Vocal Voices

The US firm CF Industries are shutting down their ammonia plant which produces 33% of UK CO2 as a by product.

This is due to a doubling of energy prices including the gas they are converting to ammonia. Last year they were a 66% producer of UK CO2 and it was a bigger problem when they shut down; this year at 33% with already having shut down half of their operations earlier in the year, the country is less impacted.

That being said, the longer these energy prices go on the more stuff will shut down. I've also been reading about business energy contracts which are expiring. Companies are refusing to renew, which means the business can then be put on a daily varying tariff which will more than double energy costs. Also companies are refusing new customers because they are losing money on every customer they take on due to the energy caps.

Essentially most of the energy companies in the UK are already bankrupt and are simply putting off the day when they have to go into receivership. I guess they are hoping for a miracle like a raising of the price cap by 10x and a 50% fall in energy costs.

All out of miracles. We can just wait for the domino's to fall.

You do have verifiable claims for the !0x price cap and 50% fall in energy cots to support your argument. No, thought not.

Fantasy economics rules, try Truss and Sunak for details.

Most of us live in the real world. We are being hit by these prices. Not in the outrageous way the media presents, but we are still being hit.

Maybe the Build Back Better conspiracy theorists have been right all along.

Workingman wrote:You do have verifiable claims for the !0x price cap and 50% fall in energy cots to support your argument. No, thought not.

Fantasy economics rules, try Truss and Sunak for details.

Most of us live in the real world. We are being hit by these prices. Not in the outrageous way the media presents, but we are still being hit.

WM for a fairly intelligent and extremely grounded person you have blinded yourself to the facts.

https://tradingeconomics.com/commodity/uk-natural-gas

Set the time line to all.

Anyone who got a 3 year gas contract in the first half of 2020 is paying for gas based on a wholesale price which was nearly 30 times less than it is today. Current price caps are based on average gas prices over the last decade which were 10 times lower than they are today.

If gas prices continue as they are expect the energy cap to continue to rise until it hits £10,000 or more.

If that cap doesn't rise, every gas supplier in the UK is going to go bust. Most of them technically are today, all bar the receivership.

Today every bit of energy you consume, outside of vehicle fuel, comes at a massive discount from the actual cost of the materials.

Well all but the despised "windmills" and solar.

Au contraire, I am not blinded.

Not many of us buy our energy in bulk years in advance so do excuse us if we cannot be arsed in converting what the spivs are buying Therms/USD to BTU or cubic yards/cubic feet to GBP, bought on some day, to make a few bob (£millions), to m³ or kWh. We are not thick, or only 'fairly' intelligent, we are just living the day.

Most of us buy our energy as we use it and pay quarterly or monthly by DD or some other way. So here are a few 'real' facts.

My electricity is metered in kWh and the cap, April to September 2022, sets it at £0.28 per kWh, which is what I pay. In October that will rise to £0.52 per kWh.

Gas is different. It comes in a 'wrapper' of m³ at a cost of £0.0703 per m³. Each 'wrapper' contains the equivalent of between 11.15 and 11.2 kWh, and that is what I pay - currently 7p / kWh. There is a little calculation to do, but with the very small numbers (calorific value variations etc.) the constant is fairly accurate. It is what the gas producers use. The kWh value rises to 15p in October.

Those are the only known values as of today. Who says? Ofgem does.

Checking your rate and saving on your bills
The price cap limits the rates a supplier can charge for their default tariffs. These include the standing charge and price for each kWh of electricity and gas (the units your bill is calculated from). It doesn't cap your total bill, which will change depending on how much energy you use.

It is the unit price that is capped, not your bill and this is where my "fantasy" claims stemmed from. Apologies if it was not clear. The media is using some fictitious 'typical household' that does not exist, on an unfathomable 'average' usage to produce cap figures of £2,000, £3,500. £4,200, £5,300, and the latest of £7.700!!! for total bills without knowing what any household will ever use and from 'caps' not yet published. It is all guesswork for click-bait headlines.

It really is scaremongering.

The chart I posted is the cost of energy to your suppliers.

Those suppliers sell it to you on contract, out of contract or pre pay.

The chart shows that those companies are now paying North of 20 times what they paid for the gas, in q2 2020, that they sell to customers.

Has your bill gone up 20 times? No it hasn't. Which means those companies are losing money on every therm they sell to you.

This means the energy cap will continue to rise until they stop losing money.

It is as simple as that and that is not scaremongering.