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Now for the energy crunch

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  • Now for the energy crunch

    We've had the credit crunch - now we're in for an energy crunch By Richard Evans

    Horrified motorists who have watched the price of fuel soar will need no reminding that record oil prices have another sting in the tail: when the price of crude oil rises, so too does the cost of the natural gas we use to heat our homes and generate electricity.
    The only consolation is that summer is coming. Lack of demand tends to keep the price of gas down, and of course we won't be using the central heating much. But some experts think the reprieve will be temporary; the energy markets are signalling that prices are likely to remain high - possibly for years.

    So how likely is it that our gas and electricity bills will soar when the colder weather arrives - and what can we do about it? "It gets more certain every day that prices are going to jump - perhaps by 40 per cent," says Mark Todd of Energyhelpline, the price comparison service. "All the suppliers confirm that prices are likely to go up this summer and I think severe increases are very, very likely. What's unusual about this year is that gas prices are going up in the summer; normally they go down." The "spot" price - the cost of gas for immediate delivery - has risen by 22 per cent recently, he adds.
    "Meanwhile, the cost of gas for delivery in the winter is twice last year's price - and prices for the following two winters are high too. This is also very unusual." Energy companies buy a mixture of spot and forward gas, he explains, so predicting the effect on our bills is not an exact science. "But my best guess is that we will see two rises totalling 40 per cent for a family's typical spend on energy," says Mr Todd.
    "The first rise of perhaps 10-20 per cent could come between July and September, followed by another of 20 to 30 per cent between January and March next year." Gas would go up by more than electricity, reckons Mr Todd. "The total rise in the gas price will be 50 per cent, I expect, while electricity could go up by 30 per cent across the two increases." On the basis of the market's future pricing of gas, he thinks energy prices will remain high for one to two years.
    "We've had the credit crunch - now we're in for an energy crunch. Some people don't realise how big their energy bills are - the average now is £1,050 a year. If prices rise as we expect, your annual bill could be £1,600 by March. Not many people have that kind of spare cash."
    The good news, says Mr Todd, is that we can protect ourselves from these punishing price increases by switching to a fixed or capped tariff. "There are some great-value caps and fixes around. You could end up paying no more than you are now on a variable deal - a good fixed tariff should let you cap your bills at £1,000-£1,100," he says. "People who work in the industry are all switching to fixes. My advice is: get one right now. Capped or fixed prices will go up within weeks." Others are more cautious, however. "Prices will go up, but I don't think anyone can truly say by how much - or when," says Scott Byrom of moneysupermarket.com, another switching service. "There are even signs of a price war breaking out in the variable tariff market, with npower cutting its price recently. I wouldn't be surprised if British Gas followed suit. And no supplier wants to be the first to raise prices - that way they get all the bad press."
    So if you just want the best price available today, says Mr Byrom, an online variable-rate tariff is the way to go. Online tariffs are almost always the cheapest as there are no paper bills and you pay by direct debit. But if your finances couldn't cope with bigger bills, switching to a fixed or capped tariff now is a good idea, he reckons.
    "If you need the reassurance of prices that are guaranteed not to rise, a tariff fixed for two or three years is a good bet - although for a fix to save you money overall, prices would need to go up by 20 per cent." If you pick a good online variable rate now, he says, you can always switch to a fix later, as there are generally no restrictions on moving from non-fixes after 28 days. "But if you come off a fixed rate before it expires, there is often a penalty - British Gas charges a £75 termination fee," says Mr Byrom.
    Asked to name some good fixed-rate offers, both experts point to npower's Fixed Price 2011, which expires in January of that year. "It's more expensive than other caps but lasts much longer," says Mr Todd - and there is no penalty for leaving early. "E.On's Price Protection 2009, on the other hand, is cheap but short, as it expires in October next year." Not all suppliers offer these tariffs at the moment and they tend to be duel-fuel only.


    If you do want to find a new energy deal, a price comparison site is usually the best way, says Georgina Walsh of Energywatch, the consumer watchdog. "Use one that has our seal of approval," she adds. You can see the list of Energywatch-accredited sites by clicking here. Switching normally takes about six weeks and there is no interruption to supply, although you should take your own meter reading on the day of the changeover.
    "We will almost certainly see double-digit increases in energy prices before the end of the year," adds Ms Walsh. "Every 10 per cent rise puts 400,000 people into energy poverty. For them and other consumers pushed to the brink by the credit crisis, these increases could be catastrophic." Customers who face difficulty paying their bills should contact their suppliers straight away, as they may be able to help.
    A tighter energy market could encourage suppliers to make their terms and conditions more restrictive, says Ms Walsh, so check the small print carefully before you sign up to a new tariff. "And we may see more doorstep sellers. If you are on the receiving end of their sales pitch, don't sign anything there and then, just ask them to leave a leaflet. You also have 14 days to change your mind."
    Switching to a better tariff isn't the only way to cut your energy bills - you can also reduce your consumption. The Energy Saving Trust offers simple tips to help you use less energy, as well as an online calculator that works out how much money you could save by taking steps such as insulating your loft or switching to low-energy light bulbs.

  • #2
    Re: Now for the energy crunch




    Energy bills could go up by 40%


    Energy bills could rise from £1,050 on average to almost £1,500

    Household energy bills could increase by as much as 40% this winter, the BBC has learned, as oil and wholesale gas prices hit record highs.
    The increases could mean households paying £400 more a year on average for their gas and electricity, senior industry sources have said.
    The increase is far more than analysts have predicted in recent months.
    It would put more pressure on homeowners already struggling with higher food and fuel costs.
    Announcements are most likely to come in August, when energy bills are not at the forefront of people's minds, says BBC business correspondent Nils Blythe.
    There is a great reluctance in the industry to be the first to reveal a big rise, so the rises may be unveiled in stages, our correspondent adds.

    Wholesale gas prices have risen dramatically in the last 12 months

    The prediction from senior sources in the energy industry is the highest yet.
    However, some analysts forecast the increases will be nearer 25%.
    'Massive effect'
    The news comes on the same day that Chancellor Alistair Darling called for restraint in pay settlements to prevent the UK falling into an "inflationary spiral".
    However, Dave Prentis, general secretary of the public sector union Unison, warned that a large rise in energy bills would have a "massive effect" on his workers and could lead to some pay negotiations being reopened.
    "We reached a three-year agreement in health at Easter when the retail prices index [measure of inflation] was much lower than it is now," he said.
    "If prices continue to spiral, that health agreement will be opened and if the government says we are not going to, then we will take industrial action," Mr Prentis said.



    According to Capital Economics, a 40% jump in gas and electricity bills would add 1% to the Retail Prices Index measure of inflation, which currently stands at 4.3%.
    Wholesale rises
    Last month, Centrica - which owns the UK's biggest energy provider, British Gas - signalled that gas prices for customers could increase again in 2008, as it was being squeezed by rising wholesale prices.
    According to industry watchers Platts, the wholesale price of gas has risen 74% since the start of the year, with gas to be supplied in winter 2008 hitting a record high last week.
    The wholesale gas price is closely linked to the price of oil, which itself hit a record high of just under $140 a barrel this month. In January, a barrel of oil cost $100.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

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    • #3
      Re: Now for the energy crunch

      woolly jumpers and candlelight it is then!
      if things keep rising at this rate there's gonna be allot of very cold low income households this winter!

      Comment


      • #4
        Re: Now for the energy crunch

        I am putting a padlock round my tumble dryer. Back to clothes airers it is. No chance of drying stuff on the radiators cos we won't be able to afford to trun the gas on lol.
        Is no longer here

        Comment


        • #5
          Re: Now for the energy crunch

          Reminds me I need a new clothes airer - didnt fare too well as a climbing frame.

          In the winter I'm kind of stuck with tumble dryer cause house it too damn cold I was putting washing up on airers and it was still wet 4 days later.

          Think I need to look into a bit of extra help fuel cost wise this year.
          #staysafestayhome

          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

          Received a Court Claim? Read >>>>> First Steps

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          • #6
            Re: Now for the energy crunch

            Page last updated at 12:36 GMT, Friday, 30 May 2008 13:36 UK
            E-mail this to a friend Printable version
            Battling bills - what help is there?


            With average gas and electricity costs now totalling more than £1,000 a year, many families may be worried about paying their fuel bills this winter. This guide outlines what help is available.
            KEY NUMBERS
            Home Heat helpline
            0800 33 66 99
            Energywatch helpline
            08459 06 07 08
            Eaga benefit entitlement check
            0191 247 3800

            As well as the general help listed here, suppliers often offer grants, special tariffs and other measures on a case-by-case basis.
            If you are having trouble paying your bill you should check with your supplier to find out what help is available from them.

            General government help
            Help in England
            Help in Scotland
            Help in Wales
            Help in Northern Ireland
            Energy company help



            GOVERNMENT PAYMENTS
            WINTER FUEL PAYMENT
            What is it?
            A tax-free annual benefit, it is usually paid from November.
            Who is eligible?
            Those aged 60 or over and who normally live in the United Kingdom.
            How much?
            How much you get varies according to personal circumstances. In 2008-9, the government is increasing the payments to £250 for over-60s, and to £400 for over-80s.
            How to apply?
            If you have not had the payment before and are not getting a state pension or another benefit (apart from housing benefit, council tax benefit or child benefit), the payment will not be automatic: you need to apply.
            You can get a claim form by calling 08459 151 515.
            Or see this page on the Direct.Gov website.

            COLD WEATHER PAYMENT
            What is it?
            The payment is made when the average temperature is recorded as, or forecast to be, 0C (32F) or below over seven consecutive days.
            Who is eligible?
            You are entitled if you receive the following:

            pension credit

            income support or income-based jobseeker's allowance and there is a child aged under five in your family

            pensioner premium, higher pensioner premium or enhanced pensioner premium

            a disability premium or severe disability premium

            a disabled child premium or a child tax credit that includes an individual element for a child or qualifying young person who is disabled or severely disabled
            How much?
            A one-off payment of £8.50.
            How to apply?
            The payment is made automatically.

            Return to top

            GOVERNMENT SCHEMES
            WARM FRONT ENGLAND
            What is it?
            A grant scheme in England providing heating and insulation in privately owned or rented homes.

            The Warm Front scheme can fund thermostat-controlled heating

            Depending on an applicant's needs, it will pay for things such as loft insulation, draught proofing, gas room heaters with thermostat controls, gas, electric or oil central heating.
            Energy advice and two low-energy light bulbs are also available.
            Who is eligible?
            You may get a grant if you get one or more of the following benefits:

            working tax credit (with an income of less than £15,460 and which must include a disability element)

            child tax credit (with an income of less than £15,460)

            attendance allowance

            disability living allowance

            income support (must include a disability premium)

            housing benefit (must include a disability premium)

            council tax benefit (must include a disability premium)

            war disablement pension (must include a mobility supplement or a constant attendance allowance)

            industrial injuries disablement benefit (must include constant attendance allowance)

            you have a child under 16, or are pregnant, and get income support or council tax benefit or housing benefit or income-based jobseeker's allowance or pension credit

            you are aged 60 or over and get pension credit, or council tax benefit, or housing benefit or income-based jobseeker's allowance
            How much?
            Grants range up to £2,700 - or up to £4,000 if your home needs oil central heating.
            How to apply?
            You will need to complete an application form before an adviser visits you to assess and recommend work for your property. Call 0800 316 2805.

            Comment


            • #7
              Re: Now for the energy crunch

              Now is the time for the government to invest in research into affordable solar/windpower and alternatives to petrol so we can not be held to ransom any more and then to remove VAT from recommended systems.

              How about opening a university for energy saving research and Ideas for the Uk where the students do not have to pay fees.

              Then we could attract the best brains from all over the world and be innovators in this field ( mind you cynical old me thinks the knowledge is already there - its all political!)
              "What makes the desert beautiful is that somewhere it hides a well." - Antione de Saint Exupery

              "Always reach for the moon, if you miss you'll end up among the stars"


              Comment


              • #8
                Re: Now for the energy crunch

                well my electricity company (British gas) have just informed me that my monthly budget payment is going up from £30 to £86!! This is not because of the recent increases, its because the stupid idiots took no notice of me whatsoever when i told them ages ago that £30 quid wouldn't be enough. Huh!

                But on the plus side, as i am on a fix and fall plan, the latest round of energy increases will not affect me as I am fixed until September 2009. Then my payments will probably go up by about one million percent and I'll have to go and live in a shack with no amenities. Or my garage......
                Is no longer here

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                • #9
                  Re: Now for the energy crunch

                  The government profess to support solar/windpower/earth energy etc but accessing any grants (cause they do offer them) is nigh on impossible and the cost of installing makes it a bad long term investment over the savings as it stands.

                  Not sure what happens with these new 'eco villages' popping up. I would assume the properties attract a pretty heafty premium.
                  #staysafestayhome

                  Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                  Received a Court Claim? Read >>>>> First Steps

                  Comment


                  • #10
                    Re: Now for the energy crunch

                    Old news but still worth a read

                    From The Times

                    January 24, 2008
                    20,000 wind turbines - plus a 15% rise in electricity bills

                    Lewis Smith, Robin Pagnamenta and Rory Watson The cost of household electricity bills is expected to rise by up to 15 per cent if Britain is to meet compulsory climate change targets announced yesterday.
                    Under the European Commission’s proposed measures for renewable energy supplies and lower carbon dioxide emissions, Britain will be required to increase its proportion of renewable energy from 1.3 per cent in 2005 to 15 per cent in 2020 – the equivalent of 20,000 wind turbines being erected in the countryside and offshore if Britain is to meet the target.
                    The investment required to get Britain’s energy supplies anywhere near the target mean that electricity prices are likely to rise 10-15 per cent by 2020 even before other inflationary factors are taken into account.
                    Britain’s 15 per cent target is below the average 20 per cent for the European Union’s 27 member states but it is the toughest in Europe because it requires the greatest level of change. Britain now has the third-lowest levels of renewable supplies and only Malta and Luxembourg are worse.
                    Related Links








                    Wind, solar, tidal and other renewable energy companies were offered a huge fillip by the proposals, with Maria McCaffery, the chief executive of the British Wind Energy Association, describing wind energy as the next North Sea oil.
                    She said: “Britain could be a world leader in renewable energy if we have the will to make this vision a reality.”
                    Part of the renewables requirement will be met by the EU’s expectation that at least 10 per cent of road fuel will consist of biofuels rather than conventional petrol or diesel. But so onerous is the 15 per cent target that ministers expect up to 40 per cent of the nation’s electricity will need to come from renewable sources by 2020.
                    Only 5 per cent of today’s electricity is generated from renewable sources.
                    A legal obligation to reduce carbon dioxide emissions across Europe by 20 per cent by 2020, compared with 1990 levels, was put forward by the European Commission as part of the EU’s measures to tackle climate change. To help to achieve the 20 per cent target, which will rise to 30 per cent should a global treaty be achieved, the European emissions trading scheme (ETS) will be tightened up, particularly in widening it to include other greenhouse gases.
                    Each nation was set compulsory carbon emission reductions for sectors, such as road transport and domestic heating, which remain outside the ETS. Britain was set a target of a 16 per cent reduction, one of the highest in Europe.
                    Ireland, Denmark and Luxembourg will reduce emissions by 20 per cent but there was recognition that some member states should be allowed to catch up economically and technologically – Bulgaria and Romania are allowed to increase emissions by 20 per cent.
                    All the targets set by the proposals, which could be ratified and come into operation within a year, are designed to be legal obligations and any failure to meet them could land a member state with huge fines from the European Court of Justice.
                    José Manuel Barosso, the President of the Commission, expects the measures to create up to a million jobs and make Europe the world leader in low-carbon energy. He said: “This package represents an opportunity for Europe to show itself at its best.”
                    He said that it would cost less than 0.5 per cent of Europe’s GDP to implement measures to meet the 2020 targets, the equivalent of £2.24 per week for each EU citizen.
                    Hilary Benn, the Environment Secretary, welcomed the proposals as a signal to the rest of the world that Britain and Europe were confronting climate change head-on. “This plan shows exactly what we are aiming for globally – a comprehensive and effective agreement to tackle climate change, with the carbon market at its heart,” he said.
                    Others had serious doubts about the strength of the measures, including Professor Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change (IPCC), which shared a Nobel prize last year with Al Gore for its work on warning world leaders of the extent and likely impacts of global warming. Professor Pachauri said at the World Economic Forum in Davos: “One would say that maybe what has come out is not up to expectations.”
                    Richard Lambert, Director-General of the CBI, said that Britain’s renewables target was daunting and potentially costly. It would take many years for renewables to reach fruition, leaving Britain little time to make huge strides. He gave warning of the risk that the measures would simply lead companies to move their carbon emissions to plants outside the EU.
                    “We have to actually cut carbon emissions, not shift them round the planet by undermining energy-intensive industries based in Europe and discouraging future investment into the Continent,” Mr Lambert said.
                    Peter Ainsworth, the Shadow Environment Secretary, said that the Government had allowed carbon emissions to rise over ten wasted years of talk and dithering. He added: “We have an enormous mountain to climb to reach our renewables target.”
                    Any opinions I give are my own. Any advice I give is without liability. If you are unsure, please seek qualified legal advice.

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                    • #11
                      Re: Now for the energy crunch

                      yes but from the programme about food prices last night it appears that the planting of crops for biofuels is one cause of food shortages - so we cant win really .

                      Also it appears that vital urgent research is needed into the decline of the honey bee or its all academic anyway! Thats why I believe that we should stronglly subsidise special degrees into research into this area.
                      "What makes the desert beautiful is that somewhere it hides a well." - Antione de Saint Exupery

                      "Always reach for the moon, if you miss you'll end up among the stars"


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