Electricity companies overcharging?

Tiger_greeneyes

I watched a news programme the other day where it stated that electricity companies are charging us for electricity based on the price of the gas it takes to make it. On the National Grid Clock https://grid.iamkate.com it shows us that at any one time, only 20-40% of our electricity is made by gas, the rest is made by renewable or other sources which are often far cheaper but we're not being charged the cheaper price.

Has anyone else come across this? I've drafted a letter to my electricity company based on the fact I pay by Direct Debit but just wondered if there's any information I've missed on MSE after searching for a while and not finding anything.

News segment

Edited for clarity

la531983

Tiger_greeneyes said:

 only 20-40% of our gas is made by electricity

Erm, other way round?

Really not sure what you are expecting. The gas price will impact the electric price based on how much gas is needed to generate, and it all goes into the same grid with the renewables.

born_again

What are you hoping to achieve?

Rates are not set by companies. Ofgem do that.

GingerTim

Unfortunately you are working from a basic misapprehension of how the energy market works.

What did you plan on saying in your letter?

MacPingu1986

Wholesale electricity markets are pretty complicated - various different power sources feel into the wholesale price, including gas fired power stations. This rate is up and down all the time during the day etc..

This is entirely different to the unit rate that you're charged under your tariff (unless you're on one very specific Octopus tariff which tracks wholesale prices).

I'm not sure what you're planning to say in your letter but unfortunately wholesale electricity prices aren't set by your electricity supply company.

Tiger_greeneyes

la531983 said:

Tiger_greeneyes said:

 only 20-40% of our gas is made by electricity

Erm, other way round?

Really not sure what you are expecting. The gas price will impact the electric price based on how much gas is needed to generate, and it all goes into the same grid with the renewables.

Oops, yes, sorry! I have brain damage and often get things the wrong way around. I've fixed it now, thanks for pointing it out!

MattMattMattUK

la531983 said:

Tiger_greeneyes said:

 only 20-40% of our gas is made by electricity

Erm, other way round?

Really not sure what you are expecting. The gas price will impact the electric price based on how much gas is needed to generate, and it all goes into the same grid with the renewables.

They are correct on that, at least at the moment, over the last twelve months around 33% of UK electricity has been generate from gas, over the past week it has been 21%.

Tiger_greeneyes

This is the news article I was sent, the first 30 seconds is about reading your meters yesterday, after that is what has concerned me

Energy bills segment

https://www.gbnews.com/money/energy-bills-meter-reading-price-cap

amanda1024

You can find more information about the current government review of the electricity market and a consultation here: https://www.gov.uk/government/consultations/review-of-electricity-market-arrangements-rema-second-consultation
possibly that’s what the news programme was referring to?

Tiger_greeneyes

Thanks Amanda, it was actually this news segment that peaked me...

la531983

Tiger_greeneyes said:

MattMattMattUK said:

Tiger_greeneyes said:

This is the news article I was sent, the first 30 seconds is about reading your meters yesterday, after that is what has concerned me

Energy bills segment

https://www.gbnews.com/money/energy-bills-meter-reading-price-cap

Firstly it is GB News, you will probably get more accurate information from the angry bloke in the nearest 'spoons.

That article and video clip is pandering to a specific demographic, it is using snippets of truth and combining it with a narrative to stir up anger amongst the ill-informed and misinformed. 

Your energy supplier also has no ability to change what it pays for energy, that is set by the UK energy market under the control of the government, where the cost paid per kWh over the day is linked to the highest cost kWh (otherwise generators would just cut generation to drive up cost).

I don't care who it was that said it, I like to think I'm open minded on that score, anyway it's the expert's message I'm discussing. Regarding it "being a narrative to stir up anger amongst the ill-informed and misinformed certain demographic", I find that pretty elitist as I don't believe I'm any of those things because my expertise isn't in energy matters and I'm asking for other people's opinions. Anyway, I digress. 

Surely the energy companies only pay for the gas that's used? What about companies who say they use 100% renewable energy? Surely that would mean they don't use any gas at all? If that's the case, why should people be paying the gas price when the energy wasn't produced by gas?

Unluckily for you their electric comes from the same Grid as everyone else, mixed in.