Alarming rise in electricity prices
Discussion
RazerSauber said:
I heard promises for one of the politicians saying they'd reduce tax somehow and give back £900 per year to the average household (whatever that is) but what's the use when energy costs continue to rise on a ludicrous rate? The £900 Mr & Mrs Average save will be immediately swallowed up in energy costs, and then some (of which I'm sure the Government will earn some tax on) then everything that requires gas or electric to produce (every single thing on earth) will go up. I think one radio station said that if you're paying £200/month now then you can expect to be paying £335 a month after the October & January price hikes.
As someone else said, a lot of families are going to be seriously considering whether to be fed or warm this year. A decision that should never have to be made. There's only so much jumpers and blankets on a couch can do when you're sitting in a house at -10 degrees. When a 2+2 family on the national living wage can't afford to have heat and food at the same time, something is critically wrong.
There's also a plan to cross subsidise different socio-economic groups. As someone else said, a lot of families are going to be seriously considering whether to be fed or warm this year. A decision that should never have to be made. There's only so much jumpers and blankets on a couch can do when you're sitting in a house at -10 degrees. When a 2+2 family on the national living wage can't afford to have heat and food at the same time, something is critically wrong.
So the cap will be lower for some families (presumably those receiving certain benefits) and higher for others.
At least these increases therefore won't be regressive. However, I'm fully expecting a tripling of costs come the October cap revisions, taking my bill to well over £3k by year end.
OutInTheShed said:
PBCD said:
OutInTheShed said:
I think it's the UK public who haven't got a clue, they don't do anything the rest of the world want...
Such as?Just for three months.
We need lots of stuff from abroad, they don't want much that we can offer.
I know various ship yards mentioned aren't always healthy companies but they're still there, still building. Do the governments just step in to keep it going? (i suspect there would be hell to pay if the French government let things like shipyards disappear. Like real life lynching).
coetzeeh said:
UK Wholesale electricity price for Q4 was at £412/MWh yesterday (or 41p/kwh + 10p/kwh grid/green costs)
This would suggest the up and coming consumer energy cap is till too cheap, and that even in 2023 we will see another 30%+ rise in electricity costs? So 40p/kWh domestic supply is looking likely in 2023!!DC rapid chargers are already at 50p/kWh, soon they will be at 70p??!! At which point EVs will already MORE expensive to refuel at Mway services than combustion cars, and that's without any major taxation in place.
Essentially all our personal energy consumption costs are going to go up, given the pretty obvious changes in global weather, I do wonder if its already too late anyways?
gangzoom said:
coetzeeh said:
UK Wholesale electricity price for Q4 was at £412/MWh yesterday (or 41p/kwh + 10p/kwh grid/green costs)
This would suggest the up and coming consumer energy cap is till too cheap, and that even in 2023 we will see another 30%+ rise in electricity costs? So 40p/kWh domestic supply is looking likely in 2023!!DC rapid chargers are already at 50p/kWh, soon they will be at 70p??!! At which point EVs will already MORE expensive to refuel at Mway services than combustion cars, and that's without any major taxation in place.
Essentially all our personal energy consumption costs are going to go up, given the pretty obvious changes in global weather, I do wonder if its already too late anyways?
21 July is a hugely important date as that is when we will see if gas from Russia does indeed come to Europe.
There is a risk premium built into the price now.
If flows to revert to previous levels, prices may fall back some. My concern is that if they don’t then the asymmetric moves in the market will see prices increase in large sums. A move from £450/MWh to 500/600 is not difficult to envisage. Whereas falls will be limited as Putin ,at just turn down the taps.
It’s a real s
tstorm out there and I genuinely am concerned that many folk will have to make a hard decision of food or warmth. At the extreme civil unrest will increase and more outrage towards politicians who cannot really make meaningful difference.In the pm debate yesterday it was clear that they have to real answer on how to deal with the short term energy crisis. Longer term there can be assistance but we are talking years and years away…..
The best we can do is become more energy efficient. The biggest saving is the kW of energy not used.
Industry should be focusing on this as should households.
gangzoom said:
DC rapid chargers are already at 50p/kWh, soon they will be at 70p??!! At which point EVs will already MORE expensive to refuel at Mway services than combustion cars, and that's without any major taxation in place.
With the likes of Ionity at 69p, they are likely to be over £1.20 a kWh very soon, I don't think they have adjusted their prices at all yet.The gap between Ice and BEV is closing fast, fingers crossed it doesn't last long.
Luckey I have never used Ionity yet, or any chargeable charging point tbh.
Meeten-5dulx said:
Prices for winter 22 are increasing on the concerns of gas availability.
21 July is a hugely important date as that is when we will see if gas from Russia does indeed come to Europe.
There is a risk premium built into the price now.
If flows to revert to previous levels, prices may fall back some. My concern is that if they don’t then the asymmetric moves in the market will see prices increase in large sums. A move from £450/MWh to 500/600 is not difficult to envisage. Whereas falls will be limited as Putin ,at just turn down the taps.
It’s a real ststorm out there and I genuinely am concerned that many folk will have to make a hard decision of food or warmth. At the extreme civil unrest will increase and more outrage towards politicians who cannot really make meaningful difference.
In the pm debate yesterday it was clear that they have to real answer on how to deal with the short term energy crisis. Longer term there can be assistance but we are talking years and years away…..
The best we can do is become more energy efficient. The biggest saving is the kW of energy not used.
Industry should be focusing on this as should households.
This is a very troubling post.21 July is a hugely important date as that is when we will see if gas from Russia does indeed come to Europe.
There is a risk premium built into the price now.
If flows to revert to previous levels, prices may fall back some. My concern is that if they don’t then the asymmetric moves in the market will see prices increase in large sums. A move from £450/MWh to 500/600 is not difficult to envisage. Whereas falls will be limited as Putin ,at just turn down the taps.
It’s a real s
tstorm out there and I genuinely am concerned that many folk will have to make a hard decision of food or warmth. At the extreme civil unrest will increase and more outrage towards politicians who cannot really make meaningful difference.In the pm debate yesterday it was clear that they have to real answer on how to deal with the short term energy crisis. Longer term there can be assistance but we are talking years and years away…..
The best we can do is become more energy efficient. The biggest saving is the kW of energy not used.
Industry should be focusing on this as should households.
If I may suggest - we could always reopen the coal mines. Since energy is about to become unimaginably expensive, we need to do the unimaginable. What a massive shame it is that we have destroyed so many cooling towers..
TheRainMaker said:
With the likes of Ionity at 69p, they are likely to be over £1.20 a kWh very soon, I don't think they have adjusted their prices at all yet.
The gap between Ice and BEV is closing fast, fingers crossed it doesn't last long.
Luckey I have never used Ionity yet, or any chargeable charging point tbh.
But for the typical EV user who only uses motorway charging points on long journeys half a dozen times a year, the price they pay then is not very significant. If you drive to the Lake District and have to put £60 in on the way, no big deal.The gap between Ice and BEV is closing fast, fingers crossed it doesn't last long.
Luckey I have never used Ionity yet, or any chargeable charging point tbh.
Meeten-5dulx said:
Prices for winter 22 are increasing on the concerns of gas availability.
21 July is a hugely important date as that is when we will see if gas from Russia does indeed come to Europe.
There is a risk premium built into the price now.
If flows to revert to previous levels, prices may fall back some. My concern is that if they don’t then the asymmetric moves in the market will see prices increase in large sums. A move from £450/MWh to 500/600 is not difficult to envisage. Whereas falls will be limited as Putin ,at just turn down the taps.
It’s a real ststorm out there and I genuinely am concerned that many folk will have to make a hard decision of food or warmth. At the extreme civil unrest will increase and more outrage towards politicians who cannot really make meaningful difference.
In the pm debate yesterday it was clear that they have to real answer on how to deal with the short term energy crisis. Longer term there can be assistance but we are talking years and years away…..
The best we can do is become more energy efficient. The biggest saving is the kW of energy not used.
Industry should be focusing on this as should households.
Industry focused on that and went to China where electricity was half the UK price, between 1990 and 2010.21 July is a hugely important date as that is when we will see if gas from Russia does indeed come to Europe.
There is a risk premium built into the price now.
If flows to revert to previous levels, prices may fall back some. My concern is that if they don’t then the asymmetric moves in the market will see prices increase in large sums. A move from £450/MWh to 500/600 is not difficult to envisage. Whereas falls will be limited as Putin ,at just turn down the taps.
It’s a real s
tstorm out there and I genuinely am concerned that many folk will have to make a hard decision of food or warmth. At the extreme civil unrest will increase and more outrage towards politicians who cannot really make meaningful difference.In the pm debate yesterday it was clear that they have to real answer on how to deal with the short term energy crisis. Longer term there can be assistance but we are talking years and years away…..
The best we can do is become more energy efficient. The biggest saving is the kW of energy not used.
Industry should be focusing on this as should households.
Some people may not have noticed.
I don't know what a factory in China pays for their coal-based electricity now?
MrHappy said:
I’m surprised not to hear talk of a sliding scale for domestic electricity pricing, particularly for peak usage. The highest users effectively subsidising the lowest users.
Seeing more EV6’s on the road now, end of September delivery for ours - hopefully!
I think in France the 'standard tariff' is tiered so low users pay the lowest per kW.Seeing more EV6’s on the road now, end of September delivery for ours - hopefully!
There's no reason to subsidise people who can afford Teslas or hot tubs.
OutInTheShed said:
MrHappy said:
I’m surprised not to hear talk of a sliding scale for domestic electricity pricing, particularly for peak usage. The highest users effectively subsidising the lowest users.
Seeing more EV6’s on the road now, end of September delivery for ours - hopefully!
I think in France the 'standard tariff' is tiered so low users pay the lowest per kW.Seeing more EV6’s on the road now, end of September delivery for ours - hopefully!
There's no reason to subsidise people who can afford Teslas or hot tubs.
modeller said:
OutInTheShed said:
I think in France the 'standard tariff' is tiered so low users pay the lowest per kW.
There's no reason to subsidise people who can afford Teslas or hot tubs.
Not going to happen unless they separately meter heat pumps (which they won't )There's no reason to subsidise people who can afford Teslas or hot tubs.
A lot of new HA building going on, with heat pumps. These buildings should be well insulated, but it will be interesting to see how it pans out in a cold winter.
Technically, it would not be hard to record heat pump use and bill that differently.
Gary C said:
Not every generator operates in the markets in the same way. Most of our power was sold on the forward market at an agreed price so the 1/2 price makes no difference unless we have a shortfall and need to buy from the spot market to meet the contracts. Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what.
Base load generators such as the Nuclear stations were in the habit of selling portions of expected generation each year so on the three year ahead market we had about 80% sold, going down to ?20% on the year ahead (Need Condi to chip in on this)
The spot market & day ahead market is a balancing mechanism in itself, too little generation, attracts higher prices, incentivises generators to put higher cost assets on the bars, which is all well and good as long as those high cost dispatchable assets exist. Coal used to operate in that market, taking high day ahead & spot prices. Gas would like too but its basically become base load and price setting, so without the capacity to bring in more, dispatchable but a bit more expensive generation, day ahead and spot prices spiral upwards from a high gas driven price set.
This also has the worrying effect if a company that has forward sold its generation, has a big unit trip then the lost generation has to be bought from the market at possibly ruinous prices to replace the load already sold at £50/MWhr.
Of course, high prices should also attract investment in generation.
The little 'power companies' that setup with a few laptops in a cheap office, found that they could operate in the fluctuating market, making deals and selling cheaper electricity as the generators had to hedge against large losses. This was all fine until these little companies that never generated a watt of electricity found the market moving away from them, making their business model outdated.
A truly tangled web.
Thanks for the insight - tangled indeed!Base load generators such as the Nuclear stations were in the habit of selling portions of expected generation each year so on the three year ahead market we had about 80% sold, going down to ?20% on the year ahead (Need Condi to chip in on this)
The spot market & day ahead market is a balancing mechanism in itself, too little generation, attracts higher prices, incentivises generators to put higher cost assets on the bars, which is all well and good as long as those high cost dispatchable assets exist. Coal used to operate in that market, taking high day ahead & spot prices. Gas would like too but its basically become base load and price setting, so without the capacity to bring in more, dispatchable but a bit more expensive generation, day ahead and spot prices spiral upwards from a high gas driven price set.
This also has the worrying effect if a company that has forward sold its generation, has a big unit trip then the lost generation has to be bought from the market at possibly ruinous prices to replace the load already sold at £50/MWhr.
Of course, high prices should also attract investment in generation.
The little 'power companies' that setup with a few laptops in a cheap office, found that they could operate in the fluctuating market, making deals and selling cheaper electricity as the generators had to hedge against large losses. This was all fine until these little companies that never generated a watt of electricity found the market moving away from them, making their business model outdated.
A truly tangled web.
There's one point where, aiui, things are not quite as you said: "Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what."
Nearly all onshore wind and over half of offshore are covered by the old ROC (Renewable Obligation Certificate) system where producers are paid the market price of power plus they are awarded ROCs: 1 ROC per MWh for onshore wind with offshore wind receiving 1.5 - 2 ROCs/MWh. A ROC is presently worth about £50.
So all of the ROC-based producers are paid between £50 and £100 per MWh on top of the market price, depending on the nature of production.
A further wrinkle: some of the latest offshore projects have declined/postponed their CfD contracts because they can earn far more selling at market price. Apparently they can choose to do this for up to 3 years.
Gary C said:
Not every generator operates in the markets in the same way. Most of our power was sold on the forward market at an agreed price so the 1/2 price makes no difference unless we have a shortfall and need to buy from the spot market to meet the contracts. Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what.
Base load generators such as the Nuclear stations were in the habit of selling portions of expected generation each year so on the three year ahead market we had about 80% sold, going down to ?20% on the year ahead (Need Condi to chip in on this)
The spot market & day ahead market is a balancing mechanism in itself, too little generation, attracts higher prices, incentivises generators to put higher cost assets on the bars, which is all well and good as long as those high cost dispatchable assets exist. Coal used to operate in that market, taking high day ahead & spot prices. Gas would like too but its basically become base load and price setting, so without the capacity to bring in more, dispatchable but a bit more expensive generation, day ahead and spot prices spiral upwards from a high gas driven price set.
This also has the worrying effect if a company that has forward sold its generation, has a big unit trip then the lost generation has to be bought from the market at possibly ruinous prices to replace the load already sold at £50/MWhr.
Of course, high prices should also attract investment in generation.
The little 'power companies' that setup with a few laptops in a cheap office, found that they could operate in the fluctuating market, making deals and selling cheaper electricity as the generators had to hedge against large losses. This was all fine until these little companies that never generated a watt of electricity found the market moving away from them, making their business model outdated.
A truly tangled web.
So if most power was sold/purchased on the forward market, why has Everyone's electricity cost increased by these vast percentages?Base load generators such as the Nuclear stations were in the habit of selling portions of expected generation each year so on the three year ahead market we had about 80% sold, going down to ?20% on the year ahead (Need Condi to chip in on this)
The spot market & day ahead market is a balancing mechanism in itself, too little generation, attracts higher prices, incentivises generators to put higher cost assets on the bars, which is all well and good as long as those high cost dispatchable assets exist. Coal used to operate in that market, taking high day ahead & spot prices. Gas would like too but its basically become base load and price setting, so without the capacity to bring in more, dispatchable but a bit more expensive generation, day ahead and spot prices spiral upwards from a high gas driven price set.
This also has the worrying effect if a company that has forward sold its generation, has a big unit trip then the lost generation has to be bought from the market at possibly ruinous prices to replace the load already sold at £50/MWhr.
Of course, high prices should also attract investment in generation.
The little 'power companies' that setup with a few laptops in a cheap office, found that they could operate in the fluctuating market, making deals and selling cheaper electricity as the generators had to hedge against large losses. This was all fine until these little companies that never generated a watt of electricity found the market moving away from them, making their business model outdated.
A truly tangled web.
lost in espace said:
Where is the massive increase in revenue going? Can anyone tell me? Someone must end up with it in their pocket!
Gas is being bought.Some is being bought at spot market prices today, some is being bought at forward prices for the Autumn, next year etc.
Some of the revenue is probably paying for gas that was more expensive than predicted since the price started going up last year.
Obviously the market is complicated with forward contracts and intervention with renewables etc, but fundamentally, gas costs a lot more and the electricity price is affected by the gas price.
A slice of the money obviously goes to the oil companies who drill for the gas, but that can be offset by them losing billions on projects in Russia
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