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Green Building Bible, Fourth Edition
Green Building Bible, fourth edition (both books)
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Politics: VAT on insulation, microgeneration, etc.

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    • CommentAuthorEd Davies
    • CommentTimeJun 22nd 2012
     
    Apparently the EC is telling the UK to increase the rates of VAT on insulation, etc:

    http://www.utilityweek.co.uk/news/news_story.asp?id=197047&title=Brussels+tells+UK+to+up+VAT+on+energy+saving+materials+or+face+Court+of+Justice

    If it'll mean that VAT on insulation will be higher than VAT on energy then I'd regard that as being a tad counter-productive. Well, barking, really.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 22nd 2012
     
    Not so sure it will as other market forces come into play.
    Be better to increase the VAT on domestic fuel.
    •  
      CommentAuthorDamonHD
    • CommentTimeJun 22nd 2012
     
    Yes, I fear that the answer is to bump up domestic fuel VAT, but that would be politically very very hard I think.

    Rgds

    Damon
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 22nd 2012 edited
     
    What I want to know is, if, as all the doomsayers have claimed is true, why is energy not more expensive already, seems to me that prices fluctuate a bit but trend to a normal market price. Are we getting unit price and consumption muddled in the UK?

    I have seen energy price inflation quoted at 15%/year, well that is a nonsense as it would not take many years until your energy bill is higher than your income.

    Just done a quick calculation and at 15% energy increase and 2% wage increase per annum it would take 25 years.
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    I believe energy price inflation has averaged around 9% a year for the last decade or so in the UK.

    Personally I reckon it will carry on at about that rate for another 10 years or so, until we reach the point of the vast majority of our gas being imported, at which point the annual rate of increase ought to stabilise at around the rate of increase for world gas prices.

    Our gas prices are currently about the cheapest in the EU other than those Eastern countries who have historic low price agreements with Russia in exchange for allowing Russian gas pipelines to transit the countries to supply the rest of Europe.

    These prices will inevitably have to tend towards the European average as we'll increasingly be competing directly with these countries for Russian & Norwegian gas along with others all over the world for LNG.

    This factor alone has been the overwhelming driving force in both gas and electricity price increases in the UK over the last decade or so.

    So, I agree that 15% per year is far too high for a long term forecast, and even using the recent trend is probably an over-estimate if you're looking further than 2020 or so, but significantly above inflation energy price increases for at least the next generation or so are a virtual certainty.

    How rapid the increases are, along with how much impact they'll have are largely down to how rapidly we can reduce consumption levels in the UK, along with factors such as whether we start burning more coal again if it's cheaper than gas again (which currently seems to be what's happening).
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    EU gas price comparison figures http://www.energy.eu/
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 22nd 2012
     
    If Gas prices are at 5p/kWh today, then 10 years ago they would have been a nats under tuppence, Electricity at 18p would be 7p.

    EU Portals says we are paying € 0.0465 (£0.0375) for gas, so that would have been £0.0146/kWh ten years ago if fuel inflation had been 9%pa
    At 2%, it would have been £0.306p/kWh, which seems about right to me.
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    I've got it slightly wrong in that it was only around 2004-5 that the gas prices started rising at that rate, but they've doubled since then in real terms according to DECC.

    page 10 http://www.decc.gov.uk/assets/decc/11/stats/publications/qep/4777-qep-mar12.pdf
    •  
      CommentAuthorDamonHD
    • CommentTimeJun 22nd 2012
     
    And just how amazing is it that we have all this definitive data at our fingertips so that we can argue the toss? I think it's grand!

    Rgds

    Damon
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 22nd 2012
     
    I can only really say what my prices have done over the last 7 years, and they have not gone up as much as inflation, so are now cheaper.
    Shall have a look at that document later, it has a lot of stuff in it.
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    or in actual straight pence per kWh terms, the price of gas now stands at 275% of the price in April 2004.


    data in downloadable excel format here http://www.decc.gov.uk/publications/basket.aspx?filepath=statistics%2fsource%2fprices%2fqep213.xls&filetype=4&minwidth=true#basket

    I worked the percentage figures out myself from the data in the tables.
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    I'll dig out some old fuel bills when I get home, but I'm sure I remember gas being significantly under 3p a kWh not that long ago, which would seem to bear out those sort of stats.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 22nd 2012 edited
     
    Posted By: Gavin_AI worked the percentage figures out myself from the data in the tables.

    How, there are a couple of 3 ways to work it out, how did you do the rounding, how does DECC do it for that matter. Too late to look at it closely now, be fun though.
    I wonder if they take standing charges into account, they take the VAT change.
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012
     
    <blockquote><cite>Posted By: DamonHD</cite>And just how amazing is it that we have all this definitive data at our fingertips so that we can argue the toss? I think it's grand!

    Rgds

    Damon</blockquote>
    true.

    made a lot easier because we actually researched this in some detail a couple of years ago when trying to work out what was a realistic rate of increase for fuel prices to use in our 25 year payback calculations.

    I feel a blog post coming on.
    • CommentAuthorEd Davies
    • CommentTimeJun 22nd 2012
     
    My electricity prices. Pence per unit. Dates are bills with new rates except for later ones where it's the actual month of the rate change.

    Southern Electric:
    1984 Aug 4.900 + No VAT
    1985 Aug 5.070
    1986 Aug 5.360
    1987 Feb 5.090
    1988 Aug 5.700
    1989 Nov 6.040
    1990 Aug 6.590
    1990 May 6.040
    1990 Nov 6.590
    1991 Aug 7.330
    1992 Aug 7.490
    1993 Nov 7.270
    1994 Feb 7.170
    1994 May 7.170 + 8% VAT
    1995 Aug 7.000
    1996 Nov 6.720
    1997 Jul 6.160
    1997 Nov 6.160 + 5% VAT
    1998 Aug 6.040
    Independent Energy:
    2000 Mar 5.350
    2000 Sept 5.200
    npower
    2001 Mar 5.200
    2001 Aug 4.630
    2001 Nov 4.770
    2003 Aug 10.190 / 5.910 (£13.41/quarter standing charge gone, first is on first 182 units)
    2003 Nov 10.600 / 6.140
    2004 Aug 12.650 / 6.140
    2005 Feb 13.700 / 6.140
    2006 Feb 15.530 / 7.200
    2006 May 17.780 / 8.240
    2006 Nov 19.540 / 9.060
    2007 May 17.400 / 8.440
    2008 Jan 12.060 / 11.510
    2009 Feb 14.570 / 13.900
    2009 Mar 13.190 / 12.580

    Originally posted here:

    http://www.navitron.org.uk/forum/index.php?topic=12348.0#subject_135989
    • CommentAuthorGavin_A
    • CommentTimeJun 22nd 2012 edited
     
    I can't find a gas bill, but Npower were charging 6.45p per kWh for their main units at the end of 2003 vs about 14.4p now.

    eta - so that's current prices being 223% of prices at the end of 2003.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 23rd 2012
     
    If it has gone up 7.95p, isn't that a 123% increase on the 2003 price or you are double counting the base price, this one has always confused me :confused:
    • CommentAuthorEd Davies
    • CommentTimeJun 23rd 2012 edited
     
    Being 223% of end 2003 price is the same thing as a 123% increase.

    y = x * 2.23
    y = x + (x * 1.23)

    eta: my current marginal electricity price is 11.72p/kWh vs 6.14 at end 2003 so now is 191% of 2003 or a 91% increase. Over 8.5 years that's a 7.9%/year increase, i.e., doubling in about 9.1 years.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 23rd 2012 edited
     
    Here is my prices since Jan 2006 (not got last bill in)
    I have not changed my contract one bit, this makes it a bit tricky as sometimes EDF have a standing charge and other times they do not.
    So if I just took the 04/01/2006 prices of 15.74 and 4.29 and compared them to the 24/02/2012 prices of 15.24 and 5.77 it shows little increase.
    But I could take the lowest rate I have ever paid and compare it to the highest rate (10.11 and 19.86 for day and 3.81 and 5.77 for night and compare them, except the higher day rate precedes the lower one sometimes).
    Or a yearly mean price 13.2 and 4.05 in 2006 to 15.76 and 5.33 in 2012

    Let's run with that one
    Day increase in 6 years, that will be 15% increase on the day rate and a 24% increase on the night rate (2.5%pa on the day, 4%pa on the night).
    Just goes to show that changing supplier or deal is not always an advantage (though EDF bought SWEB).

    Date,Day Rate,Night Rate
    14/01/2006,15.74,4.29
    14/01/2006,11.42,4.29
    12/06/2006,14.58,3.98
    12/06/2006,10.58,3.81
    12/06/2006,13.93,
    12/06/2006,10.11,
    06/08/2006,14.58,3.98
    06/08/2006,14.58,3.81
    06/08/2006,10.58,3.81
    16/08/2006,13.93,
    16/08/2006,13.93,
    16/08/2006,10.11,
    16/08/2006,10.11,
    08/09/2006,15.74,4.29
    08/09/2006,15.74,4.29
    08/09/2006,15.58,3.98
    26/02/2007,15.74,4.29
    26/02/2007,11.42,
    08/06/2007,15.74,4.29
    08/06/2007,11.42,
    22/08/2007,15.74,4.29
    22/08/2007,11.42,
    20/11/2007,15.74,4.29
    20/11/2007,11.42,
    29/02/2008,15.74,4.20
    29/02/2008,11.42,4.62
    29/02/2008,16.98,
    29/02/2008,12.32,
    14/05/2008,16.98,4.62
    14/05/2008,12.32,
    29/08/2008,16.98,4.62
    29/08/2008,12.32,5.40
    29/08/2008,19.86,
    29/08/2008,14.41,
    29/08/2008,16.98,4.60
    29/08/2008,12.32,5.40
    29/08/2008,19.98,
    29/08/2008,14.41,
    25/02/2009,19.86,5.40
    25/02/2009,14.40,
    01/06/2009,19.86,5.40
    01/06/2009,14.41,4.96
    01/06/2009,18.27,
    01/06/2009,13.25,
    21/08/2009,18.27,4.96
    21/08/2009,13.25,
    24/11/2009,18.27,4.69
    24/11/2009,13.25,4.96
    24/11/2009,18.27,
    24/11/2009,13.25,
    24/02/2010,18.27,4.96
    24/02/2010,13.25,
    18/05/2010,18.27,4.96
    18/05/2010,13.25,
    25/08/2010,18.27,4.96
    25/08/2010,13.25,
    24/11/2010,18.27,4.96
    24/11/2010,13.25,5.09
    24/11/2010,18.74,
    24/11/2010,13.59,
    28/02/2011,18.74,5.09
    28/02/2011,13.59,
    14/09/2011,14.96,5.56
    24/02/2012,15.24,5.77
    • CommentAuthorGavin_A
    • CommentTimeJun 23rd 2012
     
    I think what that shows ST is that economy 7 rates aren't a good indicator of actual average price rises, which has probably led you to draw from false conclusions on the subject.

    I'm pretty sure the DECC figures come from the ONS basket of good for calculating RPI and CPI, so they're likely to be pretty accurate, whereas your individual figures for an economy 7 tariff are almost certain to be a statistical outlier.

    or to put it another way, you were probably being a bit ripped off in 2006, and since then EDF have taken over the company and EDF have been heavily pushing Economy 7 due to their nuclear capacity and ambitions in the UK and France, which would probably account for the Economy 7 rates not rising so much.
    • CommentAuthorCWatters
    • CommentTimeJun 23rd 2012
     
    We aren't the only country to have a reduced rate of VAT on insulation..

    http://www.buildup.eu/financing-schemes/25420
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 23rd 2012 edited
     
    Posted By: Gavin_Awhich would probably account for the Economy 7 rates not rising so much.

    Except that the Night rate has gone up more than the day rate. I am not really sure what my bill shows, but I cannot be the only one to have stuck with the standard E7 contract. I often feel that 'special deals' are anything but and are there to catch the gullible. It took me over 10 years to change my mobile phone provider as I could not better the deal, to the extent that T-Mobile would allow me to swap to a 'better' deal and swap back to my existing contract if it cost more, except that I was on there old 1990's (were One2One then) 'standard contract'.
    • CommentAuthorGavin_A
    • CommentTimeJun 23rd 2012
     
    IME I think we see economy 7 meters on about 5% of houses, maybe a bit more but not much.

    The thing I find most interesting about your figures btw is how wildly they seem to fluctuate.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJun 23rd 2012 edited
     
    Yes, I often notice that, seems that EDF lag behind other companies when it come to price review, then go over the top, then readjust them. I shall try and look at the costs with meter rental, that comes and goes. You have to remember that there are two rates for day and night sometimes. I think that EDF where one of the Big ^ that got heavily criticised for a confusing bill.

    Did you encourage your customers to change to an E7 or E10 tariff, rather compliments solar?
  25.  
    I've not work on a property with E7/E10 in years ,
    re. PV and E7/E10 I always thoguht the additonal standing charge made it pointless unless you heated+HW with electric in which case you'd have it anyway.
    ST whats your energy cost average over the year per month , mines currently around £45/month
    • CommentAuthorGavin_A
    • CommentTimeJun 23rd 2012
     
    <blockquote><cite>Posted By: SteamyTea</cite>Did you encourage your customers to change to an E7 or E10 tariff, rather compliments solar?</blockquote>
    I try to steer away from anything that might further complicate things tbh.

    also as James suggests, E7 only tends to work out for those who have storage heaters or similar that they can use at night, so while PV does complement existing E7 users, it'd not be right for most to switch to it IMO.
    • CommentAuthorSeret
    • CommentTimeJun 23rd 2012 edited
     
    When I did the sums a little while ago E7 worked out being almost exactly the same price as standard, taking PV into account. Would probably have been a little more expensive this year, given the washout of a spring/summer we've had. No storage heaters at present.
    •  
      CommentAuthorDamonHD
    • CommentTimeJun 23rd 2012
     
    Gavin_A: I may have misremembered again, but I thought that about 30% of UK domestic electricity is E7 or similar 'off-peak'; for 5% of households that would imply 6x higher consumption per household for those households which is not impossible (eg ~18MWh/y vs modal ~3MWh) and indeed seems plausible given average gas usage in connected households is ~18MWh/y.

    And a bit shocking really since those households could possibly cut consumption ~3x with heat pumps and maybe another 2x with attitude/behaviour change. A big chunk of unnecessary footprint...

    Rgds

    Damon
    • CommentAuthorGavin_A
    • CommentTimeJun 23rd 2012
     
    it's no doubt higher in areas off the gas grid where storage heaters etc made more sense, but 30% of the entire country would be way higher than my experience, although that's only a few hundred homes so not necessarily accurate.

    But yes, if those homes have storage heaters, and presumably electric cookers then their consumption will be far higher than those who use gas for heating and cooking (or just for heating).
    •  
      CommentAuthorDamonHD
    • CommentTimeJun 23rd 2012
     
    Just checked the latest DUKES:


    5.20 Within the domestic sector, the amount of electricity consumed, reported as being purchased under some form of off-peak pricing structure (eg Economy 7) was 22 per cent in 2010


    and E7 seems to be ~6.5% of total UK electricity consumption (table 5.3 Commodity Balances).

    So ~5% of the footprint of electricity generation ripe to be eliminated then...

    Rgds

    Damon

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