Energy Bills To Rise More Than Predicted, Says UK Energy Regulator Ofgem Boss (bbc.com) 72
An anonymous reader shares a report: Domestic energy bills will rise faster this winter than previously forecast by the energy regulator Ofgem, its chief executive has admitted to MPs. Jonathan Brearley said in late May that a typical household would pay $951 a year more from October. But, while giving evidence to MPs, he said it was "clear" that estimate for winter bills now looked too low. The original figure was used by ministers when deciding how much to pay in direct assistance this winter. One industry analyst has predicted a rise of more than $1,426 a year in October. Cornwall Insight said that the typical domestic customer was likely to pay $3,856 a year from October, then $4,000 a year from January. The typical bill at present is about $2,378 a year. In itself, this was a rise of $832 a year in April, compared with the previous six months.
Re: (Score:3)
Re: (Score:3)
Because when you convert it directly, it becomes a specific figure rather than a general figure, and it's kinda one of those "accepted in society things" that when you throw around rounded figures they are generalisations, but specific figures are exactly that - specific.
In other words, the conversion to a specific number means that there is implied context lost.
Having the conversion say "... would pay $950" would be more than acceptable in this case - no context is lost, the idea that its a generalised rou
Re: (Score:2)
Re: (Score:2)
You know exactly what is being intended here, stop digging.
Re: (Score:2)
Re: (Score:2)
Writing it as $951 falsely implies there are that many significant figures [wikipedia.org] in the number. The original estimate was not precise to 0.1%, so it should only be written as $950 or $1000.
(A strict application of significant figures might say $1000 is "truer" than $950, but the error makes that arguable. I think most readers would understand that, in this context, $950 is an estimate with about $50 of precision rather than $10 of precision.)
Re: (Score:2)
Writing it as $951 falsely implies there are that many significant figures [wikipedia.org] in the number. The original estimate was not precise to 0.1%, so it should only be written as $950 or $1000.
While this is technically correct, it is also the mathematical version of pedantry. Approximately nobody who reads this thinks it will be exactly $951, nor will they assume that every individual household is "typical".
Re: (Score:2)
Huh? The conversion is the dollar equivalent of the estimate, as it should be.
Not really - first it's not clear which dollar is being used since this is a story about the UK so there is no context that suggests whether this is the Canadian, NZ or Australian dollar or even someone else's since the UK does not use dollars. Secondly, since this is a prediction for the future given how much the pound and Euro have been tanking over the past few weeks it may well be that 800 pounds remains an accurate estimate but the value in whosever dollar is being quoted is wildy inaccurate.
Re: Hot to convert round number estimates (Score:2)
Re: (Score:2)
Because you can spend them in nearly any place on Earth without converting to local currency first.
I hate to break it to you but as someone who has lived in quite a few different countries and visited more, there are almost no places outside the US that accept US currency. Even in Canada this is uncommon. The few places that do are usually tourist places or airports and they will typically accept euros and even UK pounds as well - all at outrageous exchange rates of course.
Airspeed velocity of an unladen swallow (Score:2)
European or African?
The Why (Score:2)
It sounds like the price caps put in place strangled some energy suppliers and others are at risk of failing.
From the article:
Soaring wholesale prices meant around 30 suppliers have collapsed during the crisis that has hit the sector. A total of 26 remain in the market.
About 2.4 million customers were automatically moved to a rival company when their own supplier folded. Typically, according to Citizens Advice, they had to pay an extra £30 a month for the duration of their original contract, as they were shifted to a more expensive tariff.
In addition, the cost of these failures totalled £2.7bn - a tab which was spread across all billpayers in Britain at a cost of about £94 each, not just those of the failed companies. This is before taking into account the potentially multi-billion charge that households could face due to the collapse of Bulb Energy, which is in special administration.
Last month, it was announced that Hayden Wood, who was the company's boss and co-founder, would leave at the end of July.
In June, the National Audit Office (NAO) said Ofgem had allowed an energy market to develop that was vulnerable to large shocks.
The NAO said that Ofgem had decided on a "low bar" approach for allowing new domestic energy suppliers into the market to encourage competition and choice for customers after the market had been dominated by six big companies.
Re:The Why (Score:5, Informative)
Note that a lot of the companies that did fail failed because they were "fake" energy companies that did little more than buy and sell on the open market - they had no generation capacity of their own, and no agreements with generating companies for favourable rates, they just bought from the National Grid and sold to consumers.
They were undercapitalised and played the "low margin, high transaction count" game without hedging properly, which is why they got caught out by the price caps.
It is a regulatory failing, but its also bad management by those companies that failed.
Re: (Score:3)
We have a lot of that here in the US as well. Enron [wallstreetmojo.com] comes to mind.
Re: (Score:3)
They were undercapitalised and played the "low margin, high transaction count" game without hedging properly, which is why they got caught out by the price caps.
While that is very likely true, the underlying business model is to make money while you can, and walk away with the profits when it fails. That does not require buffer capital, hedging, and so on. The trick is to use Other People's Money to fund the business. It would be interesting to know whether the operators of these failed companies ended up profiting.
Re: (Score:2)
This is the way competition is forced onto a natural monopoly :
First the separation of producers and distributors.
Then separation of distributors and resellers.
Resellers by definition have no production or distribution capacity. And almost no hedge against swan events.
As for stupid regulation: yes. Now, pardon my french...
France: Loi Nome. (Nome law). Forced sale of a percentage of nuclear produced electricity at a fixed rate onto the market, which is then resold at market rates.
This was done because EDF, h
Re: (Score:2)
They may operate under the same group name, but if you look at your bills then you'll see what I mean
Re: (Score:2)
This is true, but the energy companies can still have preferential agreements between their consumer facing entities and any generation entity.
An energy company that sells to the public can basically operate in one of two ways - it can either buy energy on the open market, basically paying spot prices, or it can buy generation capacity as well which offsets their energy purchase costs.
This is the way "green-only" consumer facing energy companies work - of course they can't guarantee that the energy you use
Re: (Score:2)
Just another example of deregulation failing in the UK. We also squandered all the oil wealth from the North Sea.
There solution is always more free market, but people need energy and it doesn't work as a market. They spent over a decade trying to get people to switch providers so that there would be competition, and it never worked very well.
Same with so many other things. Trains were never going to work as a competitive market. You can't just decide you are going to Birmingham today because the train is ni
Re: (Score:2)
“The government you elect is the government you deserve.” - Thomas Jefferson
Re: (Score:2)
“The government you elect is the government you deserve.” - Thomas Jefferson
Perhaps, but we don't vote on who the PM is. The members of the conservative party do, all 200k of them. Mostly white, male, old and from the South.
Re: (Score:1)
Re: (Score:2)
People unfamiliar with the UK may not realize how this works. Its not a presidential system. Its a Parliamentary Democracy. Quite different. You elect your local Member of Parliament. They belong, normally, to a poltical party.
Since the Revolution of 1688, the Prime Minister is appointed by the Monarch inviting an individual to form a government. To do that he or she will need to be able to command a working majority in Parliament, the Commons in particular.
This will, since the emergence of modern pol
Re: (Score:2)
You can also by the way see the difference if you ask what happens if the country or party wants to dismiss the Prime Minister.
Under the US system the only way is impeachment. In the UK, a vote of no confidence by the Commons will lead to the fall of the government and a new general election.
A vote of no confidence by Conservative MPs will result, as now, in a leadership contest and the replacement of the PM by someone else from the same party.
The Labour Party just now tried to schedule a vote of confidenc
Re: (Score:2)
The price cap was introduced because the market doesn't work. Too many people were not switching, so getting ripped off for being loyal customers. The fact that the largest suppliers were also the largest producers of energy distorted the market too.
Re: (Score:1)
Or perhaps people aren't switching because they don't trust the newcomers, know they are unsustainable and if they move off their current supplier, getting back on would be more costly or even be prohibited by the government. And lo-and-behold, those people were right. Markets, they work.
Re: (Score:2)
Actually, I'd argue that it worked very well - very quickly we had entrants like Ecotricity. By no means perfect, but they aimed to only ever sell "green" energy. Nowadays there are a handful of other green-only providers, but it wasn't always that way.
You'll note that British Gas, EDF and the others may have a "green tarriff", but they still invest heavily in brown energy. Someone's got to, but had they been left as our only providers, that green tarriff was all the choice you'd likely ever had. As it is,
Re: (Score:3)
It sounds like the price caps put in place strangled some energy suppliers and others are at risk of failing.
Mostly not. The price caps are mostly to stop the people who won't play the game and switch energy suppliers every year or so getting screwed. The people who got burnt here are the ones who switched to a cheap fixed price tariff from a 'disruptive company', who when wholesale prices rose were another firm with a 'we make a loss on every sale but think of the volume' business model.
Strange article (Score:4, Insightful)
Re: (Score:1, Troll)
I'm pretty sure that whomever is the next prime minister will blame former PM Johnson for whatever is wrong, as is typical in politics. It may be Johnson didn't act with sufficient speed, vigor, or whatever. Because no matter what the problem is there's always something that could have been done sooner.
Boris Johnson said he intended the UK to build a new nuclear power plant every year. If the next PM is reading the reports out of their own department of energy then that plan will stay, or become a higher
Re: (Score:1)
Re: (Score:2)
Solar doesn't heat your house. That typical household can skimp on electricity but will find their energy bill absolutely dominated by the cost of gas for heating. That typical household also lacks the energy rating to implement a fully electric heatpump.
Solar helps a bit, but the typical household is far better off dedicating the money to insulation projects. If your energy rating is already a B or higher then solar may be a good option.
Likely to rise elsewhere too, for other reasons (Score:3)
From my view inside the utility industry, there are all kinds of plans to increase control over customer usage patterns, to create things like Virtual Power Plants, which basically are just new ways to describe shifting energy use off-peak, or on to whenever renewables happen to be generating. These plans will require incentives, and it's going to be difficult to incentivize anyone to do their laundry in the middle of the night based on current power rates which in many places have lagged inflation for decades. Rates will need to increase drastically.
But at the same time, there are equity concerns, so subsidies will also need to rise. It's very unclear how any of this will actually work in a fair and yet effective fashion. What percentage of the customers will have the flexibility to shift their loads vs. those who must work outside the home for fixed hours, get home, do household chores, get to bed early, and wake up early to a recharged car. And how high will the rates need to be influence the usage of those flexible folks, who are likely richer?
How much would you pay to be warm or cool when you need it, to eat, sleep, drive, and do laundry when it's convenient for you? I would pay a ton for those basic quality-of-life items, and I probably will. Others may not be able to afford it, but given fair and adequate subsidies, they will also opt against load-shifting.
Re: (Score:2)
How much would you pay to be warm or cool when you need it, to eat, sleep, drive, and do laundry when it's convenient for you?
Any government that wants to reduce your choice as to when you can do these things will be short lived.
Try living in Arizona.. Efficency is Critical! (Score:5, Insightful)
Re: (Score:2)
So, if it's 0c outside and 21c inside, that's a delta of 21 degrees. If it's 46c outside 23 c inside, that's a delta of 23 degrees. You'd think you can divide it by four and get a correct answer for the cost of heating versus cooling, but there are other factors. Here, we have to take into account, no
Re: (Score:1)
Heating takes more energy but less cost. Natural gas heat is cheap, electric cooling is not. Because we produce so much electricity with natural gas the cost of electricity will always be higher for the same unit of energy. (I use "we" quite broadly here. As in "we" as a species, not any specific nation or region.)
Maybe on paper someone can claim there's a thermodynamic advantage to using a heat pump to cool (or even to heat) over that of heating by burning hydrocarbons. That doesn't make it cheaper.
Re: (Score:2)
None of which has anything to do with the UK, where practically no-one has AC at home, although with the recent heat I wouldn't turn my nose up at a portable unit. Home insulation is generally quite good, especially in newer homes.
Re: (Score:2)
Re: (Score:2)
In the UK, homes are a lot older on average than they are here.
I know. I live there. They're also mostly made of bricks, which is why we tend not to demolish and rebuild them as often as they do in the USA. It's also much colder here, which is why we've known the value of good insulation for decades. For example, my house was built in the forties and the only significant changes we've had to make were double glazed windows, cavity wall insulation and a new combo boiler. All were fairly easy to retrofit.
This is applicable to every place, no matter where you live.
Except that it isn't; you don't use gas to power your AC. We do rea
Re: (Score:2)
Our house is built for a radically different climate than yours, and would probably dissolve in UK weather. It's built more like a thermos bottle. (Using US measurements,since that's what is used in construction here.) It has thick walls 2x12" studs, a vapor barrier, and a 2" foam panel surface which is finished with a thin layer of concrete stucco. The roof is covered in ceramic tiles. Windows are triple glazed with a reflective coating and a low-e inner barrier
Re: (Score:2)
Re: (Score:2)
Nosy question but asking anyway: What did the 16 SEER Heat pump cost, and how much energy did you actually save?
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Air conditioners use so much electricity that a normal backup generator can't handle the load.
We live in a newer area, so we don't loose power for a significant amount of time often... but when it happens in the summer, we pack up and leave for a place with power.
Re: (Score:2)
we know how to extract natural gas and uranium ore
You can't run uranium ore in a gas turbine.
You can't extract more natural gas than you already have, and the UK (along with everyone except Russia) is currently sucking out wells at peak capacity.
The "artificial" thing you talk about is called supply and demand, and unfortunately it's very easy to rapidly have supply drop, and very difficult to rapidly make it increase.
Re: (Score:2)
Re: (Score:2)
There have been calls for assistance with that sort of thing for years in the UK. Our housing stock is very poorly insulated, but the cost of fixing it is relatively high for the owner. If the owner is a landlord, they probably don't care anyway.
The government could start a scheme to insulate homes. Governments can borrow money very cheaply, and then slowly claw it back through a small levy on energy bills for homes that have had it done. The savings would far outweigh the levy and help people who can't aff
re: efficiency (Score:2)
Sure... but to be honest, anyone running HVAC equipment rated at only 10 SEER is using some really OLD stuff, or it must have been bargain basement priced initially?
I just had to replace the HVAC system in my own house, because the system it came with when I bought the place a year and a half ago was a highly-efficient Trane system, but still used the old (no longer produced) Freon as coolant, and it developed a leak. I got it recharged once, by an HVAC tech with a jug of recycled coolant. They couldn't det
Re: (Score:2)
Perhaps higher energy costs in Europe will beget better use of energy
The typical European house is already far more energy efficient than a comparable house in the USA. We've never had "cheap" energy. The problem here is those people hit most by the energy rises are precisely those people who can't do anything you mention to help themselves. They are the tenants of low cost housing, they are those who are living paycheck to paycheck, or those in complex dwellings where insulation becomes non trivial.
Heatpumps are a great solution. One estimate said only 10% of UK houses are
Who... (Score:2)
Re: (Score:2)
i.e. names of companies
Are you talking about energy producers or their upstream suppliers? You may want to look at the cost of gas and coal. That will tell you straight away who the extra money is going to. Hint: Not the electricity producers or resellers, they are largely in the business of going bankrupt and buying / selling each other's customers in liquidation proceedings.
Re: (Score:2)
Must be that famous... (Score:2)
...cost of leaving crisis.
Energy bills predicted to rise... (Score:2)
Energy bills predicted to rise more than predicted.