Energy price cap, domestic and other merged topic

[anotherexlurker]

This might sound simplistic, but if i isolate my own gas supply before the meter at the ball valve i still pay the standing charges, don't i? If i don't want to pay any standing charges i have to go a lot further, right?

In order to avoid the standing charges you would need to contact your gas supplier and ask to be disconnected , I assume they would charge for that and would then charge again if you wanted to be reconnected in the future.

[Vortex2]

FWIW in France you can be off-grid ... BUT ... if you ever go on-grid you can never go back off-grid.

[adam2]

The recently announced 2 year price cap of £2,500 for the average consumer will greatly reduce the suffering and hardship that would have otherwise resulted.
Higher energy prices are in my view a good thing WITHIN REASON as conservation, energy efficiency, and renewable generation are thereby encouraged.
However without this price cap, prices would have risen to extreme levels, with many unable to afford even modest use.

It remains to be seen what will happen to the public finances in general. The other concern is that holding prices at less than market prices will stimulate demand if compared to the demand destruction that would otherwise have resulted. This will increase the chances of physical shortages.

The new PM also announced proposals to limit the wholesale prices that the national grid pay to existing nuclear and renewable providers. Not certain how that will work.

[clv101]

The other concern is that holding prices at less than market prices will stimulate demand if compared to the demand destruction that would otherwise have resulted. This will increase the chances of physical shortages.

This is key.

The British consumer is being (partially) isolated from the price signal - so does not reduce consumption as much as market requires to clear. Leaving the 'demand destruction' to someone else, someplace else? We are forcing that reduction to be concentrated on those not so isolated. Who are they and how are they likely to respond to this market manipulation?

I think they are mostly in Asia, Japan, India, Pakistan, China etc... They may respond by switching from LNG towards coal... or may respond with similar state subsidies! We end up in an international bidding war.

[adam2]

HMG have now announced a price cap for non domestic gas and electricity consumers.
This is a good thing for the preservation of industry, and protecting employment, but as with the domestic price cap it will tend to stimulate demand beyond that existing at free market prices.
This increases the risk of physical shortages, and may tend to drive wholesale prices even higher.

[BritDownUnder]

A price cap will also result in a massive transfer of wealth from the UK to overseas, or more correctly an increase in the UK's net indebtedness to the rest of the world.

[Stumuz2]

Looks like we are entering the first stages of Ludwig Von Mises' 'crack up boom phase'

This is where even larger amounts of currency are printed out of thin air to cover people bills. The second stage comes when people complain that the currency they are given does not buy anything of value. They then get rid of the currency as soon as they receive it and swop it for 'stuff'

https://www.investopedia.com/terms/c/crackup-boom.asp

Today we get our energy bills paid. Then it will be food. Then hyperinflation.

[adam2]

This news report states that non domestic electricity will be capped at 21.1 pence a kilowatt hour, and gas at 7.5 pence.
That in my view is unduly cheap, IIRC domestic electricity is capped at about 39 pence a unit.

https://www.bbc.co.uk/news/business-58090533

21 pence a unit will tend to encourage BAU, excessive lighting in shops, halogen of course, outdoor heating and other foolishness. I would have supported a non domestic price cap at a similar level to the domestic price cap.

I have re named this topic to reflect the fact that domestic bills are now not expected to reach £6,500 a year as was feared, and also that we are talking about the price cap for non domestic energy.

[Potemkin Villager]

I am not hearing anything about folk using less. This will not end well.

[Vortex2]

I have re named this topic to reflect the fact that domestic bills are now not expected to reach £6,500 a year as was feared, and also that we are talking about the price cap for non domestic energy.

The Germans with their x6 to x13 bill increases must be praying for a similar 'solution'.
However in their case they may not actually have supply ...

[adam2]

I suspect that the German reports of a thirteen fold increase may have been based on a brief peak in the wholesale gas price. UK normal price about 40 pence a therm, UK peak price about 600 pence a therm, or a fifteen fold increase, probably similar in Germany.
But as has been said above, they might not have the supply, even at those prices.

[clv101]

This news report states that non domestic electricity will be capped at 21.1 pence a kilowatt hour, and gas at 7.5 pence.
That in my view is unduly cheap, IIRC domestic electricity is capped at about 39 pence a unit.

This government is nuts. It's agreeing to blow hundreds of £bn on propping up wasteful, inefficient energy use. This approach can't end well.

[adam2]

This news report states that non domestic electricity will be capped at 21.1 pence a kilowatt hour, and gas at 7.5 pence.
That in my view is unduly cheap, IIRC domestic electricity is capped at about 39 pence a unit.

This government is nuts. It's agreeing to blow hundreds of £bn on propping up wasteful, inefficient energy use. This approach can't end well.

Agree entirely.
Higher energy prices are in my view a good thing WITHIN REASON, and I think that the domestic price of 39 pence a unit is high enough to encourage more careful use, without rendering it simply unaffordable.

21 pence a unit though is almost BAU.

[emordnilap]

This government is nuts. It's agreeing to blow hundreds of £bn on propping up wasteful, inefficient energy use. This approach can't end well.

Agree. It highlights just how much these 'leaders' really know.

[Vortex2]

21 pence a unit though is almost BAU.

It does give us time to make more preparations and buy any required kit etc at a decent price as the panic wears off.

Of course, in a few months .. or maybe next winter ... we will see an action replay.