Don't take a Fix !?

MultiFuelBurner

With the latest predictions coming in for a very cheap 2024 is it now time to suggest staying on the price cap SVT tariffs rather than fixes?





Source

https://www.cornwall-insight.com/press/price-cap-predicted-to-fall-by-14-in-april/

JSHarris

I believe so.  My prediction (barring another major world event) is that wholesale prices for the first quarter 2024 will be not far off those for the last quarter 2023, then they will reduce slightly through next summer and may well not end up more than they are now by the last quarter 2024.

If that turns out to be correct, then 2024 overall should be cheaper than 2023, although perhaps not as large a drop as there was between 2023 and 2022.

MattMattMattUK

I agree that it does not make sense to move to to a fix, but whilst that is a decision I am happy to take for myself, it is not one I would want to take for others, particularly those who are risk averse. 

MultiFuelBurner

MattMattMattUK said:

I agree that it does not make sense to move to to a fix, but whilst that is a decision I am happy to take for myself, it is not one I would want to take for others, particularly those who are risk averse. 

Indeed, just getting my thoughts and links in a row for the next "shall I fix" thread.

Just present the evidence known and guessed and as always it's the posters choice.

Could be interesting for E7 rates if the predictions come true.

JSHarris

MultiFuelBurner said:

Could be interesting for E7 rates if the predictions come true.

The main issue with E7 rates is that the connection between wholesale price and retail price for the off-peak period gets very seriously bent out of shape by the way suppliers tend to disproportionately  increase off-peak prices in winter to offset peak rates for marketing reasons.  This is clear from the wide variation in SVR E7 off-peak prices when compared to the variation in peak prices.

My quick and dirty look around the market over the past week shows that for my region the difference between the cheapest off-peak SVR E7 price and the most expensive one on my list is is about 46%.  The variation between the cheapest peak rate on that list and the most expensive peak rate is about 14%.

This makes estimating E7 rates challenging, as all the forecasts look at wholesale price variation.

MultiFuelBurner

JSHarris said:

MultiFuelBurner said:

Could be interesting for E7 rates if the predictions come true.

The main issue with E7 rates is that the connection between wholesale price and retail price for the off-peak period gets very seriously bent out of shape by the way suppliers tend to disproportionately  increase off-peak prices in winter to offset peak rates for marketing reasons.  This is clear from the wide variation in SVR E7 off-peak prices when compared to the variation in peak prices.

My quick and dirty look around the market over the past week shows that for my region the difference between the cheapest off-peak SVR E7 price and the most expensive one on my list is is about 46%.  The variation between the cheapest peak rate on that list and the most expensive peak rate is about 14%.

This makes estimating E7 rates challenging, as all the forecasts look at wholesale price variation.

Been here long enough to know the ins and outs of E7 supplier pricing thanks. I just said it will be interesting👍

To add (edit) however I am sure it will be useful to others.

Swipe

Switching and fixing on E7 right now works for me to knock 3p off my Q1 2024 overnight rate as I will use 4000+ kWh off peak between now and the end of March. Come mid April, I'll only be using about 3-4kWh a day in total so any savings by not fixing would be pretty insignificant.

JSHarris

MultiFuelBurner said:

JSHarris said:

MultiFuelBurner said:

Could be interesting for E7 rates if the predictions come true.

The main issue with E7 rates is that the connection between wholesale price and retail price for the off-peak period gets very seriously bent out of shape by the way suppliers tend to disproportionately  increase off-peak prices in winter to offset peak rates for marketing reasons.  This is clear from the wide variation in SVR E7 off-peak prices when compared to the variation in peak prices.

My quick and dirty look around the market over the past week shows that for my region the difference between the cheapest off-peak SVR E7 price and the most expensive one on my list is is about 46%.  The variation between the cheapest peak rate on that list and the most expensive peak rate is about 14%.

This makes estimating E7 rates challenging, as all the forecasts look at wholesale price variation.

Been here long enough to know the ins and outs of E7 supplier pricing thanks. I just said it will be interesting👍

I wasn't implying any sort of ignorance on your part, just highlighting this for those that may not realise how much gaming goes on with off-peak E7 pricing by some suppliers. 

silvercue

I got an email this morning from EDF offering me to fix price before Jan 1st when cap changes.  

I think I will leave it for now.   

dealyboy

@Swipe said:

Switching and fixing on E7 right now works for me to knock 3p off my Q1 2024 overnight rate as I will use 4000+ kWh off peak between now and the end of March. Come mid April, I'll only be using about 3-4kWh a day in total so any savings by not fixing would be pretty insignificant.

Same for me on E7, although the figures are nowhere near as high and low.

I think for me it's a close run thing but I will probably use 5x off-peak in Jan thru March as I will April thru November simply from heating and drying. My peak usage is pretty consistent throughout the year and relatively low (about 2 kWh a day) and at that level a 4-5p 'premium' on the peak rate will not be significant.

The fix comes with a standard £75 penalty for an early exit but I can move to another fix with the same supplier at any time and I can switch six weeks before the end date (mid November), which is also standard.

PennineAcute

If the forecast is correct and fixed tariffs do drop significantly then, bearing in mind the revised formula for Tracker, with NW (over past 7-days  new formula) having a mean of 17.9p when prices are very low, Tracker will not be as tempting as it is now.