Where is the kWh price heading in 2022?

[Ferdinand]

4 hours ago, pocster said:

Let people export for 50p kw/Kw/kW/kWh/KWH/kwH/etc. 😁👍

 

@tommy12398 posted his payment rates on another thread:

 

[Cpd]

I live a pretty basic lifestyle (by choice) and as a self employed person I only turn over about £20-22k a year my outgoings are fairly high as I support 2 kids 50% of the time as well as feeding and housing 2 other adults for 6 month of the year, I run an Airbnb so have all the overheads associated with this. Most years I can save about 4-5k which goes mostly on building materials and repairs and maintenance. 

I am working towards getting another building finished so that I can rent it out and boost my income by 10-15k but it’s still a year or two from being done. In the past it’s all gone well but this year my bank balance is pretty thread bare……. The general price rises have squeezed my margins to nothing and I am eating into what little savings I have, it’s pretty unsettling with the electric price increases that may come as between the various buildings I have and the Airbnb my current electric cost  is £300 per month. I have upgraded the insulation in my house walls and ceiling which has made a significant difference to comfort but still need to replace the 4 windows which are totally shite….  No insulation in the floor and not easily done at this time. The immersion is virtually never put on. Not quite sure where I will make the financial cuts to cover the ever increasing cost of living but I am sure I will come up with something 😁

[Ferdinand]

15 hours ago, ProDave said:

I heard a snippet on the radio news on the way home this afternoon that someone is now predicting the price cap for the typical house is now likely to be £6000

 

Why do I get the feeling we are going through some manipulation, with ever increasing unbelievable price rise estimates, to butter us up to accept the actual rise as "phew is that all"?

 

I think some of that is quite likely, but I'm more inclined to blame the two-planks media for wanting headlines to nail their readers.

 

I don't think 6k will happen for two reasons - firstly it is politically impossible, and secondly we will all significantly reduce our usage.

 

ISTM that what we need is predictable limited prices, some storage for insurance (which we should get now - looks like 5-6 weeks of 100% of consumption, or pro rata), some financial support and an incentive to use less.

 

We may also need some wartime style redefinition of the market, which is where a neo-Thatcherite Govt may struggle.

 

The EU think that they can reduce usage by 15%; I see no reason why we can't do the same. Looking at it, Mr Starmer's is trailed as 'freezing your bills', which presumably makes it free (or something similar) once I have spent £N on gas. A freeze on price would be better, as that incentivises reduced usage. But to be fair, the press release and media reporting is a confused word-salad. And hasn't really identified how he is going to pay for nearly half of it ("inflation will go down and that will save £7bn on Govt interest payments" is a little vague.)

 

I agree that LT seems to be doing a butt-sit-like-Boris thing until she makes PM, which is horribly inadequate and is hugely damaging to the Govt politically, as the goal is wide open and they are arguing like deckchair attendants on the Titanic.

 

One small chink of light is that LT is not lazy like BoJo, and will analyse carefully then make an intervention.

 

Ferdinand

[Ferdinand]

14 minutes ago, Cpd said:

I live a pretty basic lifestyle (by choice) and as a self employed person I only turn over about £20-22k a year my outgoings are fairly high as I support 2 kids 50% of the time as well as feeding and housing 2 other adults for 6 month of the year, I run an Airbnb so have all the overheads associated with this. Most years I can save about 4-5k which goes mostly on building materials and repairs and maintenance. 

I am working towards getting another building finished so that I can rent it out and boost my income by 10-15k but it’s still a year or two from being done. In the past it’s all gone well but this year my bank balance is pretty thread bare……. The general price rises have squeezed my margins to nothing and I am eating into what little savings I have, it’s pretty unsettling with the electric price increases that may come as between the various buildings I have and the Airbnb my current electric cost  is £300 per month. I have upgraded the insulation in my house walls and ceiling which has made a significant difference to comfort but still need to replace the 4 windows which are totally shite….  No insulation in the floor and not easily done at this time. The immersion is virtually never put on. Not quite sure where I will make the financial cuts to cover the ever increasing cost of living but I am sure I will come up with something 😁

 

I don't want to teach you to suck eggs, but have you considered a lodger for one room - where the first 8k (?) of income is completely tax free?

[Pocster]

32 minutes ago, Ferdinand said:

 

@tommy12398 posted his payment rates on another thread:

 

Agile I guess ?

[MikeSharp01]

How far in advance does one get the tarrif from Octapus? 

[Ferdinand]

12 minutes ago, MikeSharp01 said:

How far in advance does one get the tarrif from Octapus? 

 

It works on one day ahead wholesale prices, with a couple of adjustments:

 

From the FAQ:

 

Quote

The Agile-like Outgoing payment is calculated from the day-ahead wholesale prices, Balancing Services Use of System (BSUoS), Generator Distribution Use of System (GDUoS) and Transmission Network Use Of System (TNUoS) per UK region.

The formal calculation is: 

 

Agile Export rate = M * APX + B + C

 

Where: M is a multiplier to include line losses, imbalance, trading charges, Octopus margin

APX is the APX day-ahead 30-minute wholesale price converted to p/kWh

B is the time of day independent benefits and is based on BSUoS and GDUoS

C is the time of day dependent (peak) benefits and is based on TNUoS.  (C only applies from 4-7pm)

FAQ linky: https://octopus.energy/blog/outgoing/

 

I hope that is what you were after.

 

Ferdinand

 

[SteamyTea]

1 hour ago, Ferdinand said:

and an incentive to use less.

Totally and unnecessary, the current higher prices is enough.

Sometimes the stick is much better than the carrot. 

[SteamyTea]

1 hour ago, Ferdinand said:

One small chink of light is that LT is not lazy like BoJo, and will analyse carefully then make an intervention.

And then get it wrong.

 

 

 

Edited August 21, 2022 by SteamyTea

[Radian]

Just now, SteamyTea said:

And then get it wrong.

 

Beat me to it!

 

[Ferdinand]

20 minutes ago, SteamyTea said:

And then get it wrong.

 

 

That's a concern for me, but we'll see what happens.

 

23 minutes ago, SteamyTea said:

Totally and unnecessary, the current higher prices is enough.

Sometimes the stick is much better than the carrot. 

 

Do you mean the April price, or the impending further increased prices?

 

Depending on what Mr Starmer's proposals mean, it could take that incentive away once electricity used reaches £1971 - which is why I was complaining about the detail.

 

https://labour.org.uk/press/keir-starmer-sets-out-labours-plan-to-address-the-tory-cost-of-living-crisis/

 

Stopping energy bills from rising is a fully-funded measure, with a total cost of £29bn. That will cover:

 

- a freeze in energy bills for all domestic energy customers
support for customers not protected by the price cap
- making sure the price people on prepayments meters pay for energy is the same as people who pay their bills monthly.
- Stopping energy bills from rising is a fully-funded measure.

 

I hope the concept is a freeze on the unit price. I expect that LT will steal quite a lot of that policy.

 

F

 

[Temp]

As far as I can see the Labour proposal only delays rises until April. That would help a lot but what happens in April?

[Kelvin]

1 hour ago, SteamyTea said:

Totally and unnecessary, the current higher prices is enough.

Sometimes the stick is much better than the carrot. 

This only works for the folk that use a lot more than the base level they need for heating and cooking. Come the winter we are going to have a whole load of people that will have to make decisions you’d never have expected that folk would need to make. 

[SteamyTea]

17 minutes ago, Kelvin said:

This only works for the folk that use a lot more than the base level they need for heating and cooking. Come the winter we are going to have a whole load of people that will have to make decisions you’d never have expected that folk would need to make. 

Been there, done it, got the T-Shirt.

A price shock really brings the point home.

The main problem is that many people will blame externalities i.e. VAT, Green Taxes, overseas war, but make no attempt to actually change anything that they have some control over.

An old girlfriend of mine runs a 2 kW fan heater all day in her living room, which is a good 1/3^rd of the area of her house.  She has gas central heating, TRV on all the radiators, but has convinced herself that it costs more to turn the central heating on.

Her BiL is a plumber and gas fitter, she has worked with him, on and off, for many years.

In her mind, the problem is the housing association, not her choices.

She is (expletive deleted)ing mental though.

Edited August 21, 2022 by SteamyTea

[joe90]

https://www.bbc.co.uk/news/uk-scotland-scotland-politics-62623751

[Radian]

7 minutes ago, joe90 said:

https://www.bbc.co.uk/news/uk-scotland-scotland-politics-62623751

And have the government use our taxes to buy out the shareholders? If they didn't come up with a fair price you can wave goodbye to what little wealth this nation might be expected to create in the future. If they did pay a fair price, then as taxpayers we'd probably be worse off overall.

[AliG]

To state the obvious this is a very difficult problem.

 

Russia was almost 40% of European gas supply. As they have cut supply by 80%, then we are short around 30% of previous supply. Note that as the price has risen around 10x then they will be making twice as much money at current levels of supply as before. This might actually suggest that even if the war ended they could just restrict supply indefinitely, although it is hard to say how much of the current price includes an certainty factor due to Ukraine and the unpredictability of Russia.

 

The SNP plan had me looking at how gas sufficient the UK is. It appears as if the UK produces around 66% of the gas it uses (quick Google so may be wrong). So nationalising our energy companies would be entirely pointless as we would still have to import lots of gas. This kind of nonsense would even more destroy the gas markets and drive prices further up.

 

The £6000 number being bandied about just does what I mentioned the other day, which is take the latest spot price and project it out forever. As the spot price can move dramatic amounts in a few days this has almost zero value as a prediction.

 

So what to do?

 

Basically Europe needs to get the market as close to back in balance as possible. i.e. they need a combination of supply increases and usage reduction that offset the 30% reduction in supply.

 

It looks as if the increase in LNG imports is equivalent to between 10 and 15% of EU demand. Of course this also requires increased gas supply outside the EU and has driven up prices in the US. But assume that other countries can cover this extra supply.

 

Then this would suggest that Europe needs to increase supply/reduce demand by around 20%. At this point the loss of Russian gas will be irrelevant. Prices would still no doubt be higher, but not anywhere near as high.

 

It takes a long time to bring on gas supply, we can probably only increase it by a few percent a year.

 

This suggests that the 15% reduction in demand being bandied about is maybe correct. As someone said though, how much gas is wasted?

 

I think you do need prices to go up quite a lot to encourage people to reduce consumption, but £3000 is probably the price where there is enough pain to do that.

 

The problem is though that as a very high percentage of gas is used for space and water heating as well as electricity production, people cannot alter consumption of these that quickly. We cannot insulate every house in the country in a few months.

 

Reading Facebook utility user groups suggests that a lot of people, unlike on here, just don't understand enough about the workings of their heating system and use of energy to maximise efficiency (e.g. people who worry about phone chargers being plugged in, which uses a laughably negligible amount of electricity)

 

Still it does give me hope that over a couple of years we could pretty much wean Europe off Russian gas through a combination of LNG imports, supply increases and demand reduction including more renewables to make electricity. It will be painful until we get there. One of the best policies might be to educate people about energy use and how to save it (frankly I sometimes think we need to send someone door to door to explain to people how to reduce energy use)

 

Now all we need is a plan to do this and a politician willing to actually give people a straightforward explanation of what is happening.

 

If the gas markets were convinced this was going to happen, gas prices would also start to fall. They don't want to buy up gas futures to find no buyers n a couple of years.

 

Out the other side of this, it will have accelerated energy efficiency and the move to renewables but it is hard to see those benefits sitting on the precipice as we are now. This is the danger of allowing a massive short term increase in prices. People will find a way around using your product.

[AliG]

Maybe worth pointing out that the sad thing so often in these instances is that the people worst affected are also the people least able to do anything about it.

 

I can afford the increase in prices and I also think I know enough about what’s going on to minimise my consumption. Still showing how tough this is, I reckon since the house was built I have reduced my consumption of gas and electricity by around 6 or 7% as I optimised the systems and maybe could get gas consumption down the same amount again by finding the weak spots in my insulation or air tightness. But that’s it.

 

Many people are putting in solar panels at the moment, to reduce electricity consumption. 
 

But I am sure there are many older people, single parents etc who either don’t understand what is going on and what they need to do to cut their costs or don’t have the money or ability to do things such as put in solar panels or improve their insulation.

 

I don’t actually think sending people out to help explain what people could do to reduce consumption would be a bad idea. Maybe another thing they need to teach at school.

[SteamyTea]

1 hour ago, AliG said:

Maybe another thing they need to teach at school.

It is.

Posted up some science GCSE papers a while back, was quite a lot of relevant questions in it.

[Ferdinand]

5 hours ago, joe90 said:

https://www.bbc.co.uk/news/uk-scotland-scotland-politics-62623751

 

Has she explained why she thinks it will make a difference?

[Ferdinand]

Report from the Beeboids.

 

National Grid looking at a scheme where you get a rebate for not using peak energy:

https://www.bbc.co.uk/news/business-62626908

 

Quote

It looks as if the increase in LNG imports is equivalent to between 10 and 15% of EU demand. Of course this also requires increased gas supply outside the EU and has driven up prices in the US. But assume that other countries can cover this extra supply.

 

Then this would suggest that Europe needs to increase supply/reduce demand by around 20%. At this point the loss of Russian gas will be irrelevant. Prices would still no doubt be higher, but not anywhere near as high.

 

I think that might turn out to be achievable more quickly than we think.

 

British Gas has noticeably taken out substantial short term (next couple of winters) and long term (15 year iirc) contracts for supply of gas from the USA and Norway. Have these been mentioned here?

 

(1 million tonnes a year for 15 years)

https://www.reuters.com/business/energy/britains-centrica-signs-lng-deal-with-delfin-midstream-2022-08-09/

 

(1 billion cubic metres = 4.5 million homes next 3 years)

https://www.reuters.com/business/energy/centrica-signs-deal-with-equinor-additional-winter-gas-supplies-2022-06-16/

 

Small % of market, perhaps, but a straw in the wind maybe.

 

F

[kommando]

On 20/08/2022 at 19:11, Roger440 said:

 

Just filled my oil tank.

 

Its a crazy world when heating with oil is substantially cheaper than heating with gas.

 

One wonders at what point its cheaper to fire up my generator and connect to a set of batteries, than buying from the grid? Might be there already for non domestic?

German companies have already made the calculation for the Winter and together with the security of oil tanks full with oil on site will be using diesel generators instead of the grid. But for each 10 Kwh in a litre you do not get 10 Kwh but a lot less say 4 Kwh so that needs to be factored into the calc. 

[SteamyTea]

6 minutes ago, kommando said:

Kwh

Kelvin x angular frequency x hour

 

[AliG]

The gas price went up another 60p yesterday leading to even higher predictions this morning.

 

Yesterday's increase is of course more than the price of gas in totality for most of the last few years. The 16% increase sounds a lot less bad than 150% of the "normal" price.

 

Apparently the increase is caused by Russia planning to close Nordstream 1 for 3 days.

 

I really do think someone has to explain to politicians that the more they say that governments will cover any increase in the cost of gas the more the price will actually rise. You are getting a hyper inflationary effect where the expectation is that governments will just print money to cover the cost of gas. This probably also explains the massive weakness of the Euro and GBP against the US Dollar. The Euro is even weaker than the Pound. Both have depreciated over 15% in the last year.

 

Arguably we are at about as bad as it can get if the market is pricing in no Russian supply at all. Russia has to sell some gas to profit from the increase in price. 10-20% of capacity is probably as low as they can go.

[SimonD]

12 minutes ago, AliG said:

I really do think someone has to explain to politicians

 

I wonder whether there is more to add to this list. I'd include an explanation to politicians that they could actually get together and engage in a global collaborative approach to pricing and payment. But alas it's currently each to their own. Then again, our government couldn't possibly engage in collaboration as they'd fear it was just another attack on their imagined sovereignty.

 

All that will happen if they cover the gas prices is the world's greatest state value extraction which does nothing to address the fundamental energy system flaws, rather perpetuates them and will leave the majority much the worse off.

 

All the current discussion is at the wrong level which won't solve a thing.