Energy prices - will they go up in winter as per some scare stories?

UnsureAboutthis

I got an email the other day from U-switch I think. They were banging on about a fixed-priced deal with BG
I've just looked up Google and some stories about possible rises by some, so-called " energy intelligence.." company.

Yes, I'm aware that not even I can predict the future but why would prices go back up in winter as suppliers often buy in advance is my understanding

Currently, I'm with the variable rate since coming of the fixed rate about 18 months ago.

BarelySentientAI

UnsureAboutthis said:

Yes, I'm aware that not even I can predict the future but why would prices go back up in winter as suppliers often buy in advance is my understanding

They always do.

Less solar, more gas used for heating and so not used for power generation, more demand because there are more lights, more electric heaters, less daylight...

Suppliers might buy in advance, but they're not buying electricity to be used in winter at summer prices.

EssexHebridean

The main MSE has on ongoing item about energy prices IIRC. The most reliable source of information on future pricing is from Cornwall Insight - right now they were have a reasonably degree of accuracy for the October pricing, and a lower degree of accuracy for anything beyond that, so bear this in mind. It is however expected that there will be a price increase in October though. 

The main MSE site also has information about the various fixes available, but of course you need to do your own sums in comparison with the price you are paying currently and what you anticipate paying later i the year to decide if they are right for you, or not. 

spot1034

Wholesale prices for the forthcoming winter - which is what suppliers will be paying when buying in advance - have increased significantly in the past three months or so. We are already about half way through the assessment period which will determine the price cap between Oct 1st and Dec 31st, and it is therefore possible to say, not with certainty yet, but with an increasing probability of being more or less correct, that prices will rise, probably somewhere in the region of 10% in October.

This will give you an idea of forward prices - click on a date to see how the price has fluctuated. https://www.ice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5419497

UnsureAboutthis

Cheers all. We all know that a fixed price will be higher than the current viable rate. I was looking for a possible 12 month fix but a quick look - I'm not sure it is worth it
Looking at the link poster by, spot1034, it doe look as though prices will rise

We also have the uncertainty regarding the war.  I'm totally undecided but I will also look at MSE offers/comparisons on this site.

Scot_39

It is sadly the inherent nature of click bait journalism - and in order to get that attention - certain energy charities with their own agenda - to sensationalise any upward price change.

(And yes - scare stories - as that really can be their impact.  They appear to have learnt nothing from 2 years ago - when many - some of whom actually saved in real £s in end due to likes of ebss, epg and if pensioner wfp increase - but were actually left frightened to turn heating on. Including 2 of my elderly neighbours.)

Cornwall Insights has just revised its Oct cap estimate down from May's to £1723 based on June's market prices.

That's down £38 over the month - Mays prediction was £1761.

But is still £155 more expensive than the current July cap of £1568.  Or c10%

But in all of this panic/media sensationalism its easy to forget that is still £111 below last October's actual cap of £1834.

And that's despite significant increases in policy costs in Apr - e.g. £17 inc to £28 for debt, £30 on standard policy and £10 prepay levilisation for dd / credit caps.  Those 3 alone £57.  So you might argue should have been more like £160 cheaper.

But I am sure the next govt will be under pressure to address.


And we are a very long way from the true market highs which led to cap of £4279 in Jan 22 - with only the lucky on normal direct domestic protected by taxpayers via the £2500 EPG. Many on community heat schemes were not or are now not as the play catchup.

And last year Jan saw a further price rise of c£94 - £1834 to £1928.

But remember these are only historical observations (my view likely to repeat for supply / demand reasons above in normal times - without current geopolitics state) and in CI case best guess predictions.

Prices used to vary but our prices only changed annually, then 6m, now 3m, making seasonality far more obvious.

For reference 

History of price caps since 2019  at 

https://www.ofgem.gov.uk/energy-policy-and-regulation/policy-and-regulatory-programmes/energy-price-cap-default-tariff-policy/energy-price-cap-default-tariff-levels


Cornwall Insights current prediction - updates monthly normally 

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

(You can search there press releases for older announcements)