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All the energy companies treat the price cap as a target not a cap. It’s ridiculous that no matter how cheaply we can produce gas for our own domestic market the global price is the deciding factor.
I don't think that's true. Energy suppliers have to sell at a price higher than they can buy it at. Energy suppliers are not necessarily energy producers as well. If you cap the output price but not the input price then there is no scope to stay viable. That is why so many of them have gone bust.

Its interesting to see what the prices are on the Octopus Agile tariff. These track the wholesale price at 30 minute intervals. A year ago there were times where the price went negative ie you were paid to use electricity. Over the last month it has hit the cap (at 55p unit) for most time periods. This also gives a clue as to where the next general cap will be and it won't be below 55p/unit unless they play fast and loose with the standing charge.

Market forces dictate that as a producer you sell to the highest bidder, especially as there is a bunch of market makers in the way. If you want to control prices you also have to control the market makers. Tricky as its now an international business.

Taxing the producers is one way of doing it, but you can only tax those that pay tax in your country. Otherwise the only option I see is to nationalise production in your own country and monopolise the local market. That requires you to have enough resources to supply 100% of what you need for all requirements. I'm not sure we are in a position to claim that.

If you want to cap the market for political reasons, then the government will have to subsidise the suppliers, because the original problem hasn't gone away. That is achieved by either higher taxes or higher borrowing.

Its a global market and we have no control over it, as far as I can see. Am I wrong? I hope so!
 
There are 28 million households in the UK. If he wants to freeze the price cap for 1 year then that's going to cost a minimum of £2000 for each household and very possibly more as he doesn't know where the wholesale price is going over that time period. I make that £56 billion not the £29 billion he claims it will cost.
Do you mean Labour want the magic money tree back off Sunak.
After all it was Labour that planted the seedling.

The bottom line is that debt looks to be increasing as a reality balancing is continually deferred.
But at some point those with greater capability that can't escape it, as they have limited capability (ie not rich enough) will be required to subsidise those with lower (and reducing) capability.

There is likely to be a levelling up of the lower and middle classes. Resulting in a 2 class system of the lower class and the elite untouchables, those who are designing a better world for everybody at Davos.

I know I'm wrong because that would be a conspiracy, and we don't have those, do we?
 
All the energy companies treat the price cap as a target not a cap.
They do at the moment, because the retail cap is set below the cost of energy to the energy retailers, meaning that they actually make a loss even if they sell at the maximum allowed under the cap. The thing that many either don't realise, or conveniently ignore, is that there are essentially three layers to the supply of consumer energy:
  1. The retail companies. They are currently selling energy at the maximum price allowed by the cap (to domestic consumers, there is no cap on commercial sales) and that price is below what is charged to them by...
  2. The generation & distribution companies. They operate in a tightly regulated market, and their profits are already capped. They buy their energy source(s) from...
  3. The "extraction" companies. These get the oil / coal / gas / whatever out of the ground and sell on the global market. The price they sell at is governed by demand vs. how much they can supply. At the moment, demand is outstripping supply so that drives the price up as a demand regulation mechanism - i.e. if you're not willing to pay the price you don't get the energy. Without that, there would have to be some other form of global(?) rationing mechanism simply because there isn't enough energy to satisfy the total demand. The side effect of the market is that these companies are currently making big profits
So bearing all this in mind how, exactly, does fixing (as Starmer has proposed) or reducing (as others propose) the consumer energy price cap solve the problem? And his "windfall tax" suggestion may have popularity on its side, but won't do much to encourage the extraction companies - who are the ones making the profit - to increase the supply quantity.

If our politicians decide collectively that some sort of energy price subsidy is required to get the country through the current period of high prices then all well and good, but the danger is that there will be no incentive (or reduced incentive) for consumers to reduce consumption and thus correct the otherwise ongoing supply / demand imbalance.
 
Draghi's thrown in the towel and Italy has to work out how to reformulate "populism" and anti-immigration politicise by September, especially if Germany can't continue to finance Italy's never ending debt dependency.
While it's tempting to just think that Italy has reverted to its usual ungovernable state, and also to lay the blame for that at the door of "populism", it's worthwhile noting that Italy hasn't had a prime minister elected by the population since Berlusconi in 2008. It's also worth noting that despite having a strong manufacturing and industrial sector, it has had zero growth for years (the debt is at least in part due to this) largely because its currency is overvalued in the Euro.
 
'There's no money in oil and gas'. The wisdom imparted to Scotland in 2014.
 
but the danger is that there will be no incentive (or reduced incentive) for consumers to reduce consumption and thus correct the otherwise ongoing supply / demand imbalance.

I think this is the key. Consumption needs to drop and there is plenty of scope for it to do so both domestically and in business. I've never worked in a business that took energy consumption seriously, There is massive scope for business to reduce consumption and reasonable scope for domestic consumption to reduce. When electricity hits 55p/kWh I think we will see a reduction not least from me. There will be nothing left on standby in my house as all the trivial few watts add up when you multiply them by 8760 hours per year. I know people who have the scope to halve their electricity consumption if they just turned things off.

When consumption does drop I hope they are going to reduce the "average" figure used for the price cap to give the media a little less scope for hysteria and also to base any government subsidies on an accurate up to date figure.
 
'There's no money in oil and gas'. The wisdom imparted to Scotland in 2014.
Context is all though!

At the time the Scottish government predicated future revenue on the increasing use of fossil fuels at a time that globally we were being encouraged to reduce their use.
 
I think this is the key. Consumption needs to drop and there is plenty of scope for it to do so both domestically and in business. I've never worked in a business that took energy consumption seriously, There is massive scope for business to reduce consumption and reasonable scope for domestic consumption to reduce. When electricity hits 55p/kWh I think we will see a reduction not least from me. There will be nothing left on standby in my house as all the trivial few watts add up when you multiply them by 8760 hours per year. I know people who have the scope to halve their electricity consumption if they just turned things off.

When consumption does drop I hope they are going to reduce the "average" figure used for the price cap to give the media a little less scope for hysteria and also to base any government subsidies on an accurate up to date figure.
Totally agree . Had numerous customers in the past that refused to have data -logging and air leak tests done on their machinery , at no charge! Go in most factories/workshops and you will actually hear compressed air leaking . As the "fourth utility" it is not cheap to produce and much money literally disappears into thin air .
 
Electric cars are increasing demand for a finite amount of electricity and driving up the price. The future does not look rosy for EV's if this is the case. Public hostility to EV's on the horizon?
 
Happy to watch over the next few years the greedy global Car Manufacturers row back on, and hopefully lose enormous amounts of money on this ludicrous scam that is Electric Vehicles. Never in my long life have I ever witnessed such a
completely pointless and utterly preposterous global Governmental directed debacle.
Woefully inept research/coatings/feasibility compounded with nonsensical design/development of infrastructure, all overseen by hapless and faceless Civil Servants in Whitehall who’s bloated egos have them blindly and very mistakenly taking the public for fools. We are now after successive Governments intervention incapable of providing even a basic level/supply of Electricity, outage’s already occurring. Why would anybody with an increment of brain capacity then openly promote/finance a huge extra strain on that capacity in the proposed sale of 33 million vehicles in the form of EV’s.
There… rant over.
 
Happy to watch over the next few years the greedy global Car Manufacturers row back on, and hopefully lose enormous amounts of money on this ludicrous scam that is Electric Vehicles. Never in my long life have I ever witnessed such a
completely pointless and utterly preposterous global Governmental directed debacle.
Woefully inept research/coatings/feasibility compounded with nonsensical design/development of infrastructure, all overseen by hapless and faceless Civil Servants in Whitehall who’s bloated egos have them blindly and very mistakenly taking the public for fools. We are now after successive Governments intervention incapable of providing even a basic level/supply of Electricity, outage’s already occurring. Why would anybody with an increment of brain capacity then openly promote/finance a huge extra strain on that capacity in the proposed sale of 33 million vehicles in the form of EV’s.
There… rant over.
You really ought to get off the fence and say what you think, you know 🤣

(sorry, I couldn’t resist)
 
Go in most factories/workshops and you will actually hear compressed air leaking . As the "fourth utility" it is not cheap to produce and much money literally disappears into thin air .
The company I worked for was meticulous about eliminating any compressed air leakage in its facilities. It's just too expensive not to. The only time you heard hissing compressed air was from the bore air gauges on the inspection tables 😎
 
The company I worked for was meticulous about eliminating any compressed air leakage in its facilities. It's just too expensive not to. The only time you heard hissing compressed air was from the bore air gauges on the inspection tables 😎
We recently sold a new compressor to a local engineering company and offered to do leak detection at no charge. Our engineer found 23 leaks/faults in the air ring main. All now rectified and they will recoup the cost of the remedial work in a relatively short time.
 
Why would anybody with an increment of brain capacity then openly promote/finance a huge extra strain on that capacity in the proposed sale of 33 million vehicles in the form of EV’s.
There… rant over.

It will be interesting to see where the money comes from to pay for the EVs.

The tone of talk about cars amongst friends, colleagues, and neighbours is more about sticking with what they have - reducing to one car.

Older people on non index linked pensions are thinking about being squeezed badly. Extending work past retirement to hedge their positions.

Younger ones are figuring that household energy and mortgage costs will go up.

So we're heading for a triple whammy - household costs going up massively - spending reduced - and likely relative drop in house prices. There's the added risk of commercial property dropping as well (reduced economic activity and reduced demand for office space with WFH).

And meanwhile it feels like our government is off on an extended break.
 
Can anyone explain why gas, where ever it comes from, and no matter how cheap it is, must be sold at the highest price on offer?
So Putin, or any other tin pot despot, can dictate the energy cost of the world.
True madness.
 
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