We don't seem to have a thread about the current energy prices yet, which surprises me. I've listed it under politics but maybe it isn't. Anyway...

What do people think about it? I'm not too worried for myself because we live in a well-insulated PH and [I hope] we have adequate finances, but I do worry about people with minimum wages, or thereabouts, and people on benefits. OTOH I do believe energy prices need to increase significantly, and while this isn't the way I would have chosen to test it, perhaps there is some benefit to be gained. I don't know; what do you think?

I haven't been on this forum for ages, but I dropped in this morning, curious to see what people were saying about exactly this.

I think Jonti makes a very good point. I can't see how the little independent cafes in my town will be able to pay their heating bills on the margins of selling coffee and scones. Talk of creating warm spaces this winter, but local councils have to pay energy bills too, and most already have difficult budgets to balance. Huge numbers of people already using food banks, and you already use a food bank you don't have 0% extra to pay for heating, let alone 80%. This is an impending social disaster, and I can see violence coming.

The only solution the government seems to have is to give state subsidies, which just means taking more money from us in taxes in order to give us it back.

Meanwhile, who benefits from all of this? The public will blame energy suppliers, but many of them are going bust because they can't make a profit. The cost of producing energy has not gone up, but the profit margin has, so this must be generating huge profits for the energy producers.

When you get down to basics, this is just taking more money from poor people and giving it to rich people and the simple solution is to just take that extra profit margin back from the rich people and use that to subside the energy prices. I say simple, but of course its not simple, because even if there was the political will to do this (which would go against the ethos of the current government), you can't fix the cost of energy you buy from another country.

So djh, you are right to put this in the politics section because that's all that this problem is, and politics is the only thing that could solve it.

The government over here has tackled this problem by taking the average household (domestic) gas and electric bill and at average or below the price is capped (government subsidised) and above that it is close to the market price. So higher than average you pay double for electricity and 7 times (yes seven) for gas. The cut-off for domestic electricity is 210 kWh / month for both day tine and off peak (typically for DHW heating )and for gas it is 144 M3 / month.

Petrol and diesel is also subsidised for private cars at about 1 GBP / ltr otherwise it is about 1.65 GBP / ltr. When filling up you have to show your log book as it only applies to Hungarian registered cars and it was found that there was some cross border fiddling going on with adjacent country cars using false number plates. There is also a limit of 50 lts / day for the subsidised fuel.

There is also a price cap (subsidy) on what the government thinks are basic needs food which creates some anomalies e.g. 2.8 fat milk is 41p. (subsidised) whilst 1.5 fat milk is 62p. with no subsidy but I suspect the subsidy on the 2.8 milk is pushing the price down of the other types.

It is expensive for the government ( = tax payers) but to me this seems a reasonable approach.

Posted By: Kenny_MMeanwhile, who benefits from all of this? The public will blame energy suppliers, but many of them are going bust because they can't make a profit. The cost of producing energy has not gone up, but the profit margin has, so this must be generating huge profits for the energy producers.

The suppliers that have gone bust (AFAIK) are those who offered fixed price contracts and didn't anticipate the energy price rise. I don't remember hearing of a producer going bust.

The profits of the energy companies are sky high because IMO their business model is one of cost plus a %age so if the costs go up (e.g. raw materials) then their profits also go up be a similar %age increase. It should not be beyond the wit (or maybe that is asking too much!) of the government to tell the energy producers that any profit beyond that of the pre fuel crisis level will be taxed unless they use that profit to lower the cost of their fuel products. If that happened the pressure would be taken off the fuel companies and with it the public antagonism and some of the energy price hike would be mitigated. Further mitigation would need to be government subsidy which could be targeted in some way similar to that which Hungary has done.

Posted By: fostertomBit concerned about

Posted By: djhI do believe energy prices need to increase significantly

when there should be every chance of renewable energies falling steadily in price, only sabotaged by govt committing us to decades of high-priced/subsidised nuclear energy.

The world uses too much energy and we need to reduce it, so prices need to go up. Renewable energy is miles short of the minimum we need so we need to invest a lot more to get to net zero, so prices need to go up. Only when we've got to the minimum necessary can we start to build renewable sources for extra, optional uses. So it'll be a very long time before prices start to come down, IMHO.

Posted By: Peter_in_HungaryIt should not be beyond the wit (or maybe that is asking too much!) of the government to tell the energy producers that any profit beyond that of the pre fuel crisis level will be taxed unless they use that profit to lower the cost of their fuel products.

Its not beyond their wit, but its beyond their will. Even if they had the will, you can only tax companies that operate within your jurisdiction. My understanding is that the UK gets a significant chunk (around 50%) of its gas from Norway and LNG imports, and those suppliers will just take their business elsewhere if you try to limit their profits.

I do like the Hungarian approach though. Cap the unit price up to a certain reasonable usage, then full market price for any units used beyond this. I can't see any UK party capable of winning a GE having the will to do that though.

Posted By: Kenny_M

I do like the Hungarian approach though. Cap the unit price up to a certain reasonable usage, then full market price for any units used beyond this. I can't see any UK party capable of winning a GE having the will to do that though.

Maybe, though I am dumbfounded that anyone would want to become more dependent on Russia let alone let Russia build nuclear facilities. Now that won't end well for the Hungarians.

Posted By: Peter_in_HungaryYes it is 210 daytime + 210 off peak.

In that case I like it a lot :) :)

The reason I think it is reasonable for the government to step in is that the rapid increase in energy costs have happened so fast it hasn't given society enough time to react or to reorganise their expenses the way people could have done if the same increases had happened over a period of several years.

I can see the argument, but I have trouble accepting it. It's all happened so fast because of (1) the government's previous reluctance to gradually increase interest rates, leading to lots of zombie companies and sudden shocks for consumers and (2) the Russian war in Ukraine, which is just one of those things but again hasn't been adequately prepared against; and regardless of how fast the increases have happened, I don't think it's right to increase long-term borrowing to deal with what I believe will prove to be a long-term situation. It's better to deal with the situation now, IMHO, so we can clear the decks and move on in the new situation.

Posted By: JontiMaybe, though I am dumbfounded that anyone would want to become more dependent on Russia let alone let Russia build nuclear facilities. Now that won't end well for the Hungarians.

We are no more dependent upon Russia now than we were a year ago. And it is much more difficult to unhook here than the UK. Ask Germany (and the rest of Europe) about dependency on Russia.

At the moment it is more difficult to unhook from Russia than to unhook from China and Taiwan is much further away than Eastern Europe but if Taiwan goes south what price Hinkley point C and Sizewell C.
Chinas human rights are as bad or worse than Russia but everyone is happy to trade with china......at the moment.

Posted By: jms452In the medium term we need to be rolling out zero-carbon electricity generation at unprecedented levels and in the short term we need to be insulating houses

as if there was a war on!

Err........there is !!

Short term won't help with this crisis, you won't get enough houses insulated within 2 years to make any difference (except to the few occupants) and you will be picking up the pieces of rushed jobs done by cowboy fitters for years to come.

In years to come IMO we will look back on this time as very painful but the big driver to get away from fossil fuels fast(ish).

Posted By: JontiAs for Hungary and Russia. Yes, you are no more dependent on Russia today than a year ago but Hungary seems to want to become more dependent on Russia which I find baffling.

We don't want to become more dependant on Russia but the options are limited. Hungary as a small country on the edge of western Europe with a population not much more than London and without the clout in Brussels that Germany has, and being land locked has to find its solutions where it can and makes deals that as far as possible secure our situation. Whilst Hungary has contracts with Russia I don't think anyone is under the illusion that when push comes to shove the contracts would be enforceable if Russia reneged.

Posted By: philedgeI started looking at adding PV last year when it was quite clear where prices were going. With the thought of bulk buying, I started a whatapp group with about 15-20 contacts who I knew could easily afford to have PV. No one interested.

Come march this year when the updated price cap was announced I was passing B+Q and popped in to see how their stocks of insulation were-all fully stocked.

I know one person that is actively looking at cutting back usage and insulating/draught proofing. I know lots that arent doing anything other than whine.

Painful as it maybe for some, hopefully this will the boot up the a**e that people need to start changing their lifestyles.

This may have answered the statement in your last sentence:

https://www.bbc.co.uk/news/business-62524031 (Sales of solar panels booming).

It is only when costs become prohibitive that some people will take action. Unfortunately low income families will not be able to do much other than maybe cut back further on their energy use or carry out some basic stuff like insulating the attic. I like the Hungarian model as mentioned by Peter. I would think that folk on low incomes would generally live in smaller properties that require less energy to start with, whereas wealthier folk tend to live in larger properties with correspondingly higher energy requirements.

I was in the fortunate position that when I retired I was able to spend a chunk of the 25% lump sum from my pension to install solar panels back in 2011 (albeit at enormous cost compared to today's prices). I regarded this investment as part of my pension provision.

The PV system has now paid for itself and so for the next 13 years will not only be saving me the cost of electricity bought from the grid but providing an income which can be used to put towards energy costs.

Clearly as a country we are years behind where we could have been in terms of investing in renewable energy. I remember back in the 70's/80's when the Centre for Alternative Technology (CAT) in Machynlleth was regarded by many as a kind of geeky, almost hippy-like enterprise and now today it is a centre of excellence in this field.

On final comment: why do the media insist on expressing the forthcoming price cap in terms of the "average fuel bill" as being £x per year as opposed to telling us exactly what will be the unit charge i.e. the cost per kW? The latter is almost impossible to find!

Posted By: Peter_in_Hungary

Posted By: jms452In the medium term we need to be rolling out zero-carbon electricity generation at unprecedented levels and in the short term we need to be insulating houses

as if there was a war on!

Err........there is !!

Short term won't help with this crisis, you won't get enough houses insulated within 2 years to make any difference (except to the few occupants) and you will be picking up the pieces of rushed jobs done by cowboy fitters for years to come.

In years to come IMO we will look back on this time as very painful but the big driver to get away from fossil fuels fast(ish).

humour lost via typed comments.

We cant do a lot of deep retrofit in two years but we can do a lot of CWI, loft insulation, solar and start using the radically changed payback landscape to start looking at higher standards.

I'm amazed how little joined up thinking there is in government & most of the press that the cost of living crisis, energy crisis and climate crisis are all helped by rapid deployment of insulation and renewables.

Posted By: djh

Posted By: Jeff BOn final comment: why do the media insist on expressing the forthcoming price cap in terms of the "average fuel bill" as being £x per year as opposed to telling us exactly what will be the unit charge i.e. the cost per kW? The latter is almost impossible to find!

The media think people are too stupid to do multiplications or ratios. I couldn't possibly say whether they're right or not.http:///newforum/extensions/Vanillacons/smilies/standard/devil.gif" alt="" title="" >

On the BBC website today:

https://www.bbc.co.uk/news/uk-politics-62703858

"The price of electricity will rise on average from 28p per kilowatt hour (kWh) to 52p and gas will go up from 7p to 15p per kWh".

I am already paying 36p per kW to Octopus, so well above average as it is! So by definition there must be cheaper options out there. The irony is that Octopus are supposedly supplying 100% "green" electricity - has the cost of wind and sunlight gone up too?

Posted By: Jeff BThe irony is that Octopus are supposedly supplying 100% "green" electricity - has the cost of wind and sunlight gone up too?

There seem to be an awful lot of green/eco/renewable supply claims made by most if not all of the electricity companies so its puzzling where the 55-65% of gas generation happening yesterday evening was actually going.

I think Octopus have some green generation of their own but not sure if its enough to supply all their customers at peak time when the suns gone down on a still night??

In France, the situation is radically different from the UK. The French Government is re-nationalising the 12% of EDF that was in private hands, and has ordered them to supply electricity to domestic consumers and other retailers at no more than 4% above last year's price. They also own the largest gas supplier - Engie - who have been ordered to maintain 2021 prices for domestic customers.

It seems that the policy (bouclier tarifaire / tariff shield) may well remain in place next year too.

Posted By: djh

Posted By: Mike1In France, the situation is radically different from the UK. The French Government is re-nationalising the 12% of EDF that was in private hands, and has ordered them to supply electricity to domestic consumers and other retailers at no more than 4% above last year's price. They also own the largest gas supplier - Engie - who have been ordered to maintain 2021 prices for domestic customers.

It seems that the policy (bouclier tarifaire / tariff shield) may well remain in place next year too.

How are they funding it?

According to the internet Frances electricity production is 72.3% nuclear and 17.8% renewables which means that fossil fuel has a very small share of the production capacity so the vast majority of production will be unaffected by the current mess. - So not much funding needed