Scottish Power becomes the 4th Energy Company to announce Price rises

[Darkwood]

not being funny, but I don't tend to just make stuff like this up.

The total volume of gas used for power generation, and the average annual unit cost of that gas paid by the power companies is a statistic that is publicly available - I was looking at it less than a week ago.

I'm pretty sure the same stats are also available for coal.

You misinterpret my meaning, yes you are right but what im saying is they don't have to disclose when they bought it and at what cost/deal they did, this is why the same old argument always surfaces; the wholesale price has gone down but we bought it in bulk last year at a higher price ..... it seems the same response everytime and could explain why fuel prices don't drop as soon as wholesale does but this means if this is the case then a rise in wholesale cost would see a delay before we felt it.... strange how this is not the case and the energy companies rise prices in line with wholesale costs but don't drop with wholesale cost without a long delay.

It would seem they rarely buy when the wholesale price is low because they never seem to drop prices unexpectedly as you would expect if bulk buying accounting for delay.

 

[Gavin A]

You misinterpret my meaning, yes you are right but what im saying is they don't have to disclose when they bought it and at what cost/deal they did, this is why the same old argument always surfaces; the wholesale price has gone down but we bought it in bulk last year at a higher price ..... it seems the same response everytime and could explain why fuel prices don't drop as soon as wholesale does but this means if this is the case then a rise in wholesale cost would see a delay before we felt it.... strange how this is not the case and the energy companies rise prices in line with wholesale costs but don't drop with wholesale cost without a long delay.

It would seem they rarely buy when the wholesale price is low because they never seem to drop prices unexpectedly as you would expect if bulk buying accounting for delay.

power producers don't buy at wholesale prices, they have a whole different category of pricing - see below from DUKES (Dukes 1_7.xls). The final figure is for 2012, so ok it's not bang up to date, but AFAIK this is the actual figure for the actual price paid in that year for the gas burnt whether supplied from a long term or short term contract..

What focusing on the base price alone of gas misses though is the proportion of electricity generated from each fuel. Last year the price rise in gas was offset to a large extent by switching a big proportion of generation from gas to coal.

This year this will inevitably reverse due to the closure of 3 x coal fired power stations in April, plus the impact of Osbournes carbon tax on coal prices in particular, so we're now feeling the 50% price increase in wholesale gas this winter that was effectively buffered by the switch from gas to coal last winter.

So it does annoy me when people almost excuse the lack of any proper detailed analysis of the situation by the press or politicians by saying that the figures don't exist - pretty much all the data you could possible want is published annually in DUKES at least to get a reasonable overall picture of the situation, though it doesn't break it down for each individual company. The problem is lack of any journalists or politicians prepared to actually do some basic research for themselves beyond reading a press release / summaries of the documents involved

 

[Earthstore]

Just a question really, does the Gas only make up a part of the energy cost, yet our bills rise by 10% ish?

Example; Diesel for your van goes up 10% so do you put your whole bills up by 10% even though all your other costs have stayed the same.IE; Admin, labour, materials ect.
Just a question, that is all...

 

[series530]

Somewhat related....

Last week I had a major clear out of old bills, bank statements, etc (all shredded, before you ask) and noticed something very interesting:

If I compare what I was paying for energy (gas and electricity) in 2009 to what I am paying today - same house, same inhabitants (although my son has now grown into a power hogging teenager), what we are paying today is almost the same as we were paying back then. I suspect that we are pretty unusual but there are a couple of interesting pointers

1. Back in 2009 we were far less energy conscious - things left on standby, halogen lights in the kitchen, kettle too full, computers always on, etc. Now we take much more care.

2. In 2011 we installed solar power and our electrical load has dropped by nearly 40% - largely by targeting when we use hungry appliances.

3. We had a new kitchen in 2010 and this necessitated a new boiler - we went for a super efficient one.

4. I built a proportional energy dump system for the immersion heater - the financial effect isn't obvious at the moment but the water is definitely being heated.

On top of that, and yes there is a huge capital investment which is not taken into account, our FIT is giving us a healthy annuity return each year and our expenditure does not take into account any of that rebate.


Interestingly also, we initiated a move from SSE dual fuel to Scottish Power about 2 months ago. The tariff put us on a variable rate but with a discount for a year or so. Both SEE and SP have put up their prices in the past week or so but SP have told us that our price will not be increased above the rate that was agreed when we changed contracts. So, we get our discount and shielding from price increases until next September (at which time, just like with car and home insurance, I will be off to the price comparison sites again).

I take the same cynical view as everyone else about price hike and politics, but it demonstrates to me that a few simple things, which may not cost the earth, can have a very positive affect upon the cost of energy in the average household.

 

[Worcester]

(at which time, .. I will be off to the price comparison sites again).

Don't just consider those that you can 'Switch to now" - in that case, they almost always miss Cheapest Electricity Suppliers - Electricity Providers UK | iSupplyEnergy which doesn't pay any commissions to comparison sites and so often isn't listed. We'cve been monitoring their 12months fixed prices and for use they have been consistently the lowest for over 12 month now.

 

[series530]

Don't just consider those that you can 'Switch to now" - in that case, they almost always miss Cheapest Electricity Suppliers - Electricity Providers UK | iSupplyEnergy which doesn't pay any commissions to comparison sites and so often isn't listed. We'cve been monitoring their 12months fixed prices and for use they have been consistently the lowest for over 12 month now.

Good point - and easily missed. I've book marked them for later. Thanks

 

[Darkwood]

power producers don't buy at wholesale prices, they have a whole different category of pricing - see below from DUKES (Dukes 1_7.xls). The final figure is for 2012, so ok it's not bang up to date, but AFAIK this is the actual figure for the actual price paid in that year for the gas burnt whether supplied from a long term or short term contract..

What focusing on the base price alone of gas misses though is the proportion of electricity generated from each fuel. Last year the price rise in gas was offset to a large extent by switching a big proportion of generation from gas to coal.

This year this will inevitably reverse due to the closure of 3 x coal fired power stations in April, plus the impact of Osbournes carbon tax on coal prices in particular, so we're now feeling the 50% price increase in wholesale gas this winter that was effectively buffered by the switch from gas to coal last winter.

So it does annoy me when people almost excuse the lack of any proper detailed analysis of the situation by the press or politicians by saying that the figures don't exist - pretty much all the data you could possible want is published annually in DUKES at least to get a reasonable overall picture of the situation, though it doesn't break it down for each individual company. The problem is lack of any journalists or politicians prepared to actually do some basic research for themselves beyond reading a press release / summaries of the documents involved

Im not quoting press/tabloid releases im quoting independent released investigations into the big 6 companies and at present we have a massive conflict of interest of energy companies in charge of both generation and sale of our energy, this leads to a designer smokescreen when trying to establish what was payed for when and how much... as i said before it is of no advantage knowing the price of oil gas or coal etc on any specific date if the energy companies do not have to reveal when how much and at what cost they bought it... transparency is key here and until they are forced to disclose this info we have to belief all the crap they feed us... why are energy bosses getting 36% pay-rises hitting pay zones of 2.5million when their customers can't afford to even use the energy... yes they say they froze staff pay in line with the rest of the uk but strange how each year bonuses have shot up to somewhat bridge the gap.


Watch debate (on now) - hard questioning from the energy and climate commitee - with all the big energy companies and the hard questions they are having to answer TBH their responses are not good they are really struggling to justify things... its even made worse when a small supplier has openly revealed I.E. been transparent and said the wholesale price of energy has stayed roughly the same for a number of yrs... now you should have seen the big suppliers faces to that statement... i can see change coming hard and fast its all pointing to collusion between the big firms although this can be hard to prove. So answer me this how can a small Energy supplier reveal their costs giving full transparency and make what the big 6 suppliers are saying look like a lot of hot air.

 

[Gavin A]

The wholesale price has been below the break even price for gas generation from a lot of the gas operators for much of the time - it's been depressed by the availability of dirt cheap coal from the USA, along with many of the coal plant operators deciding to use up as much of their remaining operating hours as possible prior to the carbon tax introduction.

3 GW of this cheap coal generation that was running fult tilt last winter has been closed down this year, with higher costs gas generation needing to take its place.

Therefore either the wholesale prices will need to rise significantly this winter, or the gas operators won't supply the extra generation capacity needed and the lights will go off.

Yes the energy companies ended up banking big profits on last years rises because the wholesale prices didn't go up in line with the gas price rises as they'd expected it to, but this winter it pretty much has to as the coal generation capacity has been reduced by over 10%, and what coal generation there is will be around 10% more expensive due to the imposition of the carbon tax.

I'm in no way excusing the energy companies profiteering, just pointing out that there actually are genuine underlying reasons why wholesale prices really do have to rise this year even if they didn't particularly last year.