Search the Community
Showing results for tags 'standing charge'.
Found 2 results
I've just been reading the latest (rather badly put together) update on the review that Ofgem are undertaking looking at electricity pricing, specifically the means by which the "fixed" element of the network cost is recovered. The latest update (from yesterday) is here: https://www.ofgem.gov.uk/system/files/docs/2017/11/tcr_working_paper_nov17_final.pdf and I think they are way off the mark in the way they are looking at the costs of recovering the fixed operating cost element. We have a market that has been wholly artificially created by government, who have arbitrarily decided to divide electricity supply into three main sectors; those responsible for generation, those responsible for network provision, updating and maintenance and those responsible for selling electricity to consumers. In the first and last instance, a semi-competitive market exists. Anyone can invest in becoming a generator, in essence, it's pretty much a free market, with some constraints in terms of regulatory interference aimed at retaining a reliable mix of generation sources. Similarly, anyone can invest in becoming and electricity retailer, a somewhat simpler task that becoming a generator. Stuck in the middle we have a major lump of the fixed cost element, and this is not competed at all, it is divvied up into Distribution Network Operators that have a monopoly in their particular regions. It seems that it is recovering the costs incurred by these monopolies is thing that is vexing Ofgem, with them suggesting alternatives to the fixed daily standing charge as ways of covering these "fixed" costs. I'm not at all convinced that they are going about this the right way. There seems little incentive to make the DNOs more efficient, and consumers have no control at all over DNO imposed charges that form a part of their bill. My personal view is that a good starting point would be to remove the standing charge system completely, and therefore force those who use more of the network capacity (the high users of energy) to pay more towards the maintenance and upkeep of the network. It'll be interesting to see how Ofgem are steered and directed by the energy industry to deliver a more profitable scheme, as I'm certain that is what the outcome will be, as Ofgem seems a pointless and toothless body that is little more than a talking shop to allow the industry to do as it wishes.......................
My recently completed self build in Wales is used as a holiday home mainly at weekends. The building is only small (net 71sq.m) and with the intermittent use my electric usage is very low so the £100 annual standing charge is inevitably a very large percentage of my overall bill. I've therefore been looking around for a supply option which doesn't have the standing charge element. I thought this may be of interest to those of you who, like me, have low electric demand. This weekend I've switched to Scottish Power's "PowerUp" tariff. The idea is that you pre-pay for your power up to a year in advance. The further ahead you pre-pay the lower the kWh unit price. If you buy a 6 month package the unit price is only about 0.5p/kWh more than the standard variable rate but the big advantage is there's no standing charge. I should therefore save about £90 a year. Ian