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  • FIRST POST
    • MSE Guy
    • By MSE Guy 11th Jul 11, 11:11 AM
    • 1,628Posts
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    MSE Guy
    MSE News: Guest Comment - Why are energy prices increasing?
    • #1
    • 11th Jul 11, 11:11 AM
    MSE News: Guest Comment - Why are energy prices increasing? 11th Jul 11 at 11:11 AM
    This is the discussion thread for the following MSE News Story:

    "Utilyx energy expert Andrew Horstead says Britain is facing an energy 'trilemma' and consumers stand to pay the price ..."

Page 1
    • Consumerist
    • By Consumerist 11th Jul 11, 3:46 PM
    • 5,226 Posts
    • 2,610 Thanks
    Consumerist
    • #2
    • 11th Jul 11, 3:46 PM
    • #2
    • 11th Jul 11, 3:46 PM
    OK the energy trilogy has now spoken. What has it said?

    1. British Gas: We're only charging customers what it costs us for energy; we're not profiteering.

    2. Ofgem: Not sure about what British Gas says above; can we get back to you on that.

    3. The green lobby: Don't worry about the current high price of energy cos when we get more green energy it's gonna cost you a fortune anyway.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • davidgmmafan
    • By davidgmmafan 11th Jul 11, 7:46 PM
    • 1,447 Posts
    • 522 Thanks
    davidgmmafan
    • #3
    • 11th Jul 11, 7:46 PM
    • #3
    • 11th Jul 11, 7:46 PM
    This is the most sensible article I've seen for some time well done. I know its fun to cry that we are being ripped off but its good to remember there are facts behind it.

    I remember being stunned when I read once that the UK had something like eight days of gas storage where other countries have loads more.

    Ps I can see where the green people are coming from, but I honestly think expansion of this sector is only going to make prices go up. If the rates is guaranteed at over 40p per unit for so called sustainable energy, and the company is selling it for 10-15 pence per unit I don't see how you can square the two without further massive price hikes.
    Last edited by davidgmmafan; 11-07-2011 at 7:52 PM. Reason: Added a PS
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
    • martinthebandit
    • By martinthebandit 11th Jul 11, 7:51 PM
    • 3,946 Posts
    • 6,889 Thanks
    martinthebandit
    • #4
    • 11th Jul 11, 7:51 PM
    • #4
    • 11th Jul 11, 7:51 PM
    Rising energy bills? Its all nonsense apparently, don't know what everyone is getting worked up about

    http://www.spectator.co.uk/coffeehouse/7087828/huhne-poohpoohs-rising-energy-bills-as-nonsense.thtml

    of course he is a multi millionaire so may not have exactly the same view point as most of the rest of us

    If you don't find joy in the snow,
    remember you'll have less joy in your life


    ...but still have the same amount of snow!
  • polka purpura
    • #5
    • 12th Jul 11, 3:44 AM
    • #5
    • 12th Jul 11, 3:44 AM
    I remember being stunned when I read once that the UK had something like eight days of gas storage where other countries have loads more.
    Originally posted by davidgmmafan
    I think this is what happens when you run essential services like a market stall in a free market.


    Ps I can see where the green people are coming from, but I honestly think expansion of this sector is only going to make prices go up. If the rates is guaranteed at over 40p per unit for so called sustainable energy, and the company is selling it for 10-15 pence per unit I don't see how you can square the two without further massive price hikes.
    Originally posted by davidgmmafan
    I don't think all greens support energy generation on such a small and over subsidised scale. Certainly not one where you can have your cake and eat it.
    PAD to date: 1166-22

    Pay off as much as you can #127: 4,600 (2,300 debt / 2,300 saved)in 2011.660 / 4,600.(debt paid 28.7%; target 14.3%).

    Sealed pot challenge 1292: 0 (target 600 by 31-12-11)
  • polka purpura
    • #6
    • 12th Jul 11, 3:47 AM
    • #6
    • 12th Jul 11, 3:47 AM
    There was no mention of social tariffs and payments in the article.
    PAD to date: 1166-22

    Pay off as much as you can #127: 4,600 (2,300 debt / 2,300 saved)in 2011.660 / 4,600.(debt paid 28.7%; target 14.3%).

    Sealed pot challenge 1292: 0 (target 600 by 31-12-11)
  • bengasman
    • #7
    • 12th Jul 11, 7:59 AM
    • #7
    • 12th Jul 11, 7:59 AM
    OK the energy trilogy has now spoken. What has it said?

    1. British Gas: We're only charging customers what it costs us for energy; we're not profiteering.
    Originally posted by Consumerist
    If they only charge us what it costs, how come they made a record profit in the height of recession when almost all of us were hurting?
    Did I dream it, or were there big items in the news that they made over 1000,000,000 profit? ( yes, that is right, over one thousand million )
    • slenderkitten
    • By slenderkitten 12th Jul 11, 9:45 AM
    • 905 Posts
    • 186 Thanks
    slenderkitten
    • #8
    • 12th Jul 11, 9:45 AM
    • #8
    • 12th Jul 11, 9:45 AM
    i don't believe for 5 seconds that the prices have gone up, its just a game to get us to pay more, compared to 5 years ago my payments were 13 weekly now they are 22 a week and i used more energy 5 years ago as i was not in a full time job. yes i do have an energy monitor on and i switch everything i don't need on; OFF!

    YOU WORK THAT ONE OUT! - they are ripping people off for no good reason
    My Signature is MY OWN!!
    • posh*spice
    • By posh*spice 12th Jul 11, 10:33 AM
    • 1,389 Posts
    • 2,507 Thanks
    posh*spice
    • #9
    • 12th Jul 11, 10:33 AM
    • #9
    • 12th Jul 11, 10:33 AM
    i don't believe for 5 seconds that the prices have gone up, its just a game to get us to pay more, compared to 5 years ago my payments were 13 weekly now they are 22 a week and i used more energy 5 years ago as i was not in a full time job. yes i do have an energy monitor on and i switch everything i don't need on; OFF!

    YOU WORK THAT ONE OUT! - they are ripping people off for no good reason
    Originally posted by slenderkitten
    No. We passed peak gas in the north sea in 1999. Gas depletes very quickly. In the last year natural gas coming out of the North Sea has depleted by 20%. We have to import that lost gas. Hence the hike in your gas bills. Also many UK electricity power stations are powered with gas. Hence the hike in your electricty bill.



    http://en.wikipedia.org/wiki/Peak_gas


    The UK has been enjoying an energy party from the North Sea. What the politicians don't want to tell you is the party's over! We've emptied the North Sea of Gas and Oil - there's nothing left!
    Last edited by posh*spice; 12-07-2011 at 10:55 AM.
    • JSR
    • By JSR 12th Jul 11, 11:21 AM
    • 185 Posts
    • 96 Thanks
    JSR
    i used more energy 5 years ago as i was not in a full time job.

    YOU WORK THAT ONE OUT! - they are ripping people off for no good reason
    Originally posted by slenderkitten
    These are British gas profits since five years ago. The figures in brackets are inflation adjusted (link).

    2006 640m (758m)
    2007 571m -11% (649m)
    2008 379m -34% (414m)
    2009 598m +58% (652m)
    2010 742m +24% (742m)

    It does not look like a company that is profiteering. The profits are just volatile. Large gains but also large falls. The real terms profit from five years ago are more than this year's despite the unusually cold winter.
  • bengasman
    These are British gas profits since five years ago. The figures in brackets are inflation adjusted

    2006 640m (758m)
    2007 571m -11% (649m)
    2008 379m -34% (414m)
    2009 598m +58% (652m)
    2010 742m +24% (742m)

    It does not look like a company that is profiteering.
    Originally posted by JSR
    During the the height of the recession, the profits went up by 58% in one year, whilst the man in the street was suffering.

    If that is not profiteering, I really don't know what is.
  • gazjoneswales
    During the the height of the recession, the profits went up by 58% in one year, whilst the man in the street was suffering.

    If that is not profiteering, I really don't know what is.
    Originally posted by bengasman
    Dont you also realise that these 2 years of profit growth come on the back of two exceptionally cold winters. If people use more of something then ofcourse levels of profits will increase.
  • bengasman
    Dont you also realise that these 2 years of profit growth come on the back of two exceptionally cold winters. If people use more of something then ofcourse levels of profits will increase.
    Originally posted by gazjoneswales
    True as that may be, BG had MASSIVE price increases during this period.
    For obvious reasons, they make as much noise as possible when they lower the price around the time the whole country has switched the heating off, and are as quiet as they can when they up the price.

    It's profiteering all right.
  • gazjoneswales
    True as that may be, BG had MASSIVE price increases during this period.
    For obvious reasons, they make as much noise as possible when they lower the price around the time the whole country has switched the heating off, and are as quiet as they can when they up the price.

    It's profiteering all right.
    Originally posted by bengasman

    I dont think bg can ever be quiet when they put the prices up. Its all over the news, papers and internet
    • Skymist
    • By Skymist 12th Jul 11, 1:15 PM
    • 404 Posts
    • 1,512 Thanks
    Skymist
    With regards to price hikes/rises/ripoffs, this makes me REALLY angry!!!


    http://www.telegraph.co.uk/earth/energy/windpower/8573885/Wind-turbines-switched-off-on-38-days-every-year.html

    and

    http://www.ecoincubation.co.uk/2011/firms-paid-to-shut-down-wind-farms-when-the-wind-is-blowing/

    Energy companies "have to" use "x" %age of renewable energy, and to do so, it costs loads to power down the national grid, which is subsidised by .....US!!!

    What an we expect when it's in the hands of a plonker like this....?

    http://www.spectator.co.uk/coffeehouse/7087828/huhne-poohpoohs-rising-energy-bills-as-nonsense.thtml

    S
  • mech
    These are British gas profits since five years ago. The figures in brackets are inflation adjusted (link).

    2006 640m (758m)
    2007 571m -11% (649m)
    2008 379m -34% (414m)
    2009 598m +58% (652m)
    2010 742m +24% (742m)

    It does not look like a company that is profiteering. The profits are just volatile. Large gains but also large falls. The real terms profit from five years ago are more than this year's despite the unusually cold winter.
    Originally posted by JSR
    British Gas? Not Centrica? You know... the parent company who has gas producing capacity and whose profits from that side of the business would therefore have gone up since 2006/2007 following higher wholesale prices? Surely concentrating solely on the British Gas subsidiary is misleading?

    • posh*spice
    • By posh*spice 12th Jul 11, 5:03 PM
    • 1,389 Posts
    • 2,507 Thanks
    posh*spice
    With regards to price hikes/rises/ripoffs, this makes me REALLY angry!!!


    http://www.telegraph.co.uk/earth/energy/windpower/8573885/Wind-turbines-switched-off-on-38-days-every-year.html

    and

    http://www.ecoincubation.co.uk/2011/firms-paid-to-shut-down-wind-farms-when-the-wind-is-blowing/

    Energy companies "have to" use "x" %age of renewable energy, and to do so, it costs loads to power down the national grid, which is subsidised by .....US!!!

    What an we expect when it's in the hands of a plonker like this....?

    http://www.spectator.co.uk/coffeehouse/7087828/huhne-poohpoohs-rising-energy-bills-as-nonsense.thtml

    S
    Originally posted by Skymist
    So you're a global warming/ resource depletion denier are you?
  • CotswoldRambler
    a missing bit...
    Thought provoking though it is this article makes no comment about the major reason we all complain about energy prices.

    Thanks to the competitive nature of our energy market we are subject to far greater volatility in prices than we would have if the suppliers had not been privatised. Yes they do make profits but we should remember what the alternative would be.

    When the idea of privatising the state run monopolies was first raised I met some electricity workers as they installed a sub-station. I asked what they thought of the idea of privatisation - expecting them to have the standard outraged response. Extraordinarily for a workforce with a very strong union who usually did anything they could to prevent management making sensible changes to very wasteful working practices they loved the idea of privatisation. When I asked what it would mean they said it was the best thing that could happen and that whilst there would be initial price rises whilst the idea of profits were established costs would then reduce and prices would fall lower and lower.

    Rather than being outraged at the cost of energy we should be grateful that the cost is a much lower percentage of our income than it would be if the market was still a monopoly. Sudden price hikes are the penalty we pay for having a competitive market with low initial prices.

    Rather than complaining we should take control of our energy usage and take steps to stop wasting so much. We set our heating far higher than we used to so we can sit around in our underwear and eat too much.
    • grahamc2003
    • By grahamc2003 12th Jul 11, 7:12 PM
    • 1,747 Posts
    • 1,373 Thanks
    grahamc2003
    Thought provoking though it is this article makes no comment about the major reason we all complain about energy prices.

    Thanks to the competitive nature of our energy market we are subject to far greater volatility in prices than we would have if the suppliers had not been privatised. Yes they do make profits but we should remember what the alternative would be.

    When the idea of privatising the state run monopolies was first raised I met some electricity workers as they installed a sub-station. I asked what they thought of the idea of privatisation - expecting them to have the standard outraged response. Extraordinarily for a workforce with a very strong union who usually did anything they could to prevent management making sensible changes to very wasteful working practices they loved the idea of privatisation. When I asked what it would mean they said it was the best thing that could happen and that whilst there would be initial price rises whilst the idea of profits were established costs would then reduce and prices would fall lower and lower.

    Rather than being outraged at the cost of energy we should be grateful that the cost is a much lower percentage of our income than it would be if the market was still a monopoly. Sudden price hikes are the penalty we pay for having a competitive market with low initial prices.

    Rather than complaining we should take control of our energy usage and take steps to stop wasting so much. We set our heating far higher than we used to so we can sit around in our underwear and eat too much.
    Originally posted by CotswoldRambler
    Not sure why you think that.(the bold bit).

    I worked in the industry for many years throughout the various stages of privatisation and helped to concieve many of the additional processes the market participants now have to do which previously didn't exist. Hundreds of consultants worked for over a decade inventing and impementing these things.

    My opinion today is that bills today are much higher than they would be if the cegb still existed, and the ideals of competition ensuring a lean, mean and efficient electrical supply industry have failed spectacularly.
  • bengasman
    So you're a global warming/ resource depletion denier are you?
    Originally posted by posh*spice
    I most certainly am, at least the nonsense about global warming being anthropogenic.
    The climate has being warming up slowly for the past 400 years at virtually the same rate. How much gas/oil production was there 400 years ago?
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