[Mailman]

Released today the Cornwall Insight final cap forecast

Numbers are a little worse than forecast earlier on in the year.

[meldrewreborn]

@Mailman

thank you for this. Although it’s early days in the life of this government, I’m sure there will efforts to moderate any increases after due consultation with OFGEM and suppliers. The increases predicted in the standing charge will come under particular scrutiny.

[Tommysgirl]

@Mailman

Thank you for the update. Cornwall Insight are usually pretty accurate with their forecasts.

@meldrewreborn

Well said!, I hope the new government will make efforts to moderate any increases, especially as they're under fire for scrapping the Winter Fuel Payment for the majority of Pensioners, which will hit those just above the qualifying level for Pension Credit the hardest.

[meldrewreborn]

@Tommysgirl

I think the government are realising that it’s much harder to manage things than it was to criticise from the opposition benches. The decision to axe the winter fuel payment for millions was rather crass, and hypocritical given they’d taunted the previous government about the prospect of such a change.

the budget will clarify a lot of things for the electorate, and may give us a clearer understanding of how policy intentions will translate into real measures.

[meldrewreborn]

There are things that could be done to change how our electricity supply system works, especially in regards to wholesale pricing and settlement at the half hourly prices, which can lead to wind power being turned off, at the same time increasing flows through interconnecters from abroad. Proposals to end this apparent lunacy are in the offing, but while residential consumers might benefit, industrial user might be adversely affected.

[Andy65]

I thought that wholesale prices rocketed because of a perceived shortage due to the Russian invasion of Ukraine etc. As far as I know there never was a shortage but wholesale prices haven't looked like lowering by anything other than token amounts.
On the Business Hour this morning European gas storage levels were said to be 89% currently, with a target of 90% by 1st November so again there doesn't seem to be any issues with supply.

I don't ever see prices coming down to anywhere near where they were, too many are on to too much of a good thing.

[meldrewreborn]

@Andy65

the removal of Russian gas from the market led to a reduction in supply while demand remained much the same. In the absence of long term contracts the price goes up as supply is relatively inelastic, in that it cannot be increased quickly. This could be due to the number of specialised tankers to ship the gas.

in time the market adjust and a number of new projects will come on stream starting next year, which will increase supply, and gradually over 2-3 years supply increases will be substantial. The market price will also be determined by demand, and others will be seeking to use gas in preference to coal to reduce emissions as we have done.

A while ago the US was awash with gas from fracking operations (killed at birth in the UK) that they could not export because of a lack of LNG terminals and shipping capacity. Over time these have been resolved but prices are always the result of market forces, which no politician can ever control.

[retrotecchie]

@Andy65

In 2018, the average unit price was about 4p/kWh. As of today, it's 5.45p. An increase of 1.45p. Over six years, allowing for inflation, that's actually not that bad all things considered. An increase of 36%

In 2018, I was buying diesel at under £1 a litre and today it's nearer £1.45. An increase of 45%.

But, the killer is the standing charges. They have more than tripled in those 6 years!

That has got nothing whatsoever to do with market prices or supply and demand. It just highlights how broken the system is, especially for light users.

[Tommysgirl]

@retrotecchie

I agree about the standing charges being the 'killer'. I think it is very unfair on light users and I disagree with regional variations too. I know they say it's the cost of getting and maintaining the supply to more remote areas but it makes me chuckle that there are lots of windfarms near where I live, and all over Northumberland and yet the electricity standing charge for the Northern Region is about the highest one there is. 🤔😂

[meldrewreborn]

@Tommysgirl

The push for net zero brings huge capital costs now, with the presumption that unit prices will be lower in the future. It seems logical to me that if the benefit is to be in our unit prices in the future it should be unit prices that are impacted now. As it is it seems our standing charges are carrying the costs, and given the impetus behind decarbonising our energy is only growing, more pain is highly likely.