[Closed] These energy price rises...

on average only £68 per customer per year. Doesn't sound particularly outrageous.

* its actually 18.63 p

Where are the "massively increasing profits"?

Are you after headline grabbing figures ?

massively increasing profits for the energy companies year on year,

Really?

EDF, current Net Profit Margin of 4.37%. 5yr average of 4.38%
SSE, 1.73%
etc etc

British Gas
[img] [/img]

(yes I know that is BG marketing material, but the accounts back it up)

The Dividend yield for these company's is low, c.5%, there are not greedy shareholders growing rich off price gouging.

We're not even that expensive in the European market for electricity in p/kWh.

Seems like its very easy for you to ignore anything that does not fit with your view and then accuse others of diversion...oh the ironing

Well I certainly think that there is more to be done to help the vulnerable and less able to pay. But telling the energy companies to collect more revenue on ALL bills to pay for it is not the fairest way to achieve that.

I also happen to think that per minute profits figures are meaningless at worst and misleading at best, without the context of the revenue, margin and the amount re-invested.

We could get cheaper bills though by scrapping emissions and climate change programs and increasing reliance on coal for energy production.

there are not greedy shareholders growing rich off price gouging.

We're not even that expensive in the European market for electricity in p/kWh.

France is cheaper. I wonder why that is ? 🙂

[url= http://www.4-traders.com/EDF-4998/news/EDF--France-Allows-EDF-to-Raise-Electricity-Prices-5-in-2013-2014-17076351/ ]France Allows EDF to Raise Electricity Prices 5% in 2013, 2014[/url]

[i]"finding a balance between the conflicting goals of protecting households and maintaining EDF as an economically viable company"[/i]

It's almost as if the fact that EDL is a "French state-controlled power utility" makes a difference.

Centrica's adjusted operating profit rose 9% to £1.58bn for the six months to 30 June, up from £1.45bn for the same period in 2012.

The Dividend yield for these company's is low, c.5%, there are not greedy shareholders growing rich off price gouging.

British gas is owned by Centrica, I think you'll find that as a whole their profits are rather tidy, granted that this sort of business doesn't yield large dividends for shareholders, but still.

Just think that those profits could have gone into the coffers of Government like EDF and it's main shareholder instead of idiot privatisation.

EDF

Profit by that measure rose 6.9 percent in the first half to 9.7 billion euros ($12.9 billion), beating the 9.24 billion-euro median estimate of five analysts surveyed by Bloomberg. Net income advanced to 2.9 billion euros from 2.78 billion euros.

You will find that most electricity companies like other utility companies are owned almost wholly by pension funds for their steady but modest rates of return. Of course Pensions are horrible capitalist concepts and all, but it's not the same kind of capitalism as Private Equity/Hedge Fund asset plays or financial market jiggery-pokery.

The energy market actually works pretty well. As markets go it's a transparent one. Regulation hems in returns. Green levies effectively nationalise the country's environmental costs. We could of course just get rid of those, ignore the pan-European legislation that is due to come in Q2 2015 which will see the shutting down of a lot of the UK's coal fire electricity production. They could also pull out of the biomass conversion support pricing that will see the re-use of the old coal plants rather than their mothballing. OR how else should it be paid for? As above it's not like there's any room in the current EBITDA.

TT - you do know the difference between a change in profit percentage and profit percentage dont you? And also that when rates of profit as a percentage are low, percentage changes in that figure can be very much more volatile than if the profit were a high percentage to start with?

[u]Scenario A[/u]

YEAR 20XX
£110 Revenue
£100 Operating costs
£10 Profit
[b]10%[/b] Profit

YEAR 20XY
£120 Revenue
£100 Operating Costs
£20 Profit
[b]20%[/b] Profit
[b]100%[/b] increase in profit

[u]Scenario B[/u]

YEAR 20XX
£100 Revenue
£50 Operating Costs
£50 Profit
[b]100%[/b] Profit

£120 Revenue
£50 Operating Costs
£70 Profit
[b]140%[/b] Profit
[b]40%[/b] Increase in profit.

[u]Scenario C[/u]

YEAR 20XX
£110 Revenue
£109 Operating costs
£1 Profit
[b]0.9%[/b] Profit

YEAR 20XY
£120 Revenue
£100 Operating Costs
£20 Profit
[b]20%[/b] Profit
[b]2000%[/b] increase in profit

Utility companies working on thin margins are much more like C than B,

Well of course not when written that way which is why you did it
20 p per day* per customer would not sound that bad either till you realise how many millions of customers they have and that they are raising prices again to make more money.

You're using evocative language to try to make your point, but ultimately they are raising their prices to maintain a 4% profit margin. It's a business. That's how they work.

You could, of course, switch to a provider like Co-Operative Energy which is owned by its customers, and save a fortune because all those big nasty energy companies are gouging customers for profits. Oh, wait. It's actually slightly more to use Co-Op Energy. Who'da thought it?

Oh, and the reason France is cheaper is because they don't have to import their electricity. Instead, they lovingly hand-craft it and then flog it to us.

Without fail, any media discussion about price rises includes an expert who suggests we make sure we don't leave the tv on standby.

It's my bloody gas bill that's getting out of hand, not the leccy!

You will find that most electricity companies like other utility companies are owned almost wholly by pension funds

Pensions for who ? Three of the big six energy companies are foreign owned. The company that made the gas connection on my site recently is owned by a Canadian teachers pension fund ffs.

.

As markets go it's a transparent one.

[url= http://www.powerengineeringint.com/articles/2013/07/mps-slam-uk-s-big-six-energy-firms-and-regulator-over-lack-of-profit-transparency.html ]MPs slam UK’s ‘Big Six’ energy firms and regulator over lack of profit transparency[/url]

You're using evocative language to try to make your point,

Im sure some part of your pension pot comes from Canadian pockets too Ernie 🙂

As for the "MP's report"...
It's written by MPs. Just because they dont understand something, doesnt mean it is beyond comprehension.

Well if the House of Commons Energy and Climate Change Committee doesn't understand how the energy companies make their profits, what chance have I got ?

I'm out...

France is cheaper due to the proliferation of nuclear power stations i.e. they have more than enough capacity for france's needs AND enough left over to export some.

When Labour took power in 1997 one of the key tasks in hand was to make decisions on how to replace the significant number of coal and ageing nuclear powered stations that were scheduled to be shut by 2010.

Somewhat predictably no new power stations were approved so the only tangible thing that Labour / Ed Milliband as energy sec did was to sogn up to decarbonisation plans that were more "ambitious" (costly) than the rest of the world and also agree rates for renewables at a cost of 400% the cost of existing supplies.

The combination of lack of supply and the additional costs on suppliers (and retail customers) of decarbonisation / home insulation have come home to roost. The only surprising thing has been the re-writing of history by Ed Milliband who seems to have forgotten the decisions his government failed to make and his own complicity as Energy Sec for decisions that were made and have significantly added to retail bills.

And in other news, National Grid have forecast a record number of black outs this winter due to lack of supply...

El-Bent: you realise Centrica are making good profits on their Upstream business, not so much downstream.

Higher international upstream gas and oil production and profitability; continued good nuclear performance; UK gas-fired generation loss making in weak market conditions

&

British Gas Residential operating profit marginally higher than in 2012, with significantly higher environmental and commodity costs offsetting the impact of increased consumption due to prolonged cold weather

They made around £600 million profit from residential customers in 2012 & 2013, compared with over £1 billion paid in direct corporation tax.

More nukes then eh? Hey nuke fans:

Q: What electricity consuming appliance do you own that justifies it's emissions of nuclear waste?

I quite like the lights on and hot food.

France is cheaper due to the proliferation of nuclear power stations i.e. they have more than enough capacity for france's needs AND enough left over to export some.

And what invested and built those power stations, the state controlled energy sector or the private sector?

It's a bit like explaining that French railways are cheaper and more efficient than British railways because the French have invested more.

ooOOoo - Member

Q: What electricity consuming appliance do you own that justifies it's emissions of nuclear waste?

Bread machine. Any price is worth paying

My whole point of this thread is that we consume too much energy - if we used less, then these price increases would not be such an issue.
As an added 'bonus' we would also have more capacity in the system, would not need to build as many power stations and sources in the future.
And efficiency measures (compared to generation) are usually maintenance free - insulation, draft proofing, solar gain, closing the curtains etc.

And efficiency measures (compared to generation) are usually maintenance free - insulation, draft proofing, solar gain, closing the curtains etc.

But most people do that anyway. Who the hell hasn't got loft insulation or has howling gales blowing through their houses ?

Bread machine. Any price is worth paying

I'd rather handmake, but it gets laborious when you're doing it all the time (gluten free- doesn't keep well, and tbh even at its best is not amazing! Oh, also the dough I use can't be kneaded, it's more like custard)

That's a wee bit off topic though. But I would burn the world if it would power my shitty Kenwood in order for me to have a substandard cheese sandwich for lunch on monday.

But most people do that anyway. Who the hell hasn't got loft insulation or has howling gales blowing through their houses ?

So you live in a house with a badly fitting exterior door, it doesn't mean that everyone else in the country does. Nor does it mean that 'daylight round the door' is the normal standard of installation in the UK.

Most people have done as much as they can to minimize heat loss in their homes, often too much imo. People often end up with damp issues, with the health complications it can lead to, precisely because they want to live in a sealed heat retaining environment and never open a window.

Perhaps more people who live in old Victorian houses should replace their old sliding sashes with new uPVC double-glazed units from Everest, but that costs money, and it is those who are struggling most with their heating bills who can least afford to carry out major renovation work to their homes.

And as you have pointed out, some people live in rented accommodation, why would they replace badly fitting doors - are you going to replace yours ? And why would the landlord care if their energy bills are high ?

Perhaps more people who live in old Victorian houses should replace their old sliding sashes with new uPVC double-glazed units from Everest, but that costs money, and it is those who are struggling most with their heating bills who can least afford to carry out major renovation work to their homes.

I can highly recommend the uPVC sash windows from Anglian. Had mine fitted about 14 years ago and they were worth every penny - no condensation, no draughts, match the house nicely. House still loses heat like a sieve mind, just not through the windows....

Youd be surprised ernie.

Amount of rentals ive walked away from due to substandard and down right horrific insulation and over enthusiastic ventalation is crazy - yet folk still rent em.

But I would burn the world if it would power my shitty Kenwood in order for me to have a substandard cheese sandwich for lunch on monday.

Can you eat Polenta that makes nice bread?

yet folk still rent em

Isn't that precisely the point I made ?

I thought I had when I said : [i]"And why would the landlord care if their energy bills are high ? "[/i]

Land lord would soon care if people voted with their feet and didnt rent their crappy rentals.

Ernie - we have been suckered into building more and more energy sources: govt. grants and levies go back into big projects, not individual houses.
Then, when you relatively compare the old houses, the poor houses with the 'good' or (gasp) 'eco' houses, they look OK. We have accepted that we need to heat our houses for many months a year. We do not do good/excellent levels of insulation, airtightness, water pipe runs etc.
.
This is a reflection of government policy; of developers who want to build the cheapest houses they can, and of most people who would rather buy another holiday or kitchen than invest for a lower energy bill. It is a culture that says 'consuming lots of energy is ok'.
.
The few that insulate to a high standard are too few; more insulate a bit and think that is OK, and a bunch of people do not have awareness (or motivation).
.
We also need to be ruthless in either flattening more houses and rebuilding to super insulated, passive solar gain, 'continental' standards (with mechanical ventilation) - or work with people to invest in more expensive retro-fit energy saving measures.
.
I go back to my starting point: the energy companies have just made use of the market we created. The people to be cross at are our 'leaders', builders and ourselves.

Slight issue is matt

Alot of old houses were built propperly

Most modern housing withthe exception ofa few smaller builders are just not going to last.

You can do alot with an old building if your prepared to think and spend money on it - beylond just throwing insulation and sealing drafts - as ernie points out that creates more issues than it solves

Mines a 1950s ex cooncil but i spend less on fuel than many of my colleages thanks to led light bulbs ,good thought out insulation( not just heaps of rockwool piled in) - certain walls have been dry lined . thick curtains , blinds , bckdraft shutter on extractors , modern boiler with well thought out rad placements and pipe runs

I agree trail rat - hence the need to choose to flatten more houses.

Or stop building crap housing as we do at the moment.

The people to be cross at are our 'leaders', builders and ourselves.

Why what's wrong with the building regs ? The energy efficiency requirements have been repeatedly tighten up for the last 50 years.

And why are you blaming builders ? Builders don't write the regs.

EDIT : [i]"hence the need to choose to flatten more houses."[/i]

But apparently you don't like the energy efficiency requirements on new housing, so what's the point ?

Difference is meeting insulation regs while barely scraping together a building .

My favorite is the lack of sarkin in roofs these days - truss - membrane - tile

Awesome.

My favorite is the lack of sarkin in roofs these days - truss - membrane - tile

😕 What are you talking about ? Lofts have to be insulated. And maintaining a [u]cold[/u] well ventilated roof can be quite desirable, unless you don't mind condensation issues.

Why what's wrong with the building reg

Our last house was built in 1998, and tbh it was the cheapest house I've ever lived from a heating perspective. Very warm and no draughts, in fact sometimes we'd open a window in winter just to cool down.

So it's not all crap.

They are poor, where energy efficiency is concerned

Well go on then, hit me with it........how would you improve the building regs ?

And explain why you want new housing to be built as in [i]"the need to choose to flatten more houses"[/i]
if you don't like the way that new housing is built ?

It is worth checking you've done everything you can. For instance (after living in our house for 12 years) I knew we didn't have cavity wall, but thought we had done everything else possible. But:

One day, whilst I was in the loft working out a wiring run, I discovered that the boarded section of our loft wasn't insulated AT ALL! That's about 60% of the roof area and 12 winters of gas Central heating working full blast. Couldn't believe it.

Then, whilst we were on holiday this summer I noticed that we used 16 cubic metres of gas in 10 days and we weren't even at home! On investigation I realised our water heating was controlled with a thermocouple at the boiler, not a cylinder stat, meaning that the burner would fire up every 10 to 15 minutes and run for 5 or 10 minutes. It meant that 50% of our gas useage was for hot water, and most of that was heating the hot water circuit so that the thermocouple was kept at the right temperature. Another 12 years of 1000's kWh of gas wasted. Couldn't believe it.

I'm now fully insulated in the loft and walls and have a cylinder stat fitted. I'm now waiting for the next revelation about where I'm wasting energy......

Whats sarkin got to do with insulation? Its great when a tile or 2 gets damaged and rain starts to pish in

Quite like my sarkin , felt , battens , clay tile arrangement

Whats sarkin got to do with insulation?

That's exactly what I thought. So why did you mention it in a discussion about making homes more energy efficient ?

Bang your head ? I was referring to poor building practice as a bad reason to knock down solid old housing stock

Well it's got nothing to do with 'poor building practice' in the same way as it's got nothing to do with poor insulation.

Sheeting out a roof with plywood (which would be immeasurably stronger than milled timber) would add very little to the cost of a house. It's not done because it's pointless and is more likely to cause problems than solve any.

how would you improve the building regs ?

Start by reading up:
http://www.aecb.net/publications/publication-categories/carbonlite/
The energy standards particularly.

Matt, skim read the thread so apologies if discussed.

I'm in a bungalow so roof area is double that of an average house, no deals available for me at the moment and DIY stores no longer doing the 3 for 1 deal on loft insulation (I have been waiting all summer in the hope they start doing them for winter). Whats the most cost effective way to insulate my loft?

spooky, there is no more cheap insulation deals like the recent past. They were funded via the green levy on energy bills. That money is now part of the Green Deal.

^wot he said. All in the pockets of big companies now.
Go to big shed DIY and buy whatever works out cheapest.

I would love to update our house but its listed. Took us 15 months to get consent to replace 1/3 of our windows with double glazed units. The rest have to stay single glazed & putty.
The number of houses that I have surveyed over the last year to two with severe condensation problems caused by racking up loft insulation without considering ventilation.
New building standards have improved over the last 10 years in general particularly with air tightness, but thermal bridging remains the major challenge. The lack of any real movement in this area is frustrating for anybody in the industry that cares.
the failure to replace the "accredited details" with a formal scheme is something that the politicians can be proud of.That original intentions were there, just no guts to see them through.

Start by reading up:

Is that it - a link to a company's website ? I don't suppose anyone is going to bother reading all that why can't you just explain, at least in general terms, how you would change the regs ?

And also what are the costs savings involved are likely to be, since after all the whole purpose of your increased energy efficient homes is to reduce costs to consumers - one does not necessarily follow the other you know.

For example solar (photovoltaic) panels have a life expectancy of approximately 25 years, which is about the amount of time it takes for the savings to cover the cost of the panels. Photovoltaic panels [i]are[/i] a good idea, but not because they significantly reduce costs to consumers - they don't. Solar water heating on the other hand provides a much more sound economic argument.

If the building regs could be undated in such a way so that the result would significantly reduce overall costs to the consumer then I'm sure they would be.

In the meantime I think consumers are perfectly justified in complaining about the constant over inflation rise of energy prices :

[url= http://news.sky.com/story/1017576/heating-bills-rise-63-percent-in-five-years ]Heating Bills 'Rise 63% In Five Years'[/url]

Is that it - a link to a company's website

For example solar (photovoltaic) panels...Solar water heating

in other words Passivhaus".
even if you were to build 200000 new builds a year, its small fry compared to the overall housing stock, & there just isn't the political will there to build that many new builds let alone crate the infrastructure for control of both design & operational assessments.

drop U-values to about half what they are now. Reduce cold bridging a similar amount. Reduce air leakage to a third of current regs. All this has to be proved when the house is built: not a fancy drawing or spec.

How would you actually achieve that ? Houses built today have less than a quarter the U-values houses over 50 years old have. And what would the cost be to the consumer ? What would the savings be ?

I don't believe that air tightness can be reduced to a third of what it is now. What more can you do than polythene all the walls and the ceilings ? If it was physically possible people would probably die of suffocation in their sleep - they would be living in the equivalent of a sealed jam jar.

And btw the air tightness is tested on site after houses have been built, it isn't just proved on a [i]"a fancy drawing or spec"[/i].

They are not an efficiency or reduction: they generate power. That is not what is being discussed.

Of course it's efficiency - solar panels are using the solar energy which hits the roof to convert it into either hot water or electricity. If that isn't energy efficiency then I don't know what is, it's "using less energy to provide the same service".

Interesting though that you didn' have solar heating in mind.

And btw the air tightness is tested on site after houses have been built, it isn't just proved on a "a fancy drawing or spec".

This is not done on new build domestic houses ( in England at least)

Oops what was I thinking.

[url= http://www.nhbc.co.uk/ProductsandServices/ConsultancyandTesting/Airleakageservices/documents/filedownload,46547,en.pdf ]Part L they do test a sample of new houses[/url]

Thatll be the air tightness test done with tape over fail pointa then is it ?

Air tightness has to be countered by controlled ventilation, whether passive or mechanical which can lead to good overall results, & i'm lead to believe a more healthy living environment.
The air pressure process is not great, but I believe that big difference is the fear of the risk of a failed test. Yes there have been instances of over zealous use of sealant & tape early on but as an industry, we are getting there. There of course will always be the some fails.
The industries next big challenge is thermal bridging, lighting & hot water. Chasing U values once you get below 0.1 starts to become uneconomic

Air tightness has to be countered by controlled ventilation, whether passive or mechanical which can lead to good overall results, & i'm lead to believe a more healthy living environment.

Surely we can ban new housing from having trickle vents included with all windows, and extractor fans in bathrooms, toilets, and kitchens, just think of all the heat that's being lost !

What we need is homes so air tight that vacuum pumps are required before the front door can be shut.

Instead of complaining that heating bills have risen by 63% over the last 5 years.

What we need is homes so air tight that vacuum pumps are required before the front door can be shut.

You mean something driven by better building regs and improved practices in the construction industry?

Better airtightness coupled with better insulation, less thermal bridging, healthier and less carbon-intensive materials and overall easier to use so the consumer can get the best out of them.

That - but retrofitting is the bigger concern by far. Something like 75% of the buildings that will be standing in 2050 are already built - so retrofitting is THE pressing concern.