Office of Gas and Electricity Markets

Energy bills: how households could feel the cold this winter

Retrieved on:

Thursday, October 26, 2023

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Of course, energy isn’t the only rising cost in the current inflation-led economy, which has caused most households to see a decline in disposable income since last winter.

Key Points:

Of course, energy isn’t the only rising cost in the current inflation-led economy, which has caused most households to see a decline in disposable income since last winter.
Compounding this, even if energy prices are lower this winter than last, some households will struggle to pay their energy bills because they are still carrying significant energy debts.
This explains why many households are so exposed to changes in global gas prices.

What’s in your bill?

This charge differs depending on the type of fuel you use, where you live and how you pay for your energy.
The standing charge covers the costs to the energy companies of supplying your gas and electricity and supporting various government initiatives.
Last winter, the government helped all households with a universal £400 payment under the Energy Support Bill.

An easily spooked market

Russian pipeline gas continues to flow into southern Europe via Ukraine and Turkey, and Russia continues to supply liquefied natural gas (LNG) to Europe.
This means the market could be easily spooked by any interruption in gas supply, causing a short-term price spike.

Although these events had a minimal real impact on global supply, price spikes at the time show just how easily “spooked” the gas market is.
The main issue is whether or not Asian, and particularly Chinese, demand for LNG will be higher than last year, reducing gas availability for Europe.
China is still struggling economically post-COVID, which could push down energy demand from the world’s second-largest economy.

In the winter months, long spells of cold, gloomy weather with no wind drive up gas demand to compensate for the lack of renewable generation.
We also have to hope that France’s nuclear power stations stay online after a record number of outages last year.
If not, heightened gas demand in continental Europe would mean the UK has to pay more to buy gas from Europe’s stores.

Michael Bradshaw receives funding from the UK Energy System Research Programme and EPSRC in relation to his role as Co-Director for the UK Energy Research Centre (UKERC). He also advises Government, Think-Tanks and Companies on energy matters.

Why heating your home this winter may be even harder than last year

Retrieved on:

Tuesday, October 17, 2023

The UK government attempted to alleviate the impact of rocketing bills with a package of support measures.

Key Points:

The UK government attempted to alleviate the impact of rocketing bills with a package of support measures.
But that’s not the case for many billpayers – in fact, this winter is likely to be worse than the last for many households.
Although the unit prices of electricity and gas have fallen, there has been a steep increase in standing charges.
In fact, some low-income households use such small amounts of energy that they are paying little more than their standing charges.

Energy bill rebates ended

The £400 energy bill rebate paid to all households last winter has now ended.
This reflects the fact that energy is often seen by struggling households as something that can be rationed.

Cold homes can kill

Research last winter found that households in fuel poverty were underheating their homes, causing damp and mould that can create serious health problems and exacerbating anguish and stress.
The health risks of a cold home increase with repeated exposure.

What can be done to help?

There must be increased investment in efforts to insulate the UK’s leaky housing stock.
But with winter just weeks away, what can the government do right now?
Lucie Middlemiss receives funding from Horizon 2020, the Centre for Research into Energy Demand Solutions and the British Academy.
She has previously received funding from the UK Energy Research Centre (UKRI) and the Nuffield Foundation.

Energy price cap: a targeted 'social tariff' must be part of a much wider set of reforms

Retrieved on:

Friday, August 25, 2023

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The British energy regulator Ofgem has announced the energy price cap for the last quarter of 2023, including early winter.

Key Points:

The British energy regulator Ofgem has announced the energy price cap for the last quarter of 2023, including early winter.
Gas and electricity should be slightly cheaper than last year, but they are still too expensive.
The problem is the cap itself which, as I have written before, was never designed to keep energy affordable.

Energy price cap for this winter

It is good news that the price cap for the period between October and December is lowering slightly.
Experts predict that the price cap will rise again slightly in the first quarter of 2024.

Time for a social tariff?

On this basis, Brearley says Ofgem “would welcome a debate on the future of pricing regulation” and that the regulator is willing to “work with government on all options, including a social tariff”.
Among charities, consumer groups and industry, there is broad support for a social tariff targeted at people struggling with their bills.
Could a social tariff be developed that varies with income and energy use, as suggested by Citizens Advice?

Tinkering at the edges with energy affordability

Existing schemes such as the Warm Home Discount are operated by energy suppliers, with costs met through all consumer bills.
More generally, the “who pays” question is one that has already been raised and answered for the firms that supply energy to homes and businesses.
As such, it would make sense for any overhaul of the energy price cap to be part of a broader review to improve energy affordability.

Agreement on the sale of Hornsea 2 transmission assets

Retrieved on:

Friday, July 21, 2023

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The divestment takes place in accordance with the offshore transmission owner ('OFTO') regime.

Key Points:

The divestment takes place in accordance with the offshore transmission owner ('OFTO') regime.
In September 2022, following a competitive tender, Ofgem selected DTP as preferred bidder for the offshore transmission licence for the Hornsea 2 Offshore Wind Farm.
Ørsted will provide DTP with operations and maintenance services for the transmission assets under a long-term agreement.
Hornsea 2 is an offshore wind farm in the UK, located approximately 90 km off the Yorkshire coast in the North Sea.

Regulators including Ofgem use codes of practice to curb bad behaviour by businesses –– how to tell if this works

Retrieved on:

Wednesday, July 5, 2023

UK energy regulator Ofgem wants to make its voluntary code of practice on prepayment meters compulsory.

Key Points:

UK energy regulator Ofgem wants to make its voluntary code of practice on prepayment meters compulsory.
It introduced the code in April 2022 to protect people from being forced onto prepayment meters for gas and electricity.
Instead, Ofgem launched a code of practice in April to which UK energy companies voluntarily signed up.

What is a code of practice?

Regulators or industry bodies use a code of practice that typically cover the behaviour and actions of professions, companies or industries.
They are often voluntary, are sometimes referred to as self-regulation and can be developed by political institutions or by companies themselves.
Even the teachers at your children’s school are covered by a code of conduct.

Critiquing the code

Companies and industries have been criticised for using voluntary codes as a public relations tool to change perceptions rather than rooting out unethical practices.
Many codes are also believed to include little in terms of content that would lead to a meaningful change in practice.
Instead they often simply list what they are legally obliged to do or what they’re already doing.
It’s important that new practices are actually adopted as a result, as is the degree to which the code is embedded in the organisations.

What should you expect from a code of practice?

First, what does the code says about how behaviour will be monitored and enforced, and what are the consequences of noncompliance?
Based on the available academic evidence outlined above, Ofgem’s code could help to reduce unethical behaviour in the energy industry.
Ofgem’s decision to make the code compulsory would be a good way to ensure this happens.

Your energy bills are finally about to go down – here's why

Retrieved on:

Thursday, June 29, 2023

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The average annual household energy bill (including the fixed daily amount that you pay regardless of energy use) will fall by 17% from £2,500 to £2,074.

Key Points:

The average annual household energy bill (including the fixed daily amount that you pay regardless of energy use) will fall by 17% from £2,500 to £2,074.
The cap has been lowered because wholesale energy prices (the price at which your supplier buys energy) are falling and may be stabilising.
And even if your bill is falling, the drop may bring no sudden relief for several reasons.

Energy bills fall but squeeze on budgets remains

The energy bill support scheme which gave every household a £400 discount on their bill last winter ended in March 2023.
This, along with the emergency price guarantee replacing Ofgem’s price cap, kept bills lower than they would otherwise have been.
Second, the energy bills of businesses that supply goods and services – for example, producing and transporting the food you buy in supermarkets – are not covered by the cap.

Households are conserving energy

Energy bills are a big expense for most households at the moment, but moreso for those on lower incomes and those who can’t avoid using a lot of energy, perhaps due to medical equipment.
For better-off households, that meant cutting wasteful use – whereas in poorer homes, it probably meant underheating.

Ensure your direct debit reflects your energy use

For those paying for energy via direct debit, it’s worth checking that your monthly payments are reasonable for the amount of energy you are actually using.
My family’s own efforts to conserve energy over the winter meant we built up quite a substantial credit across our electricity and gas accounts.
There is still much to be done to ensure sustainable, accessible and affordable energy for all in the UK.

Osmose Announces U.K. Partnership Agreement with AUS Ltd.

Retrieved on:

Wednesday, May 17, 2023

(“Osmose”), the leading provider of critical resiliency, evaluation, life extension and restoration services for power utility and telecom infrastructure owners in the United States, Canada, Europe, and Australia, today announced an exclusive partnership in the United Kingdom and Ireland with Associated Utility Supplies Ltd (“AUS”).

Key Points:

(“Osmose”), the leading provider of critical resiliency, evaluation, life extension and restoration services for power utility and telecom infrastructure owners in the United States, Canada, Europe, and Australia, today announced an exclusive partnership in the United Kingdom and Ireland with Associated Utility Supplies Ltd (“AUS”).
AUS is the leading distributor, manufacturer, and service provider to power utility companies in the electricity transmission and distribution (“T&D”) space in both the U.K. and Ireland, as well as to the telecom and rail industries.
View the full release here: https://www.businesswire.com/news/home/20230517005266/en/
Founded in 1998, AUS manufactures, distributes, and supplies specialist equipment to the electricity supply, rail, arboricultural, and telecom industries and is located in Clayton West, Huddersfield, West Yorkshire.
Mike Adams, CEO of Osmose commented: “We are thrilled about this partnership with AUS.

Copenhagen Infrastructure Partners interconnector portfolio in the North Sea takes a leap forward

Retrieved on:

Tuesday, February 28, 2023

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COPENHAGEN, Denmark , Feb. 28, 2023 (GLOBE NEWSWIRE) -- Copenhagen Infrastructure Partners’ Flagship Fund’s interconnector portfolio has officially been included amongst the short-list of projects assessed for regulatory approval in the UK, in the so-called Third Cap and Floor Window.

Key Points:

COPENHAGEN, Denmark , Feb. 28, 2023 (GLOBE NEWSWIRE) -- Copenhagen Infrastructure Partners’ Flagship Fund’s interconnector portfolio has officially been included amongst the short-list of projects assessed for regulatory approval in the UK, in the so-called Third Cap and Floor Window.
CIP acquired close to full ownership in the 4.2 GW subsea interconnector portfolio in late 2022 from UK developer Volta Partners.
The Esbjerg Declaration of May 2022 underscored the need to make the North Sea a powerhouse of renewable energy.
The four countries (Denmark, Belgium, Germany, and the Netherlands) pledged to expand the combined North Sea offshore wind capacity to 65 GW by 2030.

Drax Group Deploys Solace to Power Up the UK's Electric Vehicle Drive

Retrieved on:

Thursday, February 23, 2023

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LONDON, Feb. 23, 2023 /PRNewswire/ -- Solace, the leading enabler of event-driven architecture (EDA) for real-time enterprises, announced today renewable energy company Drax Group has deployed Solace event streaming and management technology to underpin its industry-leading Electric Vehicle (EV) solutions, powered by renewable energy.

Key Points:

LONDON, Feb. 23, 2023 /PRNewswire/ -- Solace, the leading enabler of event-driven architecture (EDA) for real-time enterprises, announced today renewable energy company Drax Group has deployed Solace event streaming and management technology to underpin its industry-leading Electric Vehicle (EV) solutions, powered by renewable energy.
Supply chain disruptions are bringing to the fore the importance of balancing power, demand and supply, especially in the wake of wild energy price fluctuations.
To maximize energy efficiency, providers and consumers both demand real-time updates of commodity prices, which ultimately influence purchasing decisions.
To generate and deliver renewable power in the most efficient way and remain compliant with the programme, energy providers need real-time, event-driven data.

Drax Group Deploys Solace to Power Up the UK's Electric Vehicle Drive

Retrieved on:

Thursday, February 23, 2023

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LONDON, Feb. 23, 2023 /PRNewswire/ -- Solace, the leading enabler of event-driven architecture (EDA) for real-time enterprises, announced today renewable energy company Drax Group has deployed Solace event streaming and management technology to underpin its industry-leading Electric Vehicle (EV) solutions, powered by renewable energy.

Key Points:

LONDON, Feb. 23, 2023 /PRNewswire/ -- Solace, the leading enabler of event-driven architecture (EDA) for real-time enterprises, announced today renewable energy company Drax Group has deployed Solace event streaming and management technology to underpin its industry-leading Electric Vehicle (EV) solutions, powered by renewable energy.
Supply chain disruptions are bringing to the fore the importance of balancing power, demand and supply, especially in the wake of wild energy price fluctuations.
To maximize energy efficiency, providers and consumers both demand real-time updates of commodity prices, which ultimately influence purchasing decisions.
To generate and deliver renewable power in the most efficient way and remain compliant with the programme, energy providers need real-time, event-driven data.