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Gas and Electricity Prices.

(33 Posts)
crimson Fri 12-Oct-12 21:51:18

Going up again. Doesn't seem to be a reason for it [other than the shareholders are still getting their profits]. I get more and more angry each time it happens. I mean, we can't even vote with our feet and it always happens just as the weather is getting colder. People aren't getting much in the way of payrises, so where is the money coming from. I actually feel like picking up my placard and marching somewhere/anywhere.

JessM Sat 13-Oct-12 08:27:14

I think there are several reasons crimson - one is investing in the network. This may mean building gas terminals and pipelines? We will be having to import more (russian) gas. We also need more power stations to replace old ones, and we will have to pay for that one way or another over the next 10 years. It inevitably feeds through to bills.
The other is an obligation put on energy companies by the government to promote energy efficiency. (I always find it a little amusing that they are obliged by law to spend some of the money they collect on encouraging reduced use of their product. ) Instead of the government funding energy efficiency out of taxation. This is because, left to our own devices, we are not that willing to make energy improvements to our homes - which are still very poor in this regard (compared to e.g. Germany)
This is why energy companies subsidise new boilers, loft insulation etc.
There is a new ECO scheme coming in about now, that is obliged to improve energy efficiency in certain targeted areas.
Energy prices rise and of course a % of customers do not pay their bills, a cost which falls on other customers.
The other reason, and it is just one is that the companies were privatised by the tories and therefore owned by shareholders, who have to be given some dividend. This is a legacy that we are stuck with. However due to the ECO obligation and the cost of customer interaction they are continually looking for new ways to be more profitable - the top responsibility of directors is to "create shareholder value"
Ed Milliband says he would try to reduce bills but this will be a tough job!
Many environmentalists argue that our energy is too cheap in this country and that if it was more expensive we would not waste such a huge amount of it.

absentgrana Sat 13-Oct-12 08:33:05

The whole point of shareholders was to fund capital projects. Well that one's gone right out the window. Users now have to fund capital projects – shareholders just receive dividends. It's unsustainable and the whole house of cards will collapse in due course. Meanwhile, energy users are just cash cows.

JessM Sat 13-Oct-12 09:16:17

Well I guess the argument is, absent that when you buy shares you lend some of your money to the company in the hope that either the share value will increase over time or that the annual dividend will yield a return on your money. So the directors are entrusted will this money to run the company and/or invest. If they need more money to invest than they have in their bank account they have few choices - issue more shares at a risk of decreasing share value, borrow it or raise more money from the business.
When I was working for Water Co. I could see that "investment in the infrastructure" was somewhat different in that industry than the normal meaning of "investment". At it's simplest:
a/ building a new factory, so you can sell more products
b/ replacing 100 year old corroded mains so that you can meet EU legislation and the demands of the regulator.You did not make money by doing this. It was a straight cost.
Very different.
I do not know enough about the ins and outs of the energy industry to know how much of 1 and how much of 2 is meant when they say "investment" but I think a lot of it goes into making sure that there is going to be continuity of supply on 5 or 10 years time.

Lilygran Sat 13-Oct-12 10:08:53

BritishGas man on Today yesterday claimed 23% PROFIT last year wasn't enough to allow them to invest in the infrastructure. They are forced to put up prices. And now the other energy companies are following. BG man said it was our fault if the bills are high for not taking advantage of their free insulation offer. We live an an old house, no two of the windows are the same shape, cost of double glazing would buy a modern flat; walls not suitable for cavity wall insulation. We have loft insulation.

JessM Sat 13-Oct-12 10:15:00

I agree it was not a very good interview.
And also agree that so many UK houses are hard to improve. Double glazing is expensive and therefore does not pay back the householder's investment for years and years. It is not therefore popular with the energy efficiency industry.

Not sure what 23% profit means - 23% of what? Do you mean increase in profit?

absentgrana Sat 13-Oct-12 10:17:56

JessM It was a 23% increase in profit in the last six months, I think. Nice work if you can get it.

crimson Sat 13-Oct-12 14:08:41

I've got an article about it somewhere [if I can find it amongst the mess that is my computer room]. Saying that the energy companies work together to keep prices us [a cartel they called it].

crimson Sat 13-Oct-12 14:09:05

Reminds me of 'Dallas'!

crimson Sat 13-Oct-12 14:12:43

And the price of wholesale gas is cheaper than it was last year, so why the huge increase?

Lilygran Sat 13-Oct-12 14:26:18

BGas man said because energy prices fluctuate, they have to keep them level. Jess heard it as well so she may not have been shouting at the radio too loud to hear exactly what he said.

FlicketyB Sat 13-Oct-12 18:02:31

Over the next two years most of the coal-fired power stations in Europe, including the UK, will close, an EC directive stops them continuing after 2015. This is of course good for the environment but bad for meeting energy demand.

The quickest and easiest way to get new capacity online is to build gas-fired power stations. Unfortunately almost every country in the world is aware of this so gas is more and more in demand as coal is used less and less. This drives up the wholesale price of gas. This is something the gas companies have no control over.

As Jess has said the energy suppliers have a requirement to invest in renewables, even though, currently, the cost of the power generated by wind turbines, photovoltaics etc far exceeds the price for which it can be sold and these renewable sources are generally in areas where, because there are no power stations, there are no grid connections nearby. This means a major investment in major extensions of the National Grid into the more remote areas of England, Scotland and Wales, over mountains, through National Parks and AONBs. The cost of investing in renewables is high and restricts funds available for investing in other more efficient and reliable sources of power, which are needed for when the wind don't blow and the sun don't shine (like every night). The situation in the energy market is not unlike the problem with food this year. Worldwide there seem to have been poor harvests. So with less food to go round and as many people to feed prices rise.

FlicketyB Sat 13-Oct-12 18:23:11

Part 2 because it is on a different subject. I, like many others, live in an old house, 1467 to be precise. The house is listed so we have restrictions over what we can do. Nevertheless over the last 12 years we have succeeded in halving our fuel consumption. Our fuel bills for a house at least twice the size of the average semi is barely £100 more.

We have done it by taking our loft insulation up to the maximum allowed, but also by dry-lining the inside of about half our exterior walls. British Gas have said that their current insulation offer includes internal drylining insulation for solid walls as well as cavity insulation. We have also put in some internal double glazing. Nothing expensive or complicated, just sheets of glass or acrylic cut to size and clipped on to the existing wood frame with the a strip of foam insulation to make them air tight. We have thermostatic radiator valves in most rooms and turn them off/down when not in use. All my curtains have thermal linings and get shut as soon as the lights go on. We have also had new boilers, which was expensive but most of this work has been done slowly bit by bit over 12 years.

I am often puzzled by the fuel bills quoted on radio programmes of people living in small Housing Association and Council property, which are generally well insulated yet quotefuel bills far in excess of ours

JessM Sat 13-Oct-12 18:35:13

Congratulations flicketyb you deserve a medal for efforts to reduce your fuel consumption. Also - I wonder if you have the oldest house of anyone on GN.
That is pre-tudor is it not?
New boilers are often a good way forward and BG or others may be able to help towards cost as part of their "obligation".

FlicketyB Tue 16-Oct-12 17:23:25

Yes, it is. Our neighbour is older. Our party wall dates to 1299. We were originally told it was late 16th century, which is Tudor, but tree-ring dating took us back to 1467. That is Edward IV and the Wars of the Roses. Local researchers have also found out who built it!

crimson Tue 16-Oct-12 18:08:24

Another thing that concerns me is our [soon to be] total dependance on outside suppliers for all of the energy in this country. I'd've thought that was an issue of national security. As for Britsh Gas, I haven't forgiven them for overcharging me for years for my fuel [my fault for not switching but everytime I did a switch it didn't work] and they quoted me £1,000 more than everyone else to replace my heating system [well, £2,000 more than most]. Don't trust them. However, TalkTalk are taking up all my time/energy at the moment. It's very tiring being 'Mrs Angry of somewherewestofderby'.

JessM Tue 16-Oct-12 18:50:12

I assume stone built in the main f?
Yes you are right crimson successive governments have been completely wimpy on energy supply.
Trouble is anything you do in terms of electricity is controversial.
Coal fired power stations - too much carbon and nobody wants massive cooling towers in their constituency
Nuclear - as for coal, plus anti nuclear lobby. And costs a fortune and takes an age to build
Hydro - you have to flood valleys, build dams etc - more planning protests, this time in the hilly bits. And we really are a bit short of massive rivers with plenty of drop on them that can be damned.
Wind farms - an outcry in the shires! Unsightly blots upon the landscape!
Photovoltaics - a sudden surge of interest nipped in the bud when the current government cut the subsidy too fast and too soon.
And of course we have squandered vast amounts north sea gas heating energy inefficient homes. Do politicians want to pressure people into insulating homes. No they do not. They will not even pass a building regulation that makes strict energy efficiency requirements for extensions (similar to new homes). Don't want to upset builders.
They could do things like a reduction of stamp duty when homes that are at a high level of energy efficiency are sold. ANd stuff. But do they?
The current lot have cobbled together a scheme to "encourage" insulation that is so complicated i have doubts whether it will ever get off the ground.

crimson Tue 16-Oct-12 19:26:30

On the Culture Show architecture programme last week [the one that had the carbuncle prize in it] it mentioned self build housing schemes, and one house needed hardly any heat putting into it [although it did seem to be made of sawdust or something, which worried me a bit]. Seems there are quite a lot of self build projects going on. [If I'm repeating myself it's because I wrote about it somewhere yesterday but it seemed to disappear into cyberspace; perhaps the British Gas cyberpolice are watching me; not that I'm paranoid]. One proudly said they had a childrens playground and a pond; I felt the two shouldn't really go together. Anyway, they were all far more energy efficient and forward thinking than yer runofthemill new estate type build. My house is uberinsulated. However, the new boiler system which caused the leak has soaked my loft insulation which is between the floorboards in the loft and upstairs ceiling. I've now got the heating on high, dehumidifiers running 24/7 all over the house, and the door into the loft open to get some heat up into it. I was about to batten down the hatches loftwise to keep the heat in when the big drip started. Hence me being disgruntled at the news of the latest price rise. The timing was not good sad.

gillybob Wed 17-Oct-12 10:50:27

This news has really scared me. I remember a debate running last year about Electricity/gas prices and together with the fairness of the Winter Fuel Allowance benefit.

Speaking personally I despair as to how my son and DIL will be able to keep the children warm this winter. They have dreaded pre-payment meters and so no money equals no light, heat, TV or warm food.

crimson Wed 17-Oct-12 10:59:20

That's the problem; it's the one thing that we can't do without. That and petrol. I understand that The Co-op are talking about becoming energy suppliers. If they do I'll switch to them. I'm doing everything I can to take semi retirement next year; I'll be on a rather low income which, although it may be related to inflation won't cover increases way above the rate of inflation. Also, the more money I spend on petrol/energy the less I'll have to buy things, therefore it will filter down to shops and garden centres; even days out will have to be seriously considered. I was banking on the winter fuel allowance next year, along with a bus pass. I live in a village so have to run a car, so I can't cut back on that either, but would love to use the bus for, say a trip into town or even Leicester, which is as far as our local bus goes.

gillybob Wed 17-Oct-12 11:05:56

........and lets not forget the 5% the government add on to the already unbearable prices. Since when was keeping warm,eating hot food etc. considered to be a luxury?

I remember as a child sitting huddled in a blanket with ice on the inside of the windows. It didn't do me any harm but do we want that for our grandchildren in 2012 ?? angry

crimson Wed 17-Oct-12 11:17:28

I do understand the arguements re the price increases; what I don't understand is how accepting the public have become when they occur. Almost as if we're so used to it now we just go along with it. No harm in writing letter and sending emails questioning where they get their figures from. It always sets off alarm bells with me when shareholders are involved.

FlicketyB Wed 17-Oct-12 17:09:36

JessM, no, timber frame with wattle and daub or brick. the brick is only one brick thick so some bed rooms used to be almost unuseable in winter until we drylined the walls.

Like everyone we are going to have to take big breath and plan when our fuel bills come in, but we will also hope to keep improving our insulation. More internal double glazing and seeing if the Local Authority will allow us to replace the single glazed window in our 1960s extension with professional double glazed windows.

But even as people worry about fuel bills I am amazed to see how few people shut their curtains at night, or have properly lined curtains, or even have have long life bulbs and how many seem to have every light on in the house all the time.

On the lighting front LED bulbs are replacing 'traditional' low energy bulbs. Our study and kitchen are both lit by two 3 spotlight bars, 6 bulbs in all. 10 years ago we had traditional 60 watt bulbs in them. When the study lights were on, and our study lights are on most of the time as the room is dark and we spend a lot of time there, they were consuming 360 watts of energy. We replaced them with 14 watt fluorescent bulbs, bringing consumption down to 84 watts. They are now being replaced by 4 watt LED bulbs, which brings total energy consumption for those rooms for lighting down to 24 watts, a 67% reduction in energy consumption on lighting over 10 years.

Like when the low energy bulbs came in LED bulbs can be quite expensive at the moment, although the new bulbs for our spots were only about £3.00 each. The range available is also limited. We have a lot of candle bulbs in our house and there are no satisfactory LED candle bulbs for most of these, and the ones that are available are about to £15.00 each so we wont be buying those, but over the next two or three years they also should come down in price and their range will extend. Although our electricity bills will not go down by two thirds when we have LEDs everywhere it should bring our electricity bill down by 10 - 20%

crimson Wed 17-Oct-12 17:52:07

I've just put up new, thick, lined curtains in my living room [it's one of those ugly houses with huge windows], so imagine how I felt when the house started to develop leaks sad. Thankfully the living room was unaffected. I now draw them every night, along with having wooden blinds under the main window. Always thought shutters were a great idea [and look nice, too]. And, of course, people leave so many things on standby, but I think new electrical items are made different these days because of that [?]. I turn everything off but dread to think how much my computer costs energy wise to leave on all day when I'm in. [Don't tell me!]

FlicketyB Wed 17-Oct-12 18:05:42

I think computers use very little energy relatively speaking, about 1 unit every 3 or 4 hours. It is the washing machines, dishwashers, tumble dryers, electric cookers, lighting and electric showers that are the big consumers.