripple's Scottish wind farm to balance out my remaining grid import.