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Electricity price hike


recoveringbuilder

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Switched from Bulb to Octopus in June on a two year fixed rate. 

 

Just checked and it would be an extra 6.06p per unit if I moved onto the same contract now.

 

I seem to pay silly unit prices compared to other places in the UK. 

 

I've been collecting loads of sticks over the course of the year and now got enough to heat the house over the winter.  

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2 hours ago, Johnnyt said:

How do I stand?

Moved house to self build on 27 August been chasing credit balance of Avro from last property gas/elec account of £365.

Have temp supply in not complete new property with BG and living in our motorhome.

 

Stuffed methinks as new supplier wont be taking over failed account

 

JT

 

PS I need to get my 10 kWp PV array online asap

 

 

OFGEM are clear that credit amounts are protected.

 

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9 hours ago, ProDave said:

For interest I went on Uswitch this evening and after entering all my details "sorry no switches available at the moment" so nobody is taking new customers.

There's usually a very discreet tick box marked something like "include deals you have to switch to directly with the supplier". USwitch doesn't get a commission from them (hence hides them), but they're usually a bit cheaper. When I was looking at the weekend 90% of options were hidden like that, and it's likely to have gone up since - companies feeling the pinch won't want to pay commission.

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Yes, on Quidco today if I don't click that box I get 3 deals. One at £9000 and two at £10500. The £9000 deal kindly lets you lock in current inflated prices for 25 months!

 

If I click it I get the variable price deals at £6600 and the cheapest fixes with Sainsbury's at just over £7000.

 

Another thing you have to watch out for.

 

The wind has massively picked up, currently 40% of generation. The problem is much larger for people with gas heating as it was a lot cheaper but is increasing by much more. This is mainly driven by Russia.

 

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When I first looked at my options with octopus they were showing 3 options for switching to, now it’s down to 2 and these are rising on a daily basis, monthly payment has gone from £101 and it’s now £131 , I was trying to sit it out but it appears that was the wrong thing to do. If I don’t sign up for any of their’deals’ what will I be charged?

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1 hour ago, AliG said:

Another thing you have to watch out for.

 

The wind has massively picked up, currently 40% of generation. The problem is much larger for people with gas heating as it was a lot cheaper but is increasing by much more. This is mainly driven by Russia.

 

 

I doubt global gas price contracts swing up and down as each windy weather system approaches Scotland. The people pricing our domestic kwh rate will be taking a 6 to 18 month view on commodity prices based on annual averages of weather and wind power production.

 

The overall contribution of wind power across Europe as I type this is 11.6%.

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Money Saving Expert are saying avoid switching until it stabilises a bit.

 

Personally I think it will all be very different in just a month or so.

 

I (think - this needs translating https://www.nationalgrid.com/incidents) the burnt down interconnector is about to come back on with 1GW capacity. And the Norway Interconnector comes on stream in the next month at 1.4GW.

 

Plus obvs we are now in autumn wind (sky blue) for Electricity Sources:

image.png.50a6140ae5e6bceee947dd54503cdeef.png

 

Since we use a lot of our gas in producing electricity (though the total gas we use per pop is around Euro average), pivoting perhaps 25% of our electric demand to non-gas will have a significant impact on gas demand, and the amount we have to buy at inflated prices. That's even if we buy Norwegian Gas (which is getting on for half of it) at spot prices.

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46 minutes ago, epsilonGreedy said:

I doubt global gas price contracts swing up and down as each windy weather system approaches Scotland. The people pricing our domestic kwh rate will be taking a 6 to 18 month view on commodity prices based on annual averages of weather and wind power production.

You would think that, but long term contracts tend to follow short term contracts up and down. They are not as volatile, but still much more volatile than you would expect.

 

The Winter 22 future has doubled, I am not sure that there has been any news to suggest the supply/demand balance for winter 22 is going to change that much.

 

Summer 23 which is the longest contract I can see is also up considerably.

 

I have watched the same phenomenon in the bond market over time. A little bit of inflation in one year can cause a considerable increase in 10 and 30 year bond yields, which has never made any sense to me as they should be looking at longer term trends.

 

 

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2 hours ago, Lorenz said:

On the news it said 2 more had gone bust this morning, but not which ones and I cannot find anything for today, anybody know which ones went today?

I think they might still be talking about the two from yesterday.

 

I wouldn't be surprised if the other energy companies refuse to take on any more customers unless the cap is raised. I don't know the ins and outs of the system, it sounds like people bid for the customers. What if no one bids?

 

I have been thinking about the legal situation if your supplier goes bust whilst you have a longer term fixed price contract.

 

This creates a loss for you, which I would think you have a legal claim for. but of course, a legal claim against a bankrupt company is pretty much a waste of time.

 

However, if your bill is in arrears, I think there is a reasonable argument to offset this against the extra cost of energy from their failure to meet the obligations under your fixed price contract. Any legal minds want to chip in here?

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4 minutes ago, AliG said:

You would think that, but long term contracts tend to follow short term contracts up and down. They are not as volatile, but still much more volatile than you would expect.

 

The Winter 22 future has doubled, I am not sure that there has been any new to suggest the supply/demand balance for winter 22 is going to change that much.

 

image.thumb.png.2d380898a874729d5b91243f4630d17e.png

 

Let me see if I am reading your graph correctly, today the price for gas delivery in Winter22 has doubled to 80 something?

 

If this is correct then I do not see much hope for better fixed kwh domestic prices in the near future. There are so many sub waves in that graph it is difficult to interpret with the global dash to wind and coal station closure, Covid recovery, declining north sea output to the UK, Russian gas pipe politics and the UK's poor gas storage capacity.

 

In the medium term when wind+solar routinely to exceed total demand (today's weather in say 2026 is the type of example) the gas price will drop but the cost of installing new wind farms will increase because the operators will know they will supply the grid less often as they will be asked to feather their turbine blades. However we will eventually need a headline wind capacity of 3x winter demand to keep the lights on from CO2 free sources, so in effect the kwh price will be hiked to fund the building of the excess wind capacity.

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2 hours ago, AliG said:

Yes, on Quidco today if I don't click that box I get 3 deals. One at £9000 and two at £10500. The £9000 deal kindly lets you lock in current inflated prices for 25 months!

 

 

 

I am on the British gas (electric supply only) variable rate of 20p kwh. They know my consumption and their quote page concedes the switch to their own fixed deal will add 20% to my annual electricity bill. What do they know that we don't ?

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My guess is it will take around 6 months to sort itself out. 

 

Opening of the new Russian pipeline is the biggest issue.

 

This issue is affecting all of Europe, not just the UK (From what I am reading, UK prices are more volatile as we buy more gas at spot which is normally cheaper but riskier. A bit like a fixed versus variable mortgage)

 

I wouldn't be so negative on renewables @epsilonGreedy. They can already be installed below prevailing fossil fuel costs (this is based on expected capacity factors and prices are expected to continue to fall, although I am a bit skeptical of some of the forecasts)

 

As more wind is installed and more of it moves offshore then there should be less variability in wind supply (spreading it over a larger area), we can also add storage to smooth things out.

 

image.thumb.png.c1071a8ed3cdc2bccac573e4db69a785.png

 

 

 

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36 minutes ago, Lorenz said:

But did prices drop to customers when fuel prices dropped early in 2020, so prices went up again, is that really such a shock to the system?

Yes, part of why this seems like such a large increase is that it is measured from a depressed base driven by COVID.

 

The price of gas has been quite depressed in the last couple of years.

 

I went though my emails to get an idea of what I have paid each year.

 

image.png.c832713f4ec33b4e6ca365637178b340.png

 

 

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1 hour ago, AliG said:

I wouldn't be so negative on renewables @epsilonGreedy. They can already be installed below prevailing fossil fuel costs (this is based on expected capacity factors and prices are expected to continue to fall, although I am a bit skeptical of some of the forecasts)

 

 

I do not agree with this. Although equipment and installation costs might be falling the incentive to build a wind farm is largely governed by the load factor. When Nuclear + Wind + Solar output routinely exceeds UK demand then the prevailing load factors must begin to drop. Put more simply in the future wind farms will spend more time not selling power to the national grid during a decent breeze because there is an excess point-in-time capacity.

 

1 hour ago, AliG said:

As more wind is installed and more of it moves offshore then there should be less variability in wind supply (spreading it over a larger area), we can also add storage to smooth things out.

 

 

Things will might move a few percentage points in a favourable direction but the underlying problem remains, we need a big excess multiple in headline wind capacity to keep the lights on during a period of slow weather. We will be building 10's of Gw of new wind capacity in the full knowledge such farms will spend more time idle due to no demand, consumers will have to pay for this.

 

Take the last 6 week where wind power was mostly below 10% of headline capacity, now shift that weather experience to February 2025, then factor in a halving of our current nuclear capacity, then factor in the dismantling of our remaining coal capacity and we are very close to blackouts.

 

Experts have worked the numbers, a few years ago they concluded we needed a x4 increase in interconnects across the whole of Europe to shift excess renewable output to regions of temporary weather related deficit and I think we needed a x3 capacity increase in wind to create a reasonable chance there was enough excess capacity somewhere to redistribute elsewhere across Europe.. 

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@epsilonGreedy

You need to research 'contract for difference', 'strike price', 'triad payments' and long term supply contracts. It is better than speculating.

It is much more than a simple supply and demand market.

 

General note. I wonder what is happening in France with there very large proportion of power coming from nuclear, and being part of the EU grid.

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3 hours ago, Ferdinand said:

I (think - this needs translating https://www.nationalgrid.com/incidents) the burnt down interconnector is about to come back on with 1GW capacity. And the Norway Interconnector comes on stream in the next month at 1.4GW.

 

 

My translation = Not content with burning down Windsor Castle, stately homes and Her Majesty's warships, contractors have now turned their attention to vital national infrastructure.

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9 minutes ago, epsilonGreedy said:

 

These just reflect the current situation where all additional wind capacity is welcome to reduce reliance on gas.

Not sure what you mean with that statement.

You will have to expand on your definition of 'current situation'.

 

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lf you look at the past year (third chart), recent levels of renewables production are low, but not excessively so (green line). Further, these should average out over time and have only a modest impact on electricity futures.

 

Looking at this increasingly suggests the real problem is the spat with Russia and lack of gas in storage across Europe. Demand remains low and fossil fuel production is well within the normal range.

 

As an aside if you look at the daily average, you can see how much lower demand is overnight. Renewables production will work well with increased use of EVs which can be used to balance out grid demand. This is why the government wants smart chargers. Most EVs do not need to be charged immediately and can be charged when there is excess supply (if you are in a hurry they could charge a premium). In 4 years I have never once needed to charge my car immediately.

 

Renewables are still only around 25% of supply and not the issue, it is the price of gas. Longer term the variability of renewable supply and demand can be modelled and the grid should cope with much more renewable capacity. Even longer term the expectation is that excess renewable capacity will be used to generation hydrogen to balance supply and demand over medium term periods. Historically I had thought hydrogen too inefficient and expensive, but it should prove viable in this scenario.

 

Anyway all I can see is that demand for electricity is if anything low, fossil fuel production is normal, renewable production has been low but is returning to normal and the real problem is over reliance on one unreliable supplier. At work we used to always say not to invest when politics are involved. You can model wind systems over time, I cannot model the actions of the Russian government!

 

 

image.thumb.png.77cd8818dfb3f76e7ba5cde0f866cf85.png

 

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That is simple, they want to dangle their toes in the Indian Ocean, that has been the same for a long time, so anything they can do to further that aim is no surprise. The question is why rely on a hostile energy partner, for some countries, maybe they have no other option, but surely we do!

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15 minutes ago, AliG said:

Even longer term the expectation is that excess renewable capacity will be used to generation hydrogen to balance supply and demand over medium term periods

I am not so sure about that.  Compressed air storage is currently the cheapest, then pumped hydro and then batteries. Hydrogen fuel (fool) cells are one of the most expensive in £/MWh.

I also think that synthetic fuels will be used in long distance transport situations i.e. trucking, aviation, shipping, military.  We have a large knowledge base with combustion technology in aviation, and turbines/turbo jets are pretty efficient when it comes to kg/km.  Changing from one liquid fuel to another is much easier than changing from liquid fuel to gaseous fuel.  That is long time off, we have plenty of sources of kerosene.  

  

15 minutes ago, AliG said:

As an aside if you look at the daily average, you can see how much lower demand is overnight.

 

Have to be careful with that, just taking a percentage of use is very misleading, over the last year many industries have been on shorter working hours and have cut night shifts.  Industry/commerce is still a large user of power.

Edited by SteamyTea
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13 minutes ago, SteamyTea said:

I am not so sure about that.  Compressed air storage is currently the cheapest, then pumped hydro and then batteries. Hydrogen fuel (fool) cells are one of the most expensive in £/MWh.

 

 

This reminds me of a West Wing episode where the White House invites all of America's green pressure groups to attend a day long symposium in order to boost the president's renewables reputation. What actually happens is the greens spend the day bickering with each other over whose green solution is the best.

 

17 minutes ago, SteamyTea said:

Compressed air storage

 

 

Is it April Fools Day already!

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