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I have a vague idea about how our uk energy prices work. Something to do with gas prices setting the electricity price.
I keep seeing articles on how gas prices are now back down to pre Feb 22 levels in Europe.
Couple that with the fact that the cost of most electricity generation is way cheaper anyway, why is nobody actually sorting the structure of our market and why is the dropping gas price not reflected in the market?
fear of volatility? dropping the price and letting people get fixed rates on that, only for another spike in gas prices from Mad Mad GasPutin and the energy company goes deep into the red.
Suppliers will have locked in higher forward prices to secure supply so they are stuck with them. The fact they have done this will also be one of the reason prices are coming done as there is less demand.
The whole market structure should be under review.
Think of it like the fuel in your car.
You fill up @ £1.80/l, but then go away from a few weeks on holiday, come back and the price has dropped to £1.60. You can't go back to the garage and get a 20p/l refund.
Same with gas (and electricity).
We've spent all summer filling up gas reserves to see us through the winter (and so far this winter has been really mild) so there's been paying high prices and now at the moment demand is relatively low so the price has dropped.
Couple that with suppliers have to buy those supplies months in advance, so will have been paying for this months gas back in the summer as what they expected the price to be (high). That's now fixed. And any excess they don't sell on they have to sell back on the market at the current price (which is low), so they're making a loss there too.
On the flip side, the price of gas to consumers is capped, so whether it goes up or down now wont affect you at all, just the government. If it doubles now you won't know, if it halves from that double, you still wouldn't know. It'll only affect your bills if it drops below the cap price and companies start competing with each other again.
My gas has gone down, it’s currently 3.6p/kWh down from 6p a couple of weeks ago.
Also exchange rates.
Most will be priced in USD, if the price of a commodity drops, say 10%, and the pound drops 10% against the dollar then it costs fewer dollars but the same number of pounds.
And sterling haven't been doing fantasticly well of late
2 main elements. One because the suppliers can get away with it. The other is that the energy market is priced is USD and with Sterling crashing v USD there hasn’t been as much change in the price in Sterling
As for spending the summer filling gas reserves...what reserves?
Centrica closed the Rough storage facility in 2016/17 because the gov wouldn't commit to (part) funding the work required to maintain operational integrity as it believed in 'the market' for reliable supply.
At the time of closure at full capacity Rough accounted for c70% of UK storage and there has been no new storage capacity added since closure
Fast forward to summer 2022; complete u-turn by gov and Rough to part re-open in mid/late Sept.
Capacity limited to 25% of pre-closure max for winter 2022/23 with an increase to 50% for winter 2023/24.
Better than nothing but far short of what we had or what is needed.
As for spending the summe
We're not the only country needing to buy gas on the world market.
As for spending the summer filling gas reserves…what reserves?
I was talking internationally.
IIRC Germany has something like 10x our capacity even pre 2018 with the Rough field because we relied on north sea production to meet demand.
My prices have fallen in line with current wholesale (octopus tracker v1), today's rate 15.38 ppkwh (incl vat), tomorrow 17.25ppkwh, I paid 13ppkwh on Friday. The downside was that I was paying up to price cap much earlier than most people, who would have been on cheaper fixed rates when the prices rocketed late last year
Meanwhile, pretty much all of Scotland's electricity is 'made' from renewable sources, yet our price is fixed at an artificially high level into the UK Pool, simply to support cheaper energy prices for the benefit of the SE of England.
Our prices should realistically be sat at around 10p/unit currently, allowing for a reasonable profit margin on generation and not at @35p. It's obscene.
Seems like a more productive way to tackle inflation would be to adjust the price cap more swiftly rather than raise mortgage payments for hundreds of thousands of families via interest rates.
https://twitter.com/sunny_hundal/status/1584528059734327296
The UK energy market is long overdue for review. In the last decade zero-carbons as a % of electricity generated have increased from 20% to 50% and renewable electricity was greater than fossil fuel electricity supplies for the first time in 2020
Now that we've got Brexit and Covid done 🙂 , maybe we can concentrate on designing better houses, factories and other infrastructure while planning our energy needs
Because this has nothing to do with the price of gas, power, Ukraine, Brexit, or the pound. It's a scam by the UK government to steal more of your money / keep your noses to the grindstone. It's a way to claw back some of the lost billions from decades of cooking the books in our giant ponzi scheme of an economy.
Apart from the tax the government make on corporate and other taxes, they really ain't clawing back money by artificially inflating the energy price. It's been in the hands of private companies since Thatcher sold off the national gas and electricity companies in the 80's
The idea was that market competition would drive down the prices to the final consumers, basically companies competing to trade efficiently and charge low margins worked very well for a couple of decades, UK personal customer prices were very low compared to similar economies.
It has actually all gone to shit due to a, (well understood) adverse coincidence of market conditions on the last few months, and the companies making the excessive profits are the extractors and traders, not the final suppliers, hence many of those have gone bust in the last 12 months.
Now I'm not saying this is all fine and dandy, the government should be windfall-taxing those excssive profits to subsidise personal and SME bills, but that's not to do with the global energy market, or the UK's position in it.
VAT on fuel and energy, higher prices = higher income?
VAT on fuel and energy, higher prices = higher income?
Yes, it's a fair point, but even the Tories haven't cynically found some mechanism to inflate energy prices and increase tax revenues.
tthew
It is not in the hands of private companies. Do you really believe all theses suppliers deal directly with gas suppliers abroad, and that this is not subject to governmental control?
The national grid supplies gas / electricity which comes from general taxation. The 'energy companies' simply provide metering services - that's the only bit that's been 'privatised'.
The government will be making billions off the tax on the latest increases alone. But please do not make the mistake of thinking this government is not completely corrupt and could not / would not create such an operation as to directly raise revenue through a scam.
yet our price is fixed at an artificially high level into the UK Pool, simply to support cheaper energy prices for the benefit of the SE of England renewable energy supply investment FTFY.
.
The government will be making billions off the tax on the latest increases alone.
The government doesn't keep the money it raises through taxes, you know that right? It doesn't get shared out amongst cabinet members.
@veganrider - you have popped up across multiple threads and there’s a clear theme in your posts re a higher level of control than is visible being in place etc. Some of that I find interesting and some I’d challenge but don’t want to derail (for example) this thread. I think that that’s really interesting though and would make for great discussion.
Could I please ask / suggest that you start a new thread about it - lay out your thoughts / beliefs about and get some debate going? It would also help to avoid potential derailing of the idea existing threads.
Do you really believe all theses suppliers deal directly with gas suppliers abroad, and that this is not subject to governmental control?
It's subject to regulation not control, which is the reason there are some additional charges like the green levy applied as Sandwich says.
And the national grid companies are also privatised not understand the direct control of the government.
I'm not going to get drawn into a massive argument about this.
The government doesn’t keep the money it raises through taxes, you know that right? It doesn’t get shared out amongst cabinet members.
Yeah, that would be a bit blatant, even for the current crew.
It's shared out among their family members and future 'employers'.
veganrider = returning troll
highlandman
Free MemberMeanwhile, pretty much all of Scotland’s electricity is ‘made’ from renewable sources
No, this is something I keep reading from the SNP but it's not true:
Scotland uses around 50% renewably generated electricity.
Yes, it generated enough for (actually over) 100% of its usage, but not at convenient time for Scotland to use it, so what it cannot use is sold to the grid.
The other 50% Scotland needs comes from other parts of the grid, so gas, nuclear, wind in England, etc.
Source
https://fullfact.org/environment/scotland-renewable-energy/
veganrider = returning troll
Not the only thread he’s trolling 🤷♂️
Don’t feed the troll.
No, this is something I keep reading from the SNP but it’s not true:
Scotland uses around 50% renewably generated electricity.Yes, it generated enough for (actually over) 100% of its usage, but not at convenient time for Scotland to use it, so what it cannot use is sold to the grid.
The other 50% Scotland needs comes from other parts of the grid, so gas, nuclear, wind in England, etc.Source
https://fullfact.org/environment/scotland-renewable-energy//blockquote >Also misses the fact that they're not state owned.
So even post independence the price wouldn't drop as SSE, E.On, or whoever owns that turbine will be selling the energy to the highest bidder.
It's about as valid (in that it's completely invalid) as saying the entirety of the UK's CO2 emissions are Scotland's fault because of the North Sea.
veganrider = returning troll
He's not even very good at it - far too obvious.
VAT on fuel and energy, higher prices = higher income?
unless your average family has made some money appear from nowhere, that extra money they spend on their gas bill is money they wont be spending on other non essential but desirable things and services, most of which are also subject to VAT.
It’s shared out among their family members and future ’employers’.
Not to mention pub landlords 🙂
Because this has nothing to do with the price of gas, power, Ukraine, Brexit, or the pound. It’s a scam by the UK government to steal more of your money / keep your noses to the grindstone.
Bit more complex than that - more like a scam to divert your money into the wallets of big oil, who will then use a bit of it to ensure the Tories stay in power and some individuals stay in luxury.