Gas Prices

[ncRover]

Away from the politics, the futures price of gas is still coming down rapidly.

Currently at the lowest price for 18 months and still falling.

I heard Martin Lewis on the radio discussing this last night. Because these are FUTURES prices, there' a 6 month or so lag between the price changing sand this being reflected in our bills. But he expects by late summer that the average household gas and  electric bill will be down to £2100, down from the (capped) current level of £2500, and the uncapped value of ~£5000.

That’s good news. As is this mild weather.

[drfchound]

The bbc morning news also reported the falling gas prices.

[albie]

Consultants Cornwall Insight say raising the Energy Price Guarantee from £2,500 to £3,000 in April will save the government £2.6bn across the entire scheme. Based on projected costs, if the EPG increases to £3,000 as planned, the cost would be £26.8bn if it remains at £2,500, the cost would be £29.4bn.

So Hunt can in his March budget absorb any increase at very low cost to the Treasury, covered by the better than expected tax received in the latest figures.

Still no justification for an extended time delay to price revision, which could operate much more quickly.

When are we going to have a mature discussion about standing charges, which act as a push factor on cost increases without justification?

[albie]

Centrica are still playing silly buggers over Rough, as I posted in 810;
https://www.energyvoice.com/oilandgas/north-sea/484981/centrica-rough-gas-storage-could-run-for-40-more-years-through-fresh-investment/

They still want a big subsidy to do what is obvious for their business.
Given this facility can transit to green hydrogen storage from North Sea wind in due course, it's a no brainer.

If Sunak/Hunt and Co had any bollox, they would take Rough from Centrica and develop it as a national resource.

What a strange world we have when private corporates expect their ongoing business investment to be funded by the public, so that they can generate excess profits to be paid to their shareholders.

[rich1471]

Just had an email from eon saying standing charges are going up from 49p per day to 55p per day ,that because the electric has come down ,so they are just putting these up to compensate robbing sods

[big fat yorkshire pudding]

Unit price on electricity is coming down though so the impact is negligible to none. For me it's about £14 saving on a yearly basis as I save more on usage than the standing charge increase.

Maybe it would go down further if we have labours (spent on everything) "proper windfall tax".

[albie]

Germans getting serious about phasing out gas:
https://www.ft.com/content/fbb800a9-5c6e-4781-943b-a6235f4149c9

We need to do the same, if we had any backbone.

[ncRover]

Germans getting serious about phasing out gas:
https://www.ft.com/content/fbb800a9-5c6e-4781-943b-a6235f4149c9

We need to do the same, if we had any backbone.

The same Germans who are burning an increasing amount of coal due to shutting down nuclear plants?

[albie]

ncRover,

I think you are muddling different issues up.

Germany is looking to reduce dependency on gas imports, previously from Russia.
So they have a policy to do that, for energy security reasons.

Germany plans to phase out fossil fuel heating, starting from January 2024.
Use of coal in Germany (and elsewhere) will decline rapidly going forwards, on cost grounds as well as on carbon emissions.

The phaseout of nuclear at the end of life schedule has been policy in place for some years.
There has been discussion about whether a temporary extension to existing nuclear should be granted, as a bridge to allow renewable capacity to be extended as a replacement.

They have decided not to extend operational lifetime of nuclear, which would have been subject to safety assessment in any case.
I disagree with that conclusion, but any use of coal is a short term measure pending the uptake of new renewable capacity.

As Europe is looking to electrify at speed, the question is how you generate sufficient electricity at lowest cost.
Wind and Solar are far cheaper than other means of generation, so coal and nuclear will not be in the mix 5 years down the line.

[Sprotyrover]

By 2032 the Dogger Bank will be producing Enough electricity to fuel 25 million homes, by 2050 it will produce enough for 85 million
That's just the Dogger Bank, plus all of the other offshore Green schemes, all we need to be doing is developing better storage schemes like the one proposed for Thorpe Marsh and we could easily become a huge energy exporter.

[ncRover]

ncRover,

I think you are muddling different issues up.

Germany is looking to reduce dependency on gas imports, previously from Russia.
So they have a policy to do that, for energy security reasons.

Germany plans to phase out fossil fuel heating, starting from January 2024.
Use of coal in Germany (and elsewhere) will decline rapidly going forwards, on cost grounds as well as on carbon emissions.

The phaseout of nuclear at the end of life schedule has been policy in place for some years.
There has been discussion about whether a temporary extension to existing nuclear should be granted, as a bridge to allow renewable capacity to be extended as a replacement.

They have decided not to extend operational lifetime of nuclear, which would have been subject to safety assessment in any case.
I disagree with that conclusion, but any use of coal is a short term measure pending the uptake of new renewable capacity.

As Europe is looking to electrify at speed, the question is how you generate sufficient electricity at lowest cost.
Wind and Solar are far cheaper than other means of generation, so coal and nuclear will not be in the mix 5 years down the line.

Fair enough Albie, you know your stuff. It will be interesting to see how that goes.

[River Don]

The fascinating thing is to see how low Swiss inflation has remained throughout this entire crisis.

Switzerland use virtually no natural gas for energy production. They are very lucky in being a mountainous country, they can rely so much on hydroelectric power.

[BillyStubbsTears]

The Swiss are indeed lucky, but they have also invested in the engineering infrastructure required to harness the potential that their landscape offers. They do this on mammoth scale.

The Grand Dixence reservoir  is 2500m above sea level, and to capture the water, they built a concrete dam there which is nearly the height of the Emley Moor mast. Then there's 100km of tunnels to take the water at hundreds of mph 2km vertically down the mountain to the turbines.

It's worth it though, because the energy released by dropping water through those sorts of heights is huge. 1 litre falling 2km will produce enough electricity to power a light bulb for 1 hour. The Grand Dixence reservoir holds 400 BILLION litres, and releases it at a rate of up to 750 million litres per second. The energy generated from that reservoir is not far off that produced by Drax - without an ounce of CO2 released.

[River Don]

Economics owes much to science and engineering. I'd always put my faith in engineers before economists.

And the Swiss are an object lesson in the value of green energy.

[BillyStubbsTears]

As an engineer myself RD, I have a different take. We need both great engineers AND great economists. One without the other is bound to fail.

Engineering takes on relatively easily defined problems. They can still be hard to solve, but you're dealing, mostly, with mechanisms that are testable and capable of being analysed and understood.

Economics is far, far harder, because you are dealing with complex, very difficult to properly analyse systems, vulnerable to the caprices of human actions. And economics is always affected by politics.

There are great and awful engineers and great and awful economists.

Awful engineers usually get weeded out.

Awful economists can still have great influence, if they tell the story that the politically powerful want to hear. God knows we saw that with Austerity, where the awful economists won because their ideas were what the Right wanted to hear.

I've just finished reading a superb book by a superb economist. Slouching Towards Utopia by Brad Delong. Absolutely brilliant masterpiece on the economics of the past 150 years - what we got spectacularly right and wrong.

His take is that we had a semi-Utopian world in our grasp between 1945 and 1975. A world of rapid growth, more equitably shared than ever before. But we threw it away after that by embracing economic ideas that made the rich fabulously wealthy while anyone outside the top 10% slipped behind. And that was a political choice, embracing demonstrably wrong economics.

I'd recommend that book to anyone who is seriously interested in the economic and political problems we have today.

[Colemans Left Hook]

Ok BST here is your next book to read



https://whoswholegal.com/features/securitisation-a-brief-history-and-the-road-ahead

In 2008 the "flaw" in it was revealed

caused by "financial engineering"



 

[drfchound]

I would imagine that lots of people could look back over the last 150 years and tell us where we went right or wrong in lots of things.
Hindsight is a wonderful thing.

[BillyStubbsTears]

It'll be interesting to see what level OFGEM set the July energy price caps in a couple of weeks time.

The gas futures price is still coming down at a rate of knots. Putin has lost that war and that ability to hold Europe to ransom.

The issue know is how fast prices to consumers will come down.

I'm on Octopus Agile tariff for my electricity. They offer a different price for every 30 minute block of the day, depending on predicted cost to them if buying the electricity and demand from consumers.

Over the past four months, the average price of Octopus Agile electricity has been:
Feb 27.4 p/kWh
Mar 23.7
Apr 22.5
May 20.5


The highest rate Octopus had charged in the past 12 months was 35p when there was a brief panic about gas supplies last Summer. Apart from that, it hasn't touched 30p.

Yet the big providers are still charging 31-33p, day-in, day-out, in line with the current price cap.

If Octopus can turn a profit at their rates, it looks very much like the big companies are profiteering under the cover of a way too high energy cap level.

But still no action from this Govt to bring them to heel.

[albie]

The forecast rates are given here:
https://twitter.com/CornwallInsight/status/1655859476501504002

Still no fundamental change to the structure of energy markets, so no real prospect of reducing fuel poverty by either government nor industry.

The elephant in the room is electricity charges.
These continue to be set by wholesale gas prices, for which there is no longer any clear reason.

Privatisation of energy service provision is a con trick on the public accounts, and a rip off of consumers.

None of the political parties have any clue about energy economics, aside from the need to curry favour from the vested interests.

[scawsby steve]

The forecast rates are given here:
https://twitter.com/CornwallInsight/status/1655859476501504002

Still no fundamental change to the structure of energy markets, so no real prospect of reducing fuel poverty by either government nor industry.

The elephant in the room is electricity charges.
These continue to be set by wholesale gas prices, for which there is no longer any clear reason.

Privatisation of energy service provision is a con trick on the public accounts, and a rip off of consumers.

None of the political parties have any clue about energy economics, aside from the need to curry favour from the vested interests.

Yes, Albie, and of all the pledges Keith has reneged on, and there have been plenty, his U turn on public  ownership, particularly energy, has been the worst.

[Metalmicky]

It'll be interesting to see what level OFGEM set the July energy price caps in a couple of weeks time.

The gas futures price is still coming down at a rate of knots. Putin has lost that war and that ability to hold Europe to ransom.

The issue know is how fast prices to consumers will come down.

I'm on Octopus Agile tariff for my electricity. They offer a different price for every 30 minute block of the day, depending on predicted cost to them if buying the electricity and demand from consumers.

Over the past four months, the average price of Octopus Agile electricity has been:
Feb 27.4 p/kWh
Mar 23.7
Apr 22.5
May 20.5

Do Octopus offer an Agile tariff for a combined Gas and Electric user or is it just Electric - and if so can you be on a separate tariff with Octopus for Gas supply at the same time?

[BillyStubbsTears]

There's no Agile gas tariff. But you can be on Agile for electricity and their standard tariff for gas, which, as with all other providers, is currently about 10p/,kWh.

There's no penalty fee if you leave them either.

[Campsall rover]

There's no Agile gas tariff. But you can be on Agile for electricity and their standard tariff for gas, which, as with all other providers, is currently about 10p/,kWh.

There's no penalty fee if you leave them either.

I am with Octopus and never heard of this Agile Electric Tariff
Will be looking into this immediately if it’s cheaper.

[BillyStubbsTears]

There's no Agile gas tariff. But you can be on Agile for electricity and their standard tariff for gas, which, as with all other providers, is currently about 10p/,kWh.

There's no penalty fee if you leave them either.

I am with Octopus and never heard of this Agile Electric Tariff
Will be looking into this immediately if it’s cheaper.

Depends when you use your electric. It's slightly more expensive at peak times, but overall, much cheaper.

This website is updated around 4pm each day with the next day's rates.

https://agileprices.co.uk/?region=M

Obviously it works out much better if you have a battery at home. We've got a 9.6kWh battery connected to our solar panels. This time of year, the battery usually fills up during the day. But today the panels only produced 3.5kWh. So I topped up the battery between 2-5pm when the electricity cost was only 15p/kWh. That'll see us through to lunchtime tomorrow, by which time the sun should be out again, or if not, we can fill the batteries from the grid tomorrow pm at 13p/kWh.

On average we use about 12kWh per day. So at the standard tariff of 33p that would be about £4 per day. With the panels working, we've only drawn 3kWh per day from the grid this month, and most of that has been at 15p. So we've actually spent less than 50p per day.

[big fat yorkshire pudding]

Quite an interesting election battleground this could be.


https://news.sky.com/story/sir-jim-ratcliffe-warns-of-north-sea-energy-death-due-to-uk-windfall-tax-12882017

[Not Now Kato]

Quite an interesting election battleground this could be.


https://news.sky.com/story/sir-jim-ratcliffe-warns-of-north-sea-energy-death-due-to-uk-windfall-tax-12882017

Sir Jim speaks with forked tongue.

[drfchound]

Always more to it than meets the eye when it comes to taxing businesses.

[BillyStubbsTears]

Quite an interesting election battleground this could be.


https://news.sky.com/story/sir-jim-ratcliffe-warns-of-north-sea-energy-death-due-to-uk-windfall-tax-12882017

Man who makes utterly obscene profits from fossil fuels complains about being taxed.

Slow news day?

[big fat yorkshire pudding]

Or man who holds the purse strings states facts?  He's not the only one saying it.

[drfchound]

He also said that the extra taxes would impinge on any investments they could make on renewables.