Anybody know how they will be calculating the KwH rates and what constitutes average?
I have been looking into this a little bit more since posing the question, and thank you everyone for your opinions and advice.
@Walking, responding to your question, the Ofgem site says ‘annual average’ is 2900 KwH of day rate electricity, 4200 KwH of Economy 7 and 12000 KwH of gas. If you are on the standard variable tariff and use these amounts your bill will increase from £1277 pa to £1971.
How much energy you actually use in a year can be found on your bill and thus you can work out how far from the average you are. However I find the included Economy 7 figure odd because lots of people do not have Economy 7 and, if you do, Economy 7 consumption is 42% of the total on average according to info provided on price comparison websites.
What I know is my own electricity consumption is about average but gas consumption is way higher, possibly because we have an old house with no cavity wall insulation, we’re at home all day and we do like (and willingly pay for) the place to be comfortably warm rather than layering up with jumpers.
As to the key original point of whether to take a fixed or a variable rate, I read with great interest what Martin Lewis had to say. The comment that his guess of a 20% hike in prices at the next review in October - a believable but slightly pessimistic assumption I inferred - will mean a variable tariff will still be cheaper than the cheapest fixed rate on the market. If I have understood Martin Lewis correctly I am slightly baffled @raisingirl (and I have long had respect and admiration for your comments on these matters) why you are advocating taking the fixed price deal.
It would seem to me that the energy companies will not want to get their fingers burned again by offering contracts where the price to us is below market rate (and I have been a very grateful recipient of this largesse over the past many months) so they will surely set their fixed tariffs at a price that takes the gloomiest of projections about what is going to happen in the short to medium future. When it comes to the variable rate tariff, Ofgem, through the price cap, ensures the price is a fair one. Thus, as it stands at present, I think on April 1st I will take a variable tariff rather than a fixed one.
I think that's a pretty reasonable decision @BenCotto. Somehow, taking a fixed rate deal now somehow seems a little like stable door / horse bolting. We're in a full blown energy pricing storm at the moment and there's no way the few remaining energy companies are going to be offering deals which they think will risk them losing more money.
Heaven is ... sitting in the garden with a G&T and a cat while watching the sun go down
If I have understood Martin Lewis correctly I am slightly baffled @raisingirl why you are advocating taking the fixed price deal.
It does depend what deal you can get. I haven't done any personal research on what fixed tariff gas prices are being offered (not having gas) but I am as sure as I can be (i.e. not very) that gas prices are going to keep going up - or anyway not coming down - for as long as the Russian/Ukraine situation persists and very likely beyond. So a fixed deal now may well pan out as cheaper in the medium term. They are never cheaper in the short term. If Putin and Biden come to an agreement by Easter, that may be entirely wrong and the price may fall back. That wouldn't be my bet, were it my money, but it could happen.
For electricity, the problems last year came from the amount of time we were relying on the expensive gas, or even coal - it was higher than average. The cost of nuclear and the cost of wind and solar are a lot less variable than the cost of gas. I'm not a fan of nuclear, I should add, but we are where we are with it and as long as it's providing the base load, the Grid knows what it's paying for it. Wind and solar - the cost is almost entirely in the capital expenditure, so fixed to the time it's installed, and it doesn't change. That's why my guess would be that electricity prices will eventually begin to at least spread out again, from highest to lowest, so it will, I hope, become possible to get a better deal on some specific tariffs, such as E7, E10 and their successors, as we move into the lower demand period, in summer.
There is a limit of course. Once the load is perfectly balanced, when we all have smart meters and the network has a lot more storage capacity, everyone will pay the same price for electricity, day or night - that's where we're heading but it's a long way off yet. In the meantime, gas prices will continue to be at the dictat of whichever political state has ownership of the wells - Russia, China, Saudi, the US. Oil price is even more volatile because we have no equivalent to the gas grid and are even more exposed to the purchasing choices of the supply companies. It's impossible to say where that's going. If demand drops, so will oil prices.
If it tells you anything (not really), I'm in the second year of a 3 year fixed contract for electricity. We are not protected by the price cap, as we pay a business tariff. I won't be making any decisions about what to do next until I absolutely have to.
Gardening on the edge of Exmoor, in Devon
“It's still magic even if you know how it's done.”
That's exactly right @Topbird - we'll all have to just weather the storm together!
Just think, if any supplier had a poor pricing specialist in their product development department and was to offer a half decent fixed rate deal at the moment, there would be a massive surge of attempted switches, an overload on the system and call centre, leading to a meltdown, with missed and duplicated payments and customers being left in limbo! (Memories of National Savings fiasco in 2020!)
I'm not sure how many electricity suppliers are left now - British Gas, Scottish Power, Octopus, Eon - any others? Certainly considerably fewer than 6 months ago. The bigger remaining companies don't really need to compete for our business anymore - they have a captive market - not many of us are prepared to go long term without electricity and a source of heating.
That's another reason I don't think any of them are offering any tempting deals - they don't have to and it would make poor business sense to do it. They will already be subsidising customers with pre-exisiting long term fixed rate deals. They won't want any more in the current climate....
Heaven is ... sitting in the garden with a G&T and a cat while watching the sun go down
@Kili - Your heating oil price was quite high unless you bought it on a 'spike' day. I've just ordered 500 litres @ 63.54p/l.
Hate ordering oil - have to do online quotes, make a few phone calls and then phone my regular supplier and have the bartering session with them. Only once have they failed to meet or slightly undercut the other best price. Sometimes I think I can't be bothered to play the game but before now, it's saved me over £40 on a single delivery which will buy 2 bottles of gin or pay half the grocery bill depending on today's priorities....
OK then - a couple of DA bare root roses - as we're on a gardening forum😁
Heaven is ... sitting in the garden with a G&T and a cat while watching the sun go down
Posts
@Walking, responding to your question, the Ofgem site says ‘annual average’ is 2900 KwH of day rate electricity, 4200 KwH of Economy 7 and 12000 KwH of gas. If you are on the standard variable tariff and use these amounts your bill will increase from £1277 pa to £1971.
How much energy you actually use in a year can be found on your bill and thus you can work out how far from the average you are. However I find the included Economy 7 figure odd because lots of people do not have Economy 7 and, if you do, Economy 7 consumption is 42% of the total on average according to info provided on price comparison websites.
What I know is my own electricity consumption is about average but gas consumption is way higher, possibly because we have an old house with no cavity wall insulation, we’re at home all day and we do like (and willingly pay for) the place to be comfortably warm rather than layering up with jumpers.
As to the key original point of whether to take a fixed or a variable rate, I read with great interest what Martin Lewis had to say. The comment that his guess of a 20% hike in prices at the next review in October - a believable but slightly pessimistic assumption I inferred - will mean a variable tariff will still be cheaper than the cheapest fixed rate on the market. If I have understood Martin Lewis correctly I am slightly baffled @raisingirl (and I have long had respect and admiration for your comments on these matters) why you are advocating taking the fixed price deal.
It would seem to me that the energy companies will not want to get their fingers burned again by offering contracts where the price to us is below market rate (and I have been a very grateful recipient of this largesse over the past many months) so they will surely set their fixed tariffs at a price that takes the gloomiest of projections about what is going to happen in the short to medium future. When it comes to the variable rate tariff, Ofgem, through the price cap, ensures the price is a fair one. Thus, as it stands at present, I think on April 1st I will take a variable tariff rather than a fixed one.
Somehow, taking a fixed rate deal now somehow seems a little like stable door / horse bolting. We're in a full blown energy pricing storm at the moment and there's no way the few remaining energy companies are going to be offering deals which they think will risk them losing more money.
For electricity, the problems last year came from the amount of time we were relying on the expensive gas, or even coal - it was higher than average. The cost of nuclear and the cost of wind and solar are a lot less variable than the cost of gas. I'm not a fan of nuclear, I should add, but we are where we are with it and as long as it's providing the base load, the Grid knows what it's paying for it. Wind and solar - the cost is almost entirely in the capital expenditure, so fixed to the time it's installed, and it doesn't change. That's why my guess would be that electricity prices will eventually begin to at least spread out again, from highest to lowest, so it will, I hope, become possible to get a better deal on some specific tariffs, such as E7, E10 and their successors, as we move into the lower demand period, in summer.
There is a limit of course. Once the load is perfectly balanced, when we all have smart meters and the network has a lot more storage capacity, everyone will pay the same price for electricity, day or night - that's where we're heading but it's a long way off yet.
In the meantime, gas prices will continue to be at the dictat of whichever political state has ownership of the wells - Russia, China, Saudi, the US. Oil price is even more volatile because we have no equivalent to the gas grid and are even more exposed to the purchasing choices of the supply companies. It's impossible to say where that's going. If demand drops, so will oil prices.
If it tells you anything (not really), I'm in the second year of a 3 year fixed contract for electricity. We are not protected by the price cap, as we pay a business tariff. I won't be making any decisions about what to do next until I absolutely have to.
“It's still magic even if you know how it's done.”
Just think, if any supplier had a poor pricing specialist in their product development department and was to offer a half decent fixed rate deal at the moment, there would be a massive surge of attempted switches, an overload on the system and call centre, leading to a meltdown, with missed and duplicated payments and customers being left in limbo! (Memories of National Savings fiasco in 2020!)
Pardon me for being cynical😒!
That's another reason I don't think any of them are offering any tempting deals - they don't have to and it would make poor business sense to do it. They will already be subsidising customers with pre-exisiting long term fixed rate deals. They won't want any more in the current climate....
Hate ordering oil - have to do online quotes, make a few phone calls and then phone my regular supplier and have the bartering session with them. Only once have they failed to meet or slightly undercut the other best price.
Sometimes I think I can't be bothered to play the game but before now, it's saved me over £40 on a single delivery which will buy 2 bottles of gin or pay half the grocery bill depending on today's priorities....
OK then - a couple of DA bare root roses - as we're on a gardening forum😁
At least you can have a few and forget how much money you're literally burning
I live in west central Scotland - not where that photo is...
We rely on oil here as not on the gas grid. My electricity consumption is lower than average.
Unfortunately, there doesn't seem to be a lot we can do about it.
The gas and electricity prices will surely affect growers and plant prices.