Meter readings

[oddoneout]

Is this not the same as the fixed price deals that energy suppliers offer to direct debit customers? My gas price per unit is fixed for the current year, and I know that larger businesses also fix their prices well in advance. For example, the organisation I work for agrees a fixed price for its energy, usually for around three years in advance. The risk is always that the price could be high at the time you are seeking a fixed rate deal, and the fixed rate will always reflect how the energy companies predict their prices are likely to fluctuate in the future, so it may not be as cheap as the average price at the time the advance deals are being agreed. One of the main benefit for businesses in doing so is that their energy costs will be known and relatively stable for their budgeting periods. Businesses may also be able to negotiate lower prices simply because their total spend will be so high (my employer was one of the largest single users of electricity in London with an annual spend in £millions at the time I was involved in this ).

I was fortunate that my price was fixed just before the large increases started to come onto the horizon. If I'd waited a month longer, the available fixed prices would have been much higher. Of course, when my current deal ends, I will most likely have to accept a much higher price for the next year.

That was my understanding of the domestic fixed price deal. Back in the day there was an element of gamble attached in that prices could go down during the term of the deal, but even well before the current difficulties, that had stopped being a risk worth bothering about I believe - prices just didn't go down as much as they went up. Certainly my 3 year deal which ended earlier this year did have a bit of a blip in the first year but then continued with a positive price advantage.
The fixed price deal set-up for businesses, from what I have been reading and hearing recently, looks set to result in many going under, particularly the SME group apparently so beloved of government when it's trying to convince that the economy is thriving. The business sector isn't subject to a price cap and as 3 year deals come to an end quotes for new deals from October are for figures that will force many to shut down. Having come through Covid and many having to still negotiate the various fallouts from Brexit this will be the proverbial straw.
I've just seen that one company, which makes plastic milk bottles, is looking at annual electricity bills increasing from £900,000 to £6 million. If such businesses go under there is the obvious effect on jobs (and thus on benefit demands) but also effects on supply of goods.

[LHC]

That was my understanding of the domestic fixed price deal. Back in the day there was an element of gamble attached in that prices could go down during the term of the deal, but even well before the current difficulties, that had stopped being a risk worth bothering about I believe - prices just didn't go down as much as they went up. Certainly my 3 year deal which ended earlier this year did have a bit of a blip in the first year but then continued with a positive price advantage.
The fixed price deal set-up for businesses, from what I have been reading and hearing recently, looks set to result in many going under, particularly the SME group apparently so beloved of government when it's trying to convince that the economy is thriving. The business sector isn't subject to a price cap and as 3 year deals come to an end quotes for new deals from October are for figures that will force many to shut down. Having come through Covid and many having to still negotiate the various fallouts from Brexit this will be the proverbial straw.
I've just seen that one company, which makes plastic milk bottles, is looking at annual electricity bills increasing from £900,000 to £6 million. If such businesses go under there is the obvious effect on jobs (and thus on benefit demands) but also effects on supply of goods.

Somewhat ironically, a day after posting this message, I got an email from my gas supplier reassuring me that, as my fixed price deal lasts until November 2023, I won't be affected at all by the current price increases (well at least not until I need to agree a new fixed price deal next year!).

I agree with what you say about small businesses. I have also seen some of the new tariffs that restaurants and pubs are being quoted (like other businesses, also completely uncapped). They are likely to be hit two ways by the impending crisis - a massive increase in costs together with significant reductions in income as many of their customers will no longer be able to eat out or go drinking regularly. It will be worse for them than the Covid lockdowns, as there is unlikely to be any help from a Truss-led Government, and I suspect many will close.

[teamsaint]

Somewhat ironically, a day after posting this message, I got an email from my gas supplier reassuring me that, as my fixed price deal lasts until November 2023, I won't be affected at all by the current price increases (well at least not until I need to agree a new fixed price deal next year!).

I agree with what you say about small businesses. I have also seen some of the new tariffs that restaurants and pubs are being quoted (like other businesses, also completely uncapped). They are likely to be hit two ways by the impending crisis - a massive increase in costs together with significant reductions in income as many of their customers will no longer be able to eat out or go drinking regularly. It will be worse for them than the Covid lockdowns, as there is unlikely to be any help from a Truss-led Government, and I suspect many will close.

Not to mention the extra twist to the inflationary spiral that will inevitably follow.

It is hard to see any way out of the current economic mess without the radical change that seems very unlikely.

[oddoneout]

Not to mention the extra twist to the inflationary spiral that will inevitably follow.

It is hard to see any way out of the current economic mess without the radical change that seems very unlikely.

How you can have a thriving economy when business are ceasing to trade I don't know, to say nothing of the knock on effects of unemployment. There may be currently a great many vacancies in the hospitality industry but that is a sector which is going to be hit hard on several fronts so that pool of opportunity won't last for long, on top of the seasonal slowdown which will start in a few weeks time.
If hundreds of thousands default on their energy bills (and I'm not thinking solely of the Don't Pay movement) what happens then? Head in sand seems to be modus operandi these days for the government.

https://www.theguardian.com/commentisfree/picture/2022/aug/27/the-tory-response-to-the-energy-price-cap-rise-cartoon

At what point(if ever) will someone start joining the dots - bill defaults, rent arrears, unemployment, evictions - even assuming anyone has made the connections in the first place?

[Serial_Apologist]

How you can have a thriving economy when business are ceasing to trade I don't know, to say nothing of the knock on effects of unemployment. There may be currently a great many vacancies in the hospitality industry but that is a sector which is going to be hit hard on several fronts so that pool of opportunity won't last for long, on top of the seasonal slowdown which will start in a few weeks time.
If hundreds of thousands default on their energy bills (and I'm not thinking solely of the Don't Pay movement) what happens then? Head in sand seems to be modus operandi these days for the government.

https://www.theguardian.com/commentisfree/picture/2022/aug/27/the-tory-response-to-the-energy-price-cap-rise-cartoon

At what point(if ever) will someone start joining the dots - bill defaults, rent arrears, unemployment, evictions - even assuming anyone has made the connections in the first place?

And expert advisers telling people to get onto their suppliers, banks, Citizens Advice, overlook the fact that every other Tom, Dick and Harriet is doing exactly that at the same time.

[gradus]

My latest Bulb electricity bill shows that 100% of Bulb electricity is from renewable resources, why then the promised huge price hikes with no fossil fuel generating bills to cover?

[LHC]

My latest Bulb electricity bill shows that 100% of Bulb electricity is from renewable resources, why then the promised huge price hikes with no fossil fuel generating bills to cover?

'Renewable resources' includes biomass, which is burnt in power stations and will be in very high demand at the moment, and therefore commanding high prices. Furthermore, the price of all renewables (including wind as well as biomass) is dependent on the price of gas. As I understand it the overall energy price is dictated by the “last unit coming onto market", which is gas, so while the cost of wind, the cost of nuclear and the cost of solar have not changed, the entire market is based on the price on gas, even when most of the energy is not produced by burning gas.

There is an interesting article here by Dieter Helm which explains some of this, and also sets out how the energy market should be regulated in the future:

http://www.dieterhelm.co.uk/regulation/regulation/luck-is-not-an-energy-policy-the-cost-of-energy-the-price-cap-and-what-to-do-about-it/

As he says, as we move towards net zero when supply will be dominated by renewables, the energy price should "be based upon the actual costs, rather than the marginal cost of the last unit of gas-fired electricity generation".

[oddoneout]

My latest Bulb electricity bill shows that 100% of Bulb electricity is from renewable resources, why then the promised huge price hikes with no fossil fuel generating bills to cover?

What you consume in your home isn't 100% renewable though and still needs input from other sources https://www.energydashboard.co.uk/live
The price of renewables is tied to gas - so presumably someone is making a lot of money out of the current situation though?

[antongould]

Have we left the real world … ??? …. it seems that our new government, the shambles that is Ofgem and our wobbly suppliers are to cobble together in 24 days a process of loans, adjustments and/or freezes to save us from doomsday …… I would reckon that to properly design, build, test and implement this ill defined monster would take at least 18 months.
The only sensible approach IMVVHO is to up the £400 adjustment already agreed by a considerable amount … this proposal will make banks and consultants very rich which is, of course, what we all want ….

[Petrushka]

Have we left the real world … ???

We left that behind long ago. We've all lived before and on the Day of Judgement we were all sentenced to Hell.

And this is it!

[smittims]

Many younger Britons may be unaware that we used to own our own gas, and oil, and made our own electricity from our own coal. I don't recall any energy price crises then.

When it was all privatised and sold to foreign investors there were plenty of warnings that we'd be open to price rises, and here we are.

[french frank]

Many younger Britons may be unaware that we used to own our own gas, and oil, and made our own electricity from our own coal. I don't recall any energy price crises then.

When it was all privatised and sold to foreign investors there were plenty of warnings that we'd be open to price rises, and here we are.

True, but gas, oil and coal?

[oddoneout]

Domestic bills are only one part of the crisis. Commercial customers don't have a cap and the renewals that are coming through for their contracts are going to result in them closing down as things currently stand. Pubs, cafes, chippies, corner shops are all facing difficult decisions at the small end of the scale but the issues for big business involve eye watering sums. This is just one, from the Guardian today

The glass sector’s entire fuel bill for 2020 was around £212m, he adds – this year, it is projected to be over £1.3bn, for an industry whose entire value is less than £1.5bn.

Not sure how one can have a vibrant (or whatever today's adjective is) economy, given that this comes on top of all the difficulties already caused by Brexit.

[Frances_iom]

Living up to my M/B 'reputation' as a Cassandra I suggest that over the next couple of years social inequality will reach South American proportions - a relatively small but significant minority will prosper based on various funny money schemes rather than hard work (as for example have laid the basis for the fortune of many of our current MPs in property redevelopment etc ) but that the rest of the population will become equivalent to the impoverished native majority found in much of South America - Truss is a convert to the right wing and as all who have some remnant of religious background know converts are always the most ideologically pure of the pure.

[Andrew]

Many younger Britons may be unaware that we used to own our own gas, and oil, and made our own electricity from our own coal. I don't recall any energy price crises then.

When it was all privatised and sold to foreign investors there were plenty of warnings that we'd be open to price rises, and here we are.

Yes, agreed. What I don't understand (and I should add that I'm not a chemist by training!) is that car exhausts can be fitted with catalytic converters that break down many of the emissions and reduce pollutants, so is it not possible to fit an equivalent to a power station chimney? I appreciate the device would be ENORMOUS, but could not the gas be piped or taken away for processing through this converter?

In addition, when we closed our coal mines in the 1970s and 80s the coal didn't go away-it's still there! Were we to re-open the mines we wouldn't need armies of short Welshmen singing "Men of Harlech" as they travelled underground in cages; technology's moved on and robotic diggers, controlled from the surface would do the hard work. There's thousands of years of coal there, just waiting for us to invent the engineering to burn it cleanly!

Furthermore, were this energy transformation to be achieved we would no longer be at the mercy of political despots, be they Arabs or Russians!