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In 2021, Germany got 55% of it's gas from Russia, France 17% and UK 4%.
This year German energy prices have gone up by 23%, France 4% and the UK 215%!
I read this in the comments section of The Guardian, so can anyone confirm these accuracy of these figures before I go on a rampage?
Ta
And why has the standing charge increased so much?
You do realise that the French government owns the energy suppliers and therefore has control, but all they did was turn it into government debt which the population will still have to pay. It looked good on face value as there was a Presidential election.
To both posts above - plenty of information available online.
Interesting that Prof Dieter Helm, probably the UK's leading expert on energy, is rarely in/on the media; he has been openly critical of governments' - not just this one - lack of energy policy and inability to think big and strategically.
That may answer my own question.
Its probably about right- but as of this exact moment in time prices have 'only' gone up by around 100% compared to a year ago, its from october where they will be around 200% higher (than approx a year ago).
This article here explains the french situation quite well - TLDR - the french govt are subsidising french consumers, our govt could choose to do the same, but hasnt - so far.
https://news.sky.com/story/france-has-capped-energy-price-rises-at-4-could-uk-do-the-same-12675068.
The other thing to bear in mind, is that while a headline figure of "german gas prices only increase by 55% whilst UK prices increase by 215%" looks good as a headline, when you look at the absolute prices, you find that they are pretty similar to what we will be paying.
picking one example :-
germany gas price per KWH = 18.3 cents per KWH
uk gas price per KWH (after the increase in october) = ~14p per kwh
roughly the same absolute cost........
Source : https://www.reuters.com/business/energy/germanys-rheinenergie-double-gas-prices-october-2022-08-01/
last time i looked/googled
The UK energy market due to privitisation and its subsequent sell off to overseas investment firms/govenrments, have limited control over pricing and owners who are comfortable with exploiting a foreign market, to subsidise their own. EDF (france) eon (germany) for example
france is nuclear, 70% of energy is nuclear, with infrastructure this is very cheap energy, the french government owned 30%, now circa 85% of EDF
the uk is 9% nuclear, a high proportion of our electricity is created by burning gas, gas that is bought on global markets at prices which have been extremely high and extremely volatile.
the uk is building a nuclear plant by 2048, although the japanese and french will own/manage it.
germany have storage capacity for gas, they are now circa 85% full, they have paid high prices to fill. gas prices have fallen back a little. the UK decided to reduce storage capacity.
i'd say if its gonna be a cold winter and the utilities havent hedged to cover all its customer needs, then we are all doomed..
i dont mind paying a standard charge, after all the infrastructure is expensive and needs maintenance and upgrades, the problem is the SC now includes 'supplier of last resort' levys so we are effectively paying for failure/expected failure, whilst the fat cats continue to take their £m salaries and bonusses
France in an outlier in that they get most of their energy as electricity from their own fleet of nuclear reactors. They are nationalising EDF (already majority owned by the state), to fully control pricing.
The UK is also an outlier in it's use of gas for both domestic heating and electricity generation. So, is much more susceptible to changes in the price of gas.
And why has the standing charge increased so much?
Because it no longer has anything to do with the cost of delivery. It used to have to, but Ofgem relaxed that rule, so the suppliers can choose how they split your bill between energy unit cost and standing charge.
germany gas price per KWH = 18.3 cents per KWH
uk gas price per KWH (after the increase in october) = ~14p per kwhroughly the same absolute cost……..
However, German average salary is currently around 57,000 Euros and their housing and transport costs are often significantly less.
According to this housinganywhere.com
Assuming that you're a young starter moving to Berlin, your average living costs will be as follows:
Rent (studio) €900
Public transport €86
Food €250
Entertainment €150
Total
living expenses €1,386
This means that you need to earn just above the minimum wage to live comfortably in Berlin.
Whilst earning the average net salary of €2,500 would mean that you could set aside roughly €1,000/ month or afford a bigger flat in one of the best neighbourhoods.
Not sure you could pull off living comfortably in a Northern UK city on minimum wage, let alone in the Capital.
but all they did was turn it into government debt which the population will still have to pay.
Explain please*. How does a population 'pay back' government debt? I've never been asked to repay any of the UK govts debts. Does France work differently?
*Or does this just need another Richard Murphy tweet to explain how govt finances work (TBF in France it's complicated by their membership of the euro but I suspect it's roughly the same as the UK).
How does a population ‘pay back’ government debt? I’ve never been asked to repay any of the UK govts debts.
Your taxes pay the interest on the bonds in the short term and longer term your taxes pay down the capital - although currently we're just refinancing the gilts when they expire and national debt is just increasing.
It works the same way in that you've never been specifically asked to pay for schools, or hospitals or the army - all comes out of general taxation.
Current forecast for next year is £83 billion will be spent paying interest on government debt from our taxes.
https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/debt-interest-central-government-net/
In 2021, Germany got 55% of it’s gas from Russia, France 17% and UK 4%.
Also, where the gas comes from makes zero difference to the cost. Its a traded commodity and we pay the same for Russian gas as we do North Sea
Your taxes pay the interest on the bonds in the short term and longer term your taxes pay down the capital – although currently we’re just refinancing the gilts when they expire and national debt is just increasing.
I was being slightly facetious. The national debt never gets 'paid back', as you say it just gets refinanced in perpetuity, so the statement that the population has to pay back govt borrowing is wrong. In relation to energy prices, the govt could do the same as the French have and cap energy prices and we'd all be better off in both the short and long term. The only reason they don't is because of a political choice driven by free market ideology.
France in an outlier in that they get most of their energy as electricity from their own fleet of nuclear reactors. They are nationalising EDF (already majority owned by the state), to fully control pricing.
It’s an outlier for other reasons:
According to Statista.com EDF who will soon be wholly owned by the French government are the biggest wholesale producer of energy in the UK with a market share of 21%.
Also:
“In 2021, France exported 19.7 terawatt hours of electricity to the United Kingdom. On the other hand, the the country also imported 5.8 terawatt hours of electricity from the UK.”
So does this mean that the UK consumer is now effectively subsidising the French consumer’s energy consumption?
“In 2021, France exported 19.7 terawatt hours of electricity to the United Kingdom. On the other hand, the the country also imported 5.8 terawatt hours of electricity from the UK.”
Normally it's a net exporter as you can't switch Nuclear on/off very quickly so they are keen to export any surplus to neighbouring countries outside of their busy hours. However, they've recently discovered problems with their stainless steel containment vessels and as their entire fleet is pretty much the same design, built around the same period, they have something like 50% offline right now for maintenance, so this year they have been importing a lot from the UK.
I suspect the interconnect rates per MWh are not the same as market rates - but some one here might have more info...
This doesn't help. Poorly written CFD contracts give windfarms a guaranteed price. A price they bid for on the understanding it was enough for them to make a profit. However the way the contracts were written means that if as now the market price is higher they can delay activating the contract.
Just one wimdfarm - Hornsea 2 will get an extra billion quid from UK consumers (depending on wind levels) between now and April 2024 when it plans to take uip the CFD option. No new wind farms coming on stream , Moray East for example are taking their CFD price but are instead taking high market prices.
Can't blame them. They are profit making companies but they can do it because the contract with the UK taxpayer/consumer allows it.
A windfall tax for wind farms?
However, German average salary is currently around 57,000 Euros and their housing and transport costs are often significantly less.
Different tax systems etc. What is the take home pay for both UK and German average wage?
Your taxes pay the interest on the bonds in the short term and longer term your taxes pay down the capital – although currently we’re just refinancing the gilts when they expire and national debt is just increasing.
It works the same way in that you’ve never been specifically asked to pay for schools, or hospitals or the army – all comes out of general taxation.
Lol. Not they don't.
Taxes are used to delete currency from circulation.
If the money comes out of taxation for government to spend where did you get your money from to pay your taxes?
Do you know how much of the UK national 'debt' has been ever paid back - top of my head around 46billion. The 'debt' is nothing more than a running total of new government money spent into the economy and matched by bonds issuance.
Evidenced by the fact that if we ever create a surplus (maybe happened 7 times in the last 40 years lol - you usually get a recession or slowing of the economy as you've drained money out of the private sector.)
The national 'debt' is not a problem for a currency issuing government. It serves a purpose of matching deficit spending the government makes by draining the private sector of reserves to help stabilise interest rates when new money enters the economy. It also gives a safe place for the private sector to store money. Premium bonds and NS&I form part of the national debt too.
The government spending takes place first - the bonds are issued after the overdraft at the BoE has been cleared.
But it doesn't use taxation to spend.
The Euro-zone is slightly different as the individual countries don't have monetary sovereignty but as I understand it the ECB has been delivering various financing programmes that achieve the same sort of support.
And also everything else Dazh has put is on the money - literally.
Current forecast for next year is £83 billion will be spent paying interest on government debt from our taxes.
Interesting the OBR have come to that conclusion when inflation is at 10% which tends to swing the effective interest rate on government 'debt' in the other direction.
The OBR are full of shit.
Different tax systems etc. What is the take home pay for both UK and German average wage?
I honestly have no idea and suspect googling it won't help me much. The article I quoted from was interesting to me though with the suggestion that you could live quite well in Berlin at just over the minimum wage whilst I suspect you would struggle to do that in London.
I have a theory that this is the sort of thing that explains the productivity differences in France and UK.
None of my French neighbours are having conniptions about energy prices (and or indeed any of the things about France that ‘just work’). They get on with working (contributing to economy) and when they’re not working they are also contributing to economy by drinking wine and eating cheese. Productivity is high because they have got the foundations from which to do their jobs - transport, childcare, reasonable cost of living, decent safety net and health care.
Back to UK, my one member of staff is barely managing a few of hours of work a week due to childcare issues. Everyone is worrying about the cost of living. No one can get to work because public transport is rubbish, everyone drives and snarls up everyone else in congestion. Small businesses are shuttering because their energy bills have gone through the roof. No one can get any work done!
Obviously the big paradox in France is that everyone complains and sometimes riots but the general efficacy that this has created is way superior to just putting up with the latest load of merd.