Energy Price Increase

[CookipediaChef]

Sell the Lotus?

[iainpeden]

Go on strike seems to be the current answer.

Seriously though, it will certainly be a major problem for many and I reckon the government needs to get its collective finger out very quickly.

With regard to the constant doom mongering by the media; while they certainly have a responsibility to keep people up to date with developments they should also not be winding up the situation. and making it even worse by scaring people before additional support mechanisms are in place.

Personally, I got a very good fixed rate two years ago until the end of August '23 but I am keeping a very close eye on our energy use, recording monthly and calculating our average daily usage - which for the 38 days up until 10th August worked out at £1.52 including standing charges.

What is needed is good support for small business.

An additional thought - as the price of gas is based on a global wholesale price and the UK produces about half its own requirements why can't we just get that 50% for the production cost (plus reasonable profit for developments) not the hyper inflated cost globally?

[mustang5861]

I think the government should call a Cobra Meeting classify it as a National Disaster and find a solution to Stop any hike in everyone's bills.

Sounds suspiciously like a case of joined-up thinking to me, so it'll never happen...

[raptor9]

Very pleased I have had Solar Panels for the last eight years!!. Seriously though, as IP intimates, the Press are maybe overstating the possible hardship. It is always possible in a lot of cases to make savings. Even now, although I don't have financial problems,we don't have unnecessary lights on, if making a cup of tea, don't put too much water in the kettle, etc., I don't know if switching off 'standbys' on televisions or computers is worth it. Perhaps someone will tell me?. I am sure that the Government will deal with extreme hardship. I have a lot of sympathy with people who really will be struggling but we have to wait and see. Plans will be shortly revealed. Sometimes it's not the Governments fault that people are short of money. I'm afraid that some of the problems will have been caused by people maxing out on credit cards, buying things that they can't afford. Some of us are of the generation that said 'if you can't pay for it now, then don't buy it until you can'

[iainpeden]

Latest “real life” figures I have come across are that boiling a kettle costs 10p and a PC costs just over £1 per day to run - mine now goes on when I need it not on first thing and shut down before bed.

I’m just working out some figures for my daughter so we can compare house running costs and do some predictions for her for the winter.

Lotus - one solution for the future would be for the mob in power to mandate that all new homes should have solar panels.

[raptor9]

Agree about new houses and solar panels. It will put the price of the house up, inevitably, but by a miniscule amount compared with the cost of the house. I have just had a payment of £382 for electricity that I fed into the National Grid. That was for the last three month period for power that was generated that I haven't used, and I also get free hot water. It is an absolute must to have these fitted in the future!!!. Makes approx £1,000 per annum. There are cheaper systems that use a couple of panels to heat water only. Good idea!. Virtually every house I see in the Canaries has those.

[Malcolm]

An additional thought - as the price of gas is based on a global wholesale price and the UK produces about half its own requirements why can't we just get that 50% for the production cost (plus reasonable profit for developments) not the hyper inflated cost globally?

Because "the UK" does not own the oil and gas that is extracted from under the sea or ground. The UK govt has licenced (charged) various oil and gas companies to extract the stuff - people like Shell, BP, Exxon, Mobil etc, and those companies own the oil and gas they extract not "the UK". Those companies are then selling it at whatever the market rate is, in effect to the highest bidder. The Govt does tax the oil/gas companies based on the amount they sell, but the Govt does not own the gas and so has limited control over who it is sold to and at what price.

What you are missing is that there is a 'cost' of producing something, and then there is a 'price' when that something is sold. The price and the cost are not related, except in so far as the price must be more that all the costs added together otherwise the company goes bust. If Casio can sell a wrist watch for £5 does it really cost Rolex £10000 more? Of course not, Rolex are selling expensive watches because people are prepared to pay that much for them, not because they cost that much to make. Supply and demand sets the sale price for oil & gas.

To do what you are proposing would effectively require nationalizing Shell/BP et all - forcing them to sell to the UK at cost plus. Might happen in Russia, China, North Korea and the communist republic of Jockistan (if Comrade Nicola gets her way). Won't happen in the UK.

[jpickers56]

Very pleased I have had Solar Panels for the last eight years!!. Seriously though, as IP intimates, the Press are maybe overstating the possible hardship. It is always possible in a lot of cases to make savings. Even now, although I don't have financial problems,we don't have unnecessary lights on, if making a cup of tea, don't put too much water in the kettle, etc., I don't know if switching off 'standbys' on televisions or computers is worth it. Perhaps someone will tell me?. I am sure that the Government will deal with extreme hardship. I have a lot of sympathy with people who really will be struggling but we have to wait and see. Plans will be shortly revealed. Sometimes it's not the Governments fault that people are short of money. I'm afraid that some of the problems will have been caused by people maxing out on credit cards, buying things that they can't afford. Some of us are of the generation that said 'if you can't pay for it now, then don't buy it until you can'

I agree with raptor9 that there are many ways to make savings in times of financial difficulties, there is no getting away from it that we are paying very much more for our energy. Some of the younger generations have expectations ( I have two of my own both in their 30's) and are used to a certain standard of life that my generation (I am in my 60's) just did not have growing up in the 1960's and 1970's, I don't recall the Government then throwing money at us to help with mortgage interest rates of 13%. It is taken for granted that mobile phones, nice cars ( I had an old banger) Netflix subscriptions, gaming stations, new household items not second hand, holidays abroad and take away meals are all part of daily life and these come at some monthly expense. A mobile phone can cost as little as £10 per month but most will have I-Phones or similar and think nothing of contracts costing £60-70 monthly. And as raptor9 mentions maxing out their credit cards so they are forever in debt.
It is great having this lifestyle don't get me wrong if you can afford to do so, but many cannot, they live beyond their means and do not get their financial priorities right and therefore struggle and expect someone to bale them out.
The plus side is there are plenty of full and part time job vacancies available to people who are finding it hard so they can increase their income to pay for these luxuries.
However I do agree that those most in need should be supported by the Government.

[raptor9]

Good post. I am 80 in 5 weeks time, and have everything I need by being careful with finances, and working 65 hours a week in my own little business for 39 years. The newer generation, as the previous poster says, are perhaps a little too soft!. They expect everything, and now expect other people to pay for it. Not tarring everybody with the same brush here. In our younger days, expectations were lower, but life was great without much money. and.perhaps, rather more enjoyable!! This hardship I regard as being relatively short term, perhaps 18 months or so. EVERYONE, including strikers!! should realise that the Government and businesses are not an endless money pit, and we should all work together, instead of being more demanding all the time.

[Philly1971]

It’s such a shame that in the wholesale energy markets, it’s the highest priced cost that sets the price for all production. Costs for renewable and nuclear energy production haven’t gone up, and yet it makes no difference to our bills, they get to sell their electricity at the same price as gas produced electricity. It seems like a potential missed opportunity for all those that have doubted alternative energy, in that we could be telling people how much cheaper their bills are because of this power, plus of course, it’s generated by us, and not reliant on global markets or other countries? I am sure I once read we are amongst the windiest countries in the world ( all those curries!) plus have the 2nd highest tidal range, and the constant Gulf Stream powering past, and so there could be so much more we could do to generate our own alternative electricity going forward, with no competition from other countries buying the same product.

[paddyboy]

John & John

I’m almost 70 and started married life with everything 2nd hand except a new twin-tub washing machine

13 yr old Moggie thou for transport to get to work and no holidays, let alone foreign ones

As you both say, certain things are expected by certain people and those concerned are now going to have to do what we all did: cut their cloth according to their purse

Glad we’ve got a roof covered in solar panels as well

[raptor9]

Debt is the really big problem here, and possibly shows the main difference in generations. In the old days, we always thought about 'rainy day money', and what would happen in a crisis. Therefore we saved. Modern times,seems to be live for the present and don't worry about the future!. It's now come to bite you in the ass!. So, because some people have done this, the Government is expected to use our money to bail you out!. Now I am aware that, despite working hard, and maybe being sensible, it will leave some people hard up, and help will be available for those people. Lack of foresight is going to cause a big problem for some people, and it is their fault!. We older one's also have to think about care when we get older and perhaps health fails. Therefore, again, that is what we saved for. I don't expect you, or the Government to look after us in our old age. We have provided for it by not buying new cars every three years, [my car is an 11 year old Fiesta, but we can buy a new Ferrari tomorrow but we won't of course!] not running up credit card debt and not trying to impress the neighbours with a false rich image. Sometimes it seems to me that the older generation is looked down on by the youngsters as being a drain on society, N.H.S etc. but we had one thing in common over a lot of them. It was called common sense. I have much sympathy for my fellow man, even if it doesn't show here sometimes!!. I know of someone who actually sold his house in order to buy a Ferrari!!. How stupid can you get!!.

[iainpeden]

I retired this year after 50 years in the building Industry, cashed in a very small pension that cleared some debts, now on a basic gov pension eqv to unemployemnet benefit (I have been told) anyway I worked out if our energy goes up to £700 a month - thats more then the money we have coming in, and on pre payemnet meters - there is nothing we can do, we already monitor our energy and only use it for short times we have no central heating on for 9 moonths of the year and then only have it on ofr a short term to warm the place.
How can someone like myself and partner and others be forced into this situation with nothing we can do.

Hi Lotus.
A couple of thoughts.
First, you have obviously contributed to the system throughout your working life; now make sure it's helping you in a time of need.

I'd say have a chat with Citizens Advice Bureau to make sure you are getting all the benefits you're entitled to.

I'd also steer you towards the food banks. My wife volunteers at the local one and they are getting busier by the week. They are not there for people week 0n week but can be accessed in an emergency - I think the official line by the Trussel Trust is 3 times in a 6 month period but that would be 3 weeks food for the two of you. If you need help accessing one feel free to pm me and I'll steer you towards the right people.

Food banks are running out of food - I'd ask anybody who can contribute to do so - our local supermarket have ready packed bags which can be collectred, paid for with the usual shop and then put in the collection baskets.

Also - anybody having difficulty meeting fuel bills needs to get in touch with their supplier asap as the suppliers have a legal duty to help.

In this day and age, in the 6th richest country in the world, how on earth has our "mob in charge" (i won't use the word government) got us to this over the last 12 years.

[Malcolm]

It’s such a shame that in the wholesale energy markets, it’s the highest priced cost that sets the price for all production. Costs for renewable and nuclear energy production haven’t gone up, and yet it makes no difference to our bills, they get to sell their electricity at the same price as gas produced electricity.

That isn't how it works. Google "Strike Price". Basically....

When new power stations and wind farms are approved, the companies agree a price with the Govt - called the Strike price. This is the price that the govt guarantees it will pay the company for electricity come hell or high water. You may remember the fuss when the Govt agreed to pay EDF 9.15p/KWh for Hinkley Point C electricity. This was double the typical cost of electricity from other sources in 2012, but is looking like a bit of a bargain now.

However, this isn't the same as the price the electricity is actually sold for. If the Generating company sells the leccy for less than the agreed strike price, then the govt tops up the price (subsidizes) to the strike price. This is how most early wind farms were funded - it cost them more to generate the leccy than they could charge for it on the open market, so they were effectively subsidized by the govt.

However, now the generating companies are selling the leccy for (much) more than the strike price, the excess above the strike price is paid to the govt*. For most (non gas) power generation the govt is now raking money in. The question that remains to be answered is what the (new Sunak/Truss) govt is going to do with this money.

*Technically the Low Carbon Contracts Company (the company administering the scheme) - but the Govt set the rules on what the LCCC can do with the money they rake in.

[C24]

Time for a re-think on life??
Well, Time is free and can be used to improve our lot in life.
Energy price is increasing so we can reduce the impact by not buying so much, taking action to live without it to a greater extent. The reduction in demand will register with the Sellers.

Small changes in lifestyle can make a difference.
A mug of tea for two can easily be made with one teabag if teapot/jug is used.
Food of a nourishing kind - porridge, full cream milk and a spot of jam makes for a sound breakfast.
Use a pressure cooker to vastly reduce cooking cost for stews and puddings.
The balance of water in a just boiled kettle can be saved in a vacuum flask and used towards the next hot drink.
Set the hot water to heat overnight using the lower tariff.
Turn off all radiators in rooms not in use.
Add a blanket to the bed.
Wear a sweater and other layers before turning on a room heater.
Booze, fags, smartphones and satellite TV aren't essentials.
Changing the way we approach life in 2022/3 using the brains that can before our teeth should help.
Ask not what your Country can do for you, etc.

Good luck from a WW2 baby.