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

[Somecamel]

http://www.scottishpower.com/

 

[woko]

Anybody else worried about the Fit?

 

[SolarCity]

With the Tories in charge, I worry about everything.

 

[Octopus]

With the Tories in charge, I worry about everything.

None of them have a clue about what its like to be a normal working person. Least of all that idiot Ed Milliband who's making a promise to fix prices for 20 months - how does he think he can do that in a global market - 1 terrorist bomb in the "wrong" place could double the price of all fuels over night. Anyone who believes him needs to think again.

 

[Darkwood]

With the Tories in charge, I worry about everything.

Like Labours any better Ed Mil's announcement of promising to fix fuel prices caused a big shares drop in all the energy suppliers and guess what happens to companies that see this happen especially shareholder controlled ... they implement price hikes to pre-emt' the losses in case Labour get in, the price hikes were predicted anyway but nothing like the % that was announced ....

I would never vote a prat into goverment that just added £100 of the approx £180 to everyones bills next year even though hes not in power... it was almost laughable had it not been damaging to everyone.

Its on a Par to Gorden Brown announcing when he was selling our gold reserves .... the stock market saw an unpresidented fall in the value of gold thus we were sold out by our own government when prices were at there lowest.... now might seem dumb decision but when you do this purposely to shore up an American bank with UK money then treason and stock market manipulation comes to mind ...both illegal but he won't ever admit it will he!.. now what did he do to our pension pots uhmmm! im no tory fan but at least they haven't stealth robbed the very foundation of the countries wealth and personal pensions.

 

[Gavin A]

None of them have a clue about what its like to be a normal working person. Least of all that idiot Ed Milliband who's making a promise to fix prices for 20 months - how does he think he can do that in a global market - 1 terrorist bomb in the "wrong" place could double the price of all fuels over night. Anyone who believes him needs to think again.

nah, fixing prices for 20 months would be a piece of ****, it just wouldn't make any difference at all - basically the energy companies would just bring forward their prices rises (I suspect they probably have already added a percent or so to take account of this future risk).

At most it would impact on one single years worth of price rises, so it's just ****ing in the wind rather than actually offering any sort of long term solution.

Long term prices would be a lot cheaper with nationalised power companies, nationally financed and operated tidal barrage across the severn and elsewhere, and if we must, then nationally financed and built nuclear. It's absolutely nuts that we now have the Chinese and French state owned companies financing, building and operating the next generation of nuclear on a deal that basically guarantees them 10% profit margin on top of the interest payments on the money borrowed, AND the UK government is underwriting the debt, and liability insurance in the case of accidents, and liability for future decommissioning costs if the money set aside doesn't cover them (which it won't).

The most ridiculous thing about this is that in the late 90s we, as in the UK state owned nuclear industry at the time, bought Westinghouse, arguably the world's leading nuclear design and engineering company for a song, then the government flogged it for what can only be ideological reasons in 2007/8 or so for something like £2 billion.... We literally had ownership of the leading company in the field, and flogged it for a pittance and it's now going to result in an absolutely massive amount more money being sucked out of the country to France & China over the next 35 years because our politicians are so incompetent that they don't see that it makes far better financing sense to borrow and do it all ourselves than it ever does to give all the work and guaranteed long term profits to our competitors.

Guy Faulkes had it right, burn the lot of them and start again without3 parties of clueless neoliberalists in charge.

 

[Darkwood]

What needs to happen is the the Energy Suppliers should be made to reveal the price they buy their Energy at to give total transparency as it is at the moment they don't have to ... in Australia the Energy companies are subject to review regularly and have to submit all paperwork regarding prices they paid for fuel..... they don't have a runaway spiraling price hikes that besieges our shores but their is no quick fix for this one .. unfortunately you can't just implement a law regarding their accounting and fuel costs as its not as simple as that.

 

[Earthstore]

Here is a good point, what is the price paid for export on PV, erm... Around 5p... So the energy companies should welcome PV..

 

[Somecamel]

I was always under the impression that the energy companies buy the energy in at around 4.5p

From what I've seen today, the Green Subsidies are here to stay, they may be added onto general taxation, this has come from 3 top Lib Dems.

 

[Ian-LS]

not when they are forced to pay FIT as well.....

 

[Gavin A]

What needs to happen is the the Energy Suppliers should be made to reveal the price they buy their Energy at to give total transparency as it is at the moment they don't have to ... in Australia the Energy companies are subject to review regularly and have to submit all paperwork regarding prices they paid for fuel..... they don't have a runaway spiraling price hikes that besieges our shores but their is no quick fix for this one .. unfortunately you can't just implement a law regarding their accounting and fuel costs as its not as simple as that.

Fuel costs are already available, on an overall basis, I'm not entirely sure where the stats come from though.

Basically there actually is a very genuine reason for these price hikes, and anyone who knows anything about that side of the industry has been pointing out for the last year that there will have to be massive price hikes this winter because of them.

The price the electricity generators pay for gas has risen by 50% in the last 2-3 years. This is why prices needed to rise last winter, but in the end what actually happened last winter is that many of the coal plants that have limited hours operations til 2016 decided to run at full pelt last winter then shut up shop entirely in April to avoid A carbon tax that osbourne introduced on the sly for no good reason in April this year. So last winter saw a 20% switch from gas to coal (first time in 25 years) which offset the impact of the rise in gas prices, which is why the electricity companies ended up making a lot more profit last winter than they expected.

This year though 3 of the cheapest, old coal plants have shut completely, so that's 3 plants doing something like 1.5-2GW of baseload last winter at old dirt cheap prices have now gone entirely, so the likelihood is that we'll need to end up with maybe a 25-30% swing back from coal to gas this winter, which is bound to end up pushing the price of gas up even further. This volatility will also mean that they won't have been able to properly hedge their exposure to these increased costs (ie defer them by agreeing pricing in advance).

Last winter several gas plants were mothballed because they would have lost more money by generating than they would by closing the plant, so wholesale prices have to rise significantly this winter for those plant operators to even consider reopening the plant, or connecting new generation plant that was built last year but not connected. To be clear, without these gas generators operating the lights will definitely go out this winter, so the stark choice is pay the higher costs, or face blackouts in the depths of winter with gas plant sitting idle.

These rises were inevitable, however Osbourne with his daft carbon tax caused them to be brought forward so we suddenly hit this issue rather than gradually making the transition over the next 3 years until the originally planned shut down date for the oldest, dirtiest coal plants. The fact that Labour haven't been shouting these facts out from the roof tops really indicates how utterly clueless they are... journalists as well.

 

[Gavin A]

ps I;ve had the same story from 3 gas plant operators at a course my dad runs, plus a mate who works in the control room at one of the coal plants - they were all saying the exact same thing last winter, and now it's happening just as it always was going to and the government are now trying desperately to pass the buck to any likely candidate other than themselves.

 

[Darkwood]

@gavinA
Fuel costs are already available, on an overall basis, I'm not entirely sure where the stats come from though.


Your mistaken the price they pay for the fuel in advance is not accessible by you, me or the government this is what is allowing them ramp prices up instantly and failing to drop them fast if the wholesale price goes down.... average wholesale prices are available at time of enquiry but not the time and date and cost they got the fuel for... in Australia they have to reveal all... i don't need to really prove my point here look at our market and judge if it makes sense... no government has been able to fine them etc only miss selling is the best they have done.

 

[Gavin A]

@gavinA
Fuel costs are already available, on an overall basis, I'm not entirely sure where the stats come from though.


Your mistaken the price they pay for the fuel in advance is not accessible by you, me or the government this is what is allowing them ramp prices up instantly and failing to drop them fast if the wholesale price goes down.... average wholesale prices are available at time of enquiry but not the time and date and cost they got the fuel for... in Australia they have to reveal all... i don't need to really prove my point here look at our market and judge if it makes sense... no government has been able to fine them etc only miss selling is the best they have done.

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.

 

[spark 68]

The biggest con of this lot, is intra-company trading.

For instance BG shows a very small profit locally and points at the wholesale gas prices, green taxes etc., but Centrica (who happen to also own BG) make the bulk of the profits by wheeling and dealing in the international wholesale gas market, and who sells BG the wholesale gas ?

Add in the cartel factor and it is not hard to see they have the entire supply chain and market stitched up between them.

They are making vast profits at each stage and at every transaction.

 

[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.