Gas Prices

[wilts rover]

Germany's gas storage facilities filling quicker than expected.

German gas reserves now at 85% (the target for 1st October) meaning that it's unlikely the country will face shortages this winter. With the expected move to import more LNG through France it appears they will no longer need to import from Russia.

What is it we were doing again?

https://www.reuters.com/business/energy/germanys-gas-storage-facilities-filling-up-faster-than-planned-econ-minister-2022-08-28/

[albie]

It is a bit of a worry to see some are buying the Truss line that curbing "green levies" is a useful contribution.

The raft of measures under that heading come to about £11 per household, per quarter.
This is money that goes towards insulation measures for the poorest.

To set the scale of change, Cornwall Insight are forecasting a price rise to £6600 per annum average increase from April 2023.

Truss is an idiot, do not be deceived by her soft sell to the golf club set.
This is a major economic challenge, fumbling down the back of the sofa for loose change will not make a blind bit of difference.

[grayx]

I really dont like Sunak & his tax fiddling antics but the alternative is scary. Truss is an idiot.

[Panda]

Sunak had the audacity to come out and say that he was against lockdowns when at the time he did f**k all about it. He doesn't deserve to breathe the same oxygen as the rest of us never mind become PM.

He also announced 5p off fuel duty as though he was the messiah. Two weeks later that 5p was wiped out due to further fuel price rises. Four weeks later fuel prices were like 20 p more than when he knocked the 5p off.

Total and utter ballsack.

[wilts rover]

In 2021

Germany got 55% of its gas from Russia
France got 17% of its gas from Russia
UK got 4% of its gas from Russia

In 2022 energy prices have risen

23% in Germany
4% in France
213% in the UK

what role is Russia and the war in Ukraine playing in the rise of energy in the UK again?

https://twitter.com/KimThor93328499/status/1564651125940387840

[BillyStubbsTears]

Because German and French Govts are subsidising the price.

We are behind the curve because of the paralysis of our Govt, but we will (I assume,) do something similar (or alternatively, pour money into the accounts of energy consumers) starting in a couple of weeks.

[IDM]

Maybe because there’s more demand on the rest of the supplies not coming from Russia.?

[BillyStubbsTears]

Bang on IDM.

The source of the gas is absolutely irrelevant. The fact that Russia has throttled supply has forced up the price of gas all over the world markets.

We import 50% of our gas from Norway. They aren't going to sell it to us for £1 when Germany is prepared to pay £4.

[wilts rover]

So its not the fact that there is a war between Ukraine and Russia that has seen 213% price rises in the UK. It's the profiteering of the energy production companies and the inaction/policy of the UK government.

Gotcha.

[albie]

BST,

Do you have a reference for your belief that 50% of UK gas comes from Norway?

My info is that it is nearer to 33%, subject to existing contracts.
The situation may have changed of course, hence my question.

[IDM]

So its not the fact that there is a war between Ukraine and Russia that has seen 213% price rises in the UK. It's the profiteering of the energy production companies and the inaction/policy of the UK government.

Gotcha.

Albeit as a consequence of the war.

[rich1471]

It does not matter if the gas is coming from Iceland Russia or catmando people are still been fleeced with the price and cannot afford to hear their homes 

[BillyStubbsTears]

So its not the fact that there is a war between Ukraine and Russia that has seen 213% price rises in the UK. It's the profiteering of the energy production companies and the inaction/policy of the UK government.

Gotcha.

Yes I agree that the production companies are profiteering. No question
 

The question is, what can you do about it if you're dependent on imports?

German citizens will still end up paying for this in the long term. Because their country will be poorer by the amount they've had to pay extra for the gas. The fact that the Govt is subsidising the price consumers pay means that consumers are isolated from the cost NOW. But they'll have a poorer future because Govt spending will have to be lower, or taxes higher. There's no getting away from that.

[BillyStubbsTears]

BST,

Do you have a reference for your belief that 50% of UK gas comes from Norway?

My info is that it is nearer to 33%, subject to existing contracts.
The situation may have changed of course, hence my question.

Sorry Albie, my mistake. We import 50% of our gas. 77% of that, last year, came from Norway (both ONS figures https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/articles/trendsinukimportsandexportsoffuels/2022-06-29#:~:text=Norway%20is%20typically%20the%20UK's,the%20United%20States%20and%20Russia.). So Norway produces 38.5% of our gas, not 50%. My mistake.

Doesn't change the basic point. 50% of our gas comes from foreign sources and we have zero option but to pay the global market rate for that.

The 50% that's home produced could have its price controlled by the UK Govt. Taxing excess profits of North Sea producers, done properly, has precisely the same effect.

[RobTheRover]

Consultation released by the Department of Levelling Up today on limiting the rise in Service Charge social landlords can pass on to tenants.  Recommendations to consider values of 3%, 5% and 7%.

Social housing providers are not "protected" by the price cap as they are not residential supplies. The government has to consider support for the providers too in this scenario. Imagine the consequences of a housing association going bust.

[BillyStubbsTears]

Consultation released by the Department of Levelling Up today on limiting the rise in Service Charge social landlords can pass on to tenants.  Recommendations to consider values of 3%, 5% and 7%.

Social housing providers are not "protected" by the price cap as they are not residential supplies. The government has to consider support for the providers too in this scenario. Imagine the consequences of a housing association going bust.

Jesus, that is a massive problem for Housing Associations.

Duncan Weldon said in that podcast I posted in the Sunak or Truss thread that neither of them has said anything in their campaigns that comes remotely close to the scale of intervention required.

I've been saying for weeks, I desperately hope there are some very bright people at the Treasury figuring out how we get money to people and organisations that are going under otherwise. What they need to do, next Tuesday, is lock Truss in a room, give here the emergency measures they've (hopefully) been sorting out, and tell her if she doesn't sign them, she won't have a country to rule by Xmas.

[Sprotyrover]

I recall Balby Bridge Estate, Coal House, the Police Hq and the courts all were fed by one heating facility that's about 900 Flats doesn't bode well if it's still like that nowadays.

[Sprotyrover]

Bit of abetted news a wind farm system came on the Grid today which will provide Electricity sufficient to power 1 million homes, it 15 miles off Grimsby ,one of many being developed.

[normal rules]

The Hornsea project, 75 miles off the East Coast has just gone online with its phase2. It’s the largest offshore wind farm in the western world. Hornsea 3 and 4 when complete will bring the total output of the Hornsea farm to 6 gW.

[IDM]

We are a windy nation surrounded by tidal waters.. this should have been started decades ago.  I remember seeing wave power generation being covered on Tomorrows World in the late 70s or early 80s.. 40 bloody years ago..

But we still have NIMBYs today opposing solar farms.!

[BillyStubbsTears]

We are a windy nation surrounded by tidal waters.. this should have been started decades ago.  I remember seeing wave power generation being covered on Tomorrows World in the late 70s or early 80s.. 40 bloody years ago..

But we still have NIMBYs today opposing solar farms.!

And an imminent new PM who is indulging them.

[RobTheRover]

Consultation released by the Department of Levelling Up today on limiting the rise in Service Charge social landlords can pass on to tenants.  Recommendations to consider values of 3%, 5% and 7%.

Social housing providers are not "protected" by the price cap as they are not residential supplies. The government has to consider support for the providers too in this scenario. Imagine the consequences of a housing association going bust.

Jesus, that is a massive problem for Housing Associations.

Duncan Weldon said in that podcast I posted in the Sunak or Truss thread that neither of them has said anything in their campaigns that comes remotely close to the scale of intervention required.

I've been saying for weeks, I desperately hope there are some very bright people at the Treasury figuring out how we get money to people and organisations that are going under otherwise. What they need to do, next Tuesday, is lock Truss in a room, give here the emergency measures they've (hopefully) been sorting out, and tell her if she doesn't sign them, she won't have a country to rule by Xmas.

Apologies, I slightly misread the release from government. Its a price cap on rent rises. Essentially means the same thing though, that social landlords are going to be left holding the heat and power baby. Service charge for amenities is usually baked into rent unless separately heat metered in the case of a district heating scheme, for example.

[Sprotyrover]

Apparently chairman of OBO? Energy just mooted idea that every house hold pays the same amount for their energy up to a certain point,say enough to heat a 2 bed house over that amount of usage and the price gets whacked up! That seems an excellent idea as it will encourage most folks to use what they need !

[albie]

It is called a "social tariff" Sproty.

Absolutely essential for the future, to prevent avoidable cold winter deaths.

[albie]

Letter in the FT which sums up the serious position of the UK economy;
https://www.ft.com/content/e2533cd5-1fda-42ed-9ad3-5dab845e4558

Lets hope that Truss/Sunak/Keith all read it, as none of them understand the nature or depth of the problem we face.

[albie]

Billy,

From the electric car thread, but better in here:
"I get all that but there are still likely to be high electricity costs for the next year or two at least. You aren't going to be able to wean us off gas as a major producer of electricity in the blink of an eye."

About 55% of leccy in the UK is NOT produced from gas, so that proportion is subject to price reduction pressures.

With new capacity from offshore wind renewables coming onstream at the current price of £37.35 mw under Contracts for Difference, once electricity is decoupled from wholesale gas the market will move quickly.

Gas demand is predicted to reduce by 7% or so this winter as a result of the wholesale increase.
Put those two factors together and the change away from gas will accelerate.

The big question is how the UK retains the value to users from that market move.

You come back to the issue of what is the primary aim of the producer of that energy, supplying domestic consumers at the lowest cost, or making the highest profit by sale on international markets?

[River Don]

Apparently chairman of OBO? Energy just mooted idea that every house hold pays the same amount for their energy up to a certain point,say enough to heat a 2 bed house over that amount of usage and the price gets whacked up! That seems an excellent idea as it will encourage most folks to use what they need !

In France I think they have a sliding scale, so the more you use the more you pay. It seems very sensible.

Where as in the UK it's a huge standing charge you get whacked with whether you use any energy or not.

[ravenrover]

Head of OVO saying there should be an Energy Fund to help suppliers borrow against to keep bills low. Is it not beyond reasonable thought that the energy companies could reduce the price people pay which would only affect their massive profits?

[River Don]

I heard tell that our local fish n chip shop might be closing. Apparently they've been struggling to fix his prices for fish and potatoes. Taken with some huge energy bills, I was told they are looking at £50 a portion of fish n chips next year. Not doable. I shrugged it off and thought, the bloke telling must've got it wrong. It'll be £15 a portion I thought...

Then I heard chef, Tom Kerridge on the radio. His gastro pub in Marlow, Bucks has been paying £5,000 a month in energy, to run everything in the kitchens and what have you. His energy contract is coming up for renewal and he's been quoted.....

£35,000 a month to fix now. £35,000!!! at the a £100 posh dinner will have to be £600 or £700 quid! No business can absorb these sort of costs.

This is hyper inflation of an unimaginable sort. They reckon at least 70% of pubs will close. £30 a pint! No wonder.

[wilts rover]

Sky News has been told that care homes are facing closure this winter with some being quoted between 200-400% more for their energy costs. We've spent today with @sheffcare who say they usually pay around £90,000 across their nine care homes, they've recently been quoted £1.16m.

Chief Executive @ClaireRintoul told @ashishskynews:
 "It just doesn’t work, that is not just a realistic figure that we can afford. In the worst case scenario we close, that is the absolute worst case scenario.”

https://twitter.com/SkyNewsThompson/status/1565400085839728642