Energy costs. Oh dear.......

[SalvorHardin]

A classic example in The Sun of how some people don't do maths (linked below).

Amongst the many examples, which includes a woman who believes she will die if her central heating falls below 20 degrees, is a couple who save money by charging their mobile phones using hand cranked chargers (these do work, I have one for emergencies).

A typical mobile phone battery holds about 12 watt hours of power. Let's say that electricity prices have roughly tripled from last year to 50p per kilowatt hour. So charging their phones when the battery is completely discharged using the mains costs about 0.6p per phone.

They spend more on food to manually generate the watt hours by hand and it takes more than an hour to do so (a boring task). Small hand cranks probably generate no more than 5 watts, maybe up to 10 if you wind like crazy. For comparison, manual labour typically generates about 75 watts, cyclists around 100 watts, pro cyclists 400 watts (up to 2,000 when sprinting).

http://www.thesun.co.uk/money/19630631/ ... -plan/amp/

https://en.m.wikipedia.org/wiki/Human_power

People will read that article and buy hand cranked chargers thinking that they are saving money.

[XFool]

Correct me if I am wrong but, at 15p per kWh, a 24 kilowatt boiler will indeed cost 24 x 15p = £3.60 per hour to run.

Well it does whilst it is running full blast, but every gas boiler I have ever used has turned itself off / down once the house came up to temperature.

How much it costs to run per day, per month, per season is another matter and depends on many things.

But the journalist hasn’t done that. They have simply multiplied the £3.60 for the boiler running full blast by an eight hour working day to get the £30 a day headline cost.

Yes, obviously. What else could they possibly do? I have no idea how many UK homes have 24 kW boilers - let's just pluck 10 million out of the air. So, on a daily basis, that pretty well leads to 10 million different daily costs per household - based on season of the year, local weather conditions, construction of property, size of property, number of inhabitants, personal habits and preferences of inhabitants. Does the journalist have all this information available at his fingertips? Is it available anywhere? If it was, how does it help? Is it distinguishable from householders using direct gas heating? Is it distinguishable from use of gas cookers?

Have you ever known a boiler run non-stop for eight hours without stopping?

So as I said before, a stupid journalist who doesn’t know how thermostats work - or alternatively a cynical journalist going for a ‘click bait’ article knowing it is rubbish but that other lazy/stupid journalists will just recycle it as the Telegraph did.

It seems very simple to me: It is an accurate calculation of the rate at which a running a 24 kW boiler racks up cost, which is surely what it is intended to be. I mean, if a 24 kW boiler were never turned on, obviously it would cost £0 per hour to run! (Let's ignore standing charges)

For the rest, the best advice is surely still: "You do the math!"

[Mike4]

Well it does whilst it is running full blast, but every gas boiler I have ever used has turned itself off / down once the house came up to temperature.
But the journalist hasn’t done that. They have simply multiplied the £3.60 for the boiler running full blast by an eight hour working day to get the £30 a day headline cost.

Yes, obviously. What else could they possibly do? I have no idea how many UK homes have 24 kW boilers - let's just pluck 10 million out of the air. So, on a daily basis, that pretty well leads to 10 million different daily costs per household - based on season of the year, local weather conditions, construction of property, size of property, number of inhabitants, personal habits and preferences of inhabitants. Does the journalist have all this information available at his fingertips? Is it available anywhere? If it was, how does it help? Is it distinguishable from householders using direct gas heating? Is it distinguishable from use of gas cookers?

Have you ever known a boiler run non-stop for eight hours without stopping?

So as I said before, a stupid journalist who doesn’t know how thermostats work - or alternatively a cynical journalist going for a ‘click bait’ article knowing it is rubbish but that other lazy/stupid journalists will just recycle it as the Telegraph did.

It seems very simple to me: It is an accurate calculation of the rate at which a running a 24 kW boiler racks up cost, which is surely what it is intended to be. I mean, if a 24 kW boiler were never turned on, obviously it would cost £0 per hour to run! (Let's ignore standing charges)

For the rest, the best advice is surely still: "You do the math!"

Curiously, this failure to understand is being addressed in a cock-eyed way in the world of electric ovens. If you look on AO.com et-al you'll notice the specifications for built-in ovens no longer tell you the power rating (something electricians need for cable sizing). Instead, they state you a 'typical' energy consumption given in kWh/h.

To establish the power rating of the oven I wanted, rated at 0.82kWh/h, I actually had to purchase it and measure the resistance of the element(s) after unpacking it. This is the sort of shyte that happens when lawyers and politicians start involving themselves in technical stuff.

[XFool]

It seems very simple to me: It is an accurate calculation of the rate at which a running a 24 kW boiler racks up cost, which is surely what it is intended to be. I mean, if a 24 kW boiler were never turned on, obviously it would cost £0 per hour to run! (Let's ignore standing charges)

For the rest, the best advice is surely still: "You do the math!"

Curiously, this failure to understand is being addressed in a cock-eyed way in the world of electric ovens. If you look on AO.com et-al you'll notice the specifications for built-in ovens no longer tell you the power rating (something electricians need for cable sizing). Instead, they state you a 'typical' energy consumption given in kWh/h.

Reminds me of when 'competition' first came to the consumer energy market. I looked into it, expecting to be able to choose a 'cheaper' electricity supplier. Not so simple! "If you are a typical family home...", plus the mandatory Direct Debt payment method, soon put me off.

[Mike4]

Curiously, this failure to understand is being addressed in a cock-eyed way in the world of electric ovens. If you look on AO.com et-al you'll notice the specifications for built-in ovens no longer tell you the power rating (something electricians need for cable sizing). Instead, they state you a 'typical' energy consumption given in kWh/h.

Reminds me of when 'competition' first came to the consumer energy market. I looked into it, expecting to be able to choose a 'cheaper' electricity supplier. Not so simple! "If you are a typical family home...", plus the mandatory Direct Debt payment method, soon put me off.

Yes. Even as a customer it can be surprisingly difficult to drill down and find out exactly how much you are being charged per kWh, and what the standing charge is.

The more complicated they make it, the less inclined people are to persist and compare actual prices. This is why the 'energy market' is such a rat's nest of confusion. They do it deliberately.

[Dod101]

Reminds me of when 'competition' first came to the consumer energy market. I looked into it, expecting to be able to choose a 'cheaper' electricity supplier. Not so simple! "If you are a typical family home...", plus the mandatory Direct Debt payment method, soon put me off.

Yes. Even as a customer it can be surprisingly difficult to drill down and find out exactly how much you are being charged per kWh, and what the standing charge is.

The more complicated they make it, the less inclined people are to persist and compare actual prices. This is why the 'energy market' is such a rat's nest of confusion. They do it deliberately.

Surely you can pick it up from a bill which you surely must get from time to time. Admittedly that is after you have used the fuel but even so……At least that is how my billing works. I get a quarterly bill and can look it up to see how much I am being charged per KWh

But I agree that the energy so called market is a mess.

Dod

[AF62]

It seems very simple to me: It is an accurate calculation of the rate at which a running a 24 kW boiler racks up cost, which is surely what it is intended to be. I mean, if a 24 kW boiler were never turned on, obviously it would cost £0 per hour to run! (Let's ignore standing charges)

If that was the case then the journalist wouldn’t have written a ‘£30 a day’ headline.

But they did, so confirming they didn’t have a clue.

[UncleEbenezer]

Correct me if I am wrong but, at 15p per kWh, a 24 kilowatt boiler will indeed cost 24 x 15p = £3.60 per hour to run.

How much it costs to run per day, per month, per season is another matter and depends on many things.

My 20Kw combi boiler is sized for my house, which includes two bathrooms.

So within that 20Kw is (presumably - I've never maxed out both at once to test it) the capacity to run a bath in one while taking a shower in t'other. And maybe even something involving hot water in the kitchen! Not something that'll ever last more than a few minutes even in the most profligate household.

[Mike4]

Correct me if I am wrong but, at 15p per kWh, a 24 kilowatt boiler will indeed cost 24 x 15p = £3.60 per hour to run.

How much it costs to run per day, per month, per season is another matter and depends on many things.

My 20Kw combi boiler is sized for my house, which includes two bathrooms.

So within that 20Kw is (presumably - I've never maxed out both at once to test it) the capacity to run a bath in one while taking a shower in t'other. And maybe even something involving hot water in the kitchen! Not something that'll ever last more than a few minutes even in the most profligate household.

Dare I suggest you might be mistaken?

I ask because in my whole career I've never seen a combi as small as 20kW, the smallest I've ever heard on is 24kW and hot water performance from these is pathetic.

I'm wondering if you have a 30kW or even 40kW combi from what you say about the hot water performance, with the heating side 'range rated' down to 20kW.

[UncleEbenezer]

Dare I suggest you might be mistaken?

Hmmm. Well, it's the smaller size of Worcester Bosch Greenstar 2000. Looking it up I see hot water 25Kw, heating 20kw, so what I posted wasn't the whole story. It provides more hot water than I ever need (much more than its Baxi predecessor), and my heating expectations are undemanding. I think I recollect reading that under heavy use it would prioritise hot water over heating.

FWIW, I have a reference point for inadequate hot water from years of experience with 7Kw electric showers. A most unsatisfyingly feeble flow, and rather tepid in the depths of winter.

[AF62]

Initial government details on how the £2,500 price cap for the typical household will be applied - https://www.gov.uk/government/publicati ... vNCZc80-cg

For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.

It seems the new cap won’t be a simple maximum standing charge and unit price, but some sort of calculation that the utility will apply to the bill to cap the cost - presumably to avoid needing to move people off fixed tariffs but to ensure they are not paying more than those on the (capped) variable tariff.

I can foresee people getting confused.

[swill453]

Initial government details on how the £2,500 price cap for the typical household will be applied - https://www.gov.uk/government/publicati ... vNCZc80-cg

For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.

It seems the new cap won’t be a simple maximum standing charge and unit price, but some sort of calculation that the utility will apply to the bill to cap the cost - presumably to avoid needing to move people off fixed tariffs but to ensure they are not paying more than those on the (capped) variable tariff.

I can foresee people getting confused.

I don't read it the way you do. The amounts they quote are just averages. I believe the EPG will be defined as a unit price (or a discount per unit).

(The standing charge is not affected and will still increase as per the previously notified October price "cap").

Scott.

[Dod101]

Initial government details on how the £2,500 price cap for the typical household will be applied - https://www.gov.uk/government/publicati ... vNCZc80-cg

For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.

It seems the new cap won’t be a simple maximum standing charge and unit price, but some sort of calculation that the utility will apply to the bill to cap the cost - presumably to avoid needing to move people off fixed tariffs but to ensure they are not paying more than those on the (capped) variable tariff.

I can foresee people getting confused.

Thanks but it is still far from clear. 'A typical household pays an average of £2,500 per annum. ' Already we have two vague terms, 'typical' and 'average'

So I wonder how it is all going to work because very few of us will be either 'typical' or 'average'. If no one was to pay more than £2500 pa does that mean everyone pays that amount? Not very likely so the guarantee must surely be based on a fixed SC and a fixed rate per unit but were that the case they would presumably be saying so. As you say, some sort of calculation, but what? I am inclined to go with Scott on this and because different regions have different SC and indeed rates per KWh as far as I understand it, they will not be able to quote figures in a general notice such as the one quoted.

Dod

[swill453]

Martin Lewis's take:

This will be a cap on standing charges and unit rates, so use less, you pay less, use more, pay more (I'll publish the rates when I have them). There is no total cap on what you pay, the typical rate is just a figure for illustration.

https://www.moneysavingexpert.com/news/ ... iz-truss-/

Scott.

[Dod101]

Martin Lewis's take:

This will be a cap on standing charges and unit rates, so use less, you pay less, use more, pay more (I'll publish the rates when I have them). There is no total cap on what you pay, the typical rate is just a figure for illustration.

https://www.moneysavingexpert.com/news/ ... iz-truss-/

Scott.

I think I would go along with that. Everyone needs to still have an incentive to use less fuel.

Dod

[AF62]

I don't read it the way you do. The amounts they quote are just averages. I believe the EPG will be defined as a unit price (or a discount per unit).

Yes but it is how the utilities will apply the Energy Price Guarantee.

For those on standard variable tariffs, then straightforward.

But what about those on higher fixed rate tariffs (who were trying to protect themselves against even higher rises in January). Will the utilities move them to the standard variable tariff? Cap the cost at the standard variable tariffs? Or discount the cost to the standard variable tariff rate?

And that's before you get to the odd ones such as people like me on the Octopus Gas Tracker tariff where you pay the daily wholesale rate marked up but capped at a ceiling.

Initial government details on how the £2,500 price cap for the typical household will be applied - https://www.gov.uk/government/publicati ... vNCZc80-cg
It seems the new cap won’t be a simple maximum standing charge and unit price, but some sort of calculation that the utility will apply to the bill to cap the cost - presumably to avoid needing to move people off fixed tariffs but to ensure they are not paying more than those on the (capped) variable tariff.

I can foresee people getting confused.

Thanks but it is still far from clear. 'A typical household pays an average of £2,500 per annum. ' Already we have two vague terms, 'typical' and 'average'

Ofgem use the term 'typical' and specifically don't use 'average' because the small number of high use households distort the average, and in respect of 'typical' they say

The values shown in the text above include VAT and are expressed for the current Typical Domestic Consumption Values (TDCV) of 2,900kWh of electricity, 12,000kWh of gas, and 4,200kWh of electricity for Economy 7. The price cap is a cap on a unit of gas and electricity, with standing charges taken into account. It is not a cap on customers’ overall energy bills, which will still rise or fall in line with their energy consumption.

https://www.ofgem.gov.uk/publications/p ... s693-april

So I wonder how it is all going to work because very few of us will be either 'typical' or 'average'. If no one was to pay more than £2500 pa does that mean everyone pays that amount?

No, the common misconception, not helped by the media.

A 'typical' household using 2,900kWh of electricity and 12,000kWh of gas will pay £2,500. Use more and you pay more. Use less and you pay less

Not very likely so the guarantee must surely be based on a fixed SC and a fixed rate per unit but were that the case they would presumably be saying so.

They say -

The Energy Price Guarantee limits the amount you can be charged per unit of gas or electricity, so your exact bill amount will continue to be influenced by how much energy you use

As you say, some sort of calculation, but what? I am inclined to go with Scott on this and because different regions have different SC and indeed rates per KWh as far as I understand it, they will not be able to quote figures in a general notice such as the one quoted.

However it appears they recognise the issue of people who have moved to fixed rate tariffs to try themselves to cap the cost, and rather than the energy companies having to deal with lots of people moving from these tariffs (or the alternative of people being disadvantaged by not being aware they can and concerned they will incur and early departure penalty) then perhaps that is why they say -

For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.

How that Energy Price Guarantee will be applied will be the interesting bit. For those on standard variable tariffs it will be straightforward - the standing charge and the unit price will be the standard capped price that would result in a bill for a 'typical' household of £2,500.

However for those on a fixed (higher unit cost) rate, will the utility companies simply charge the standard capped price or will they charge the higher fixed rate but then discounted on the bill to achieve the lower standard capped price. I suspect it will differ between the companies (and add to any confusion).

[richlist]

I'm currently paying £150 per month. With the £2500 price cap I expect this to rise to £200 per month which should cover my energy costs. I'm still expecting a total of £900 from HMGov' which more than covers the increase. Perhaps I'm one of the lucky ones.

[Dod101]

In the end it is not going to affect me very much because I am off grid for gas so it is only electricity for me and any reduction will be welcomed. My oil fuel for my boiler is uncapped so I pay whatever the market price is. All you lucky people having both electricity and gas capped in any sense are the fortunate ones.

Dod

[Mike4]

I'm currently paying £150 per month. With the £2500 price cap I expect this to rise to £200 per month which should cover my energy costs. I'm still expecting a total of £900 from HMGov' which more than covers the increase. Perhaps I'm one of the lucky ones.

The only place a £2500 price cap exists is in the media and in your imagination.

As discussed already in the thread, the price cap is a cap on the price of a kWh not your total bill, so you could legitimately get billed more than £2.5k if you use a lot of leccy.

[richlist]

Yes you are absolutely right & I was already aware of it but for me personally I think I'm quite fortunate. I have solar panels, a wood burner and portable gas heaters using bottled gas. I've been planning ahead and buying bottled gas since February. Our energy use is below average in a normal winter and the Gov are planning to pay me an extra chunk of money. With me paying £200 per month I'm expecting to be in credit at the end of the year but it's really a guess.

It's small businesses that I'm concerned for......even some of the larger ones who are big energy users aren't likely to get all the help they want from the Gov. Energy costs are only one part, prices generally are gonna rise a lot.