How much is green energy adding to your bills?

Brian R – you can find them here, but these are average prices, not by provider. Nevertheless they make interesting reading. We might moan about our prices but, as I have pointed out before, we are by no means paying the highest prices.
This was my comment on a previous conversation:

An interesting (?) comparison of European energy prices can be found at&filetimestamp=20130523135053
A quick look shows the UK in 2012 was 16th out of 27 for electricity price (91% of the average price) and 12th for gas (81% of the average price).
However, what is more striking is the increase between 2010 and 2012 – UK electricity increased by 23% (only Cyprus and Latvia having larger increases) and gas by 38% (Spain only higher at 68%).
Hope I’ve got the numbers right – I’m sure thousands will check this fascinating topic. However we have to ask why we suffer increases so out of proportion with the rest, whilst being somewhat glad we don’t buy electricity in Denmark or Cyprus (66% more than we pay) or our gas in Sweden (120% more).

Thanks Malcolm. This makes fascinating reading.

I had assumed that our dependence on importing energy would make the UK relatively expensive, but that’s obviously not the case. Considering the number of factors that affect the cost of generating and distributing electricity and gas, I am surprised that the price differences between countries is not greater.

I disagree, Vince. At present, the charges are greater for those who use more energy, which if fair. If they are moved into taxation, we are likely to land up with heavy users being subsidised by those who use less energy, which is anything but fair.

I totally agree about transparency.

Mmmm . . . Tricky one this. A lot of people are below the threshold for direct taxation; they might prefer relief from environmental charges on their energy bills. And many other people are having to use more energy because they are at home all day, or have to maintain higher levels of heat, or have alarge family with lots of baths and washing. I believe it is the inefficient [rather than greater] use of energy that should be targetted for a levy but, as I suggested above, that has its complications too. Thank goodness we have sensible politicians in place to make wise decisions for us!!!

Sensible politicians? That sounds like a new oxymoron. 🙂

wavechange, it has been said before – many who use more energy have no choice, for a variety of reasons. Why should you penalise them? I see no way to fund green energy intiatives that is fair to everyone – but general taxation would at least place the greater charge on those with more ability to pay, and it is an issue for the whole population, not just energy bill-payers. Nevertheless increasing taxes is not a task any government likes.

Malcolm

I am thinking of those people who have the smallest incomes and are literally having to choose between heating and eating. High consumers might have to save money by heating only part of their house, but that is not such a desperate situation. A standing charge has a much greater effect on those who are low consumers.

I am all for green energy, but not at any price and we do need to explore renewable resources that are more dependable than wind and solar point, as you have said.

wavechange, this problem should be dealt with, but separately, not at the expense of other energy users. Examples are elsewhere – all electric homes, small homes incapable of being insulated, larger families etc. etc.
I have not suggested anywhere that everyone should pay a standing charge. On the contrary I have always suggested a choice – unit charge only, or unit plus standing charge. You have the choice of the most advantageous tariff for your particular circumstances.
It is simply not possible for one charging method to be fair and the other not. So we should not impose an artificial situation. We should address issues that will help all consumers.

Well, as I have said before, I am fully supportive of the Which? campaign for simple energy prices that can be compared as easily as the price of petrol.

I guess we have to agree to differ.

Rocky, the figues bandied about for profits are 3-5% retail, and 20% wholesale. It must be remembered that profits at the generation end are partly used to fund new plant.
It would not be right to ask every business to disclose all their operating costs and margins, for commercial and competition reasons. However, since the energy sector is partly subsidised and needs to meet UK and EU objectives, it should be regarded more as a joint venture, and required to justify its prices – even if confidential to the regulator.

Josh, you are on tricky ground in trying to get commercial organisations to disclose real profit levels. I am not sure whether it is even feasible without knowing their business obligations. Since 5 of the 6 are foreign, we could run into the same problem as Starbucks, Google etc – revenue can be transferred to reduce profits in one country. This, I would think, is an EU issue, not only UK.
However, as the energy generators are inextricably involved with government – renewable targets, CO2 emissions, subsidies, funding future plant and infrastructure – there needs to be a means of monitoring performance and profit even if it is confidential; between government, the companies and the regulator, to ensure there are no cartels operating and that it is free market.
Government is responsible for a significant part of the price rises – persuading supply companies to invest has required generation price guarantees. Presumably this was felt more appropriate than using government borrowing and adding to our deficit. Probably a lot better than PFIs though.
It is not straightforward.

Doug, it seems unlikely your energy usage or your tariff has increased by 80%? It may be you have been underpaying and this is recovering the underpayment. If that is the case you should be able to pay off the amount owed separately and reduce your direct debit. Alternatively, wait till your higher repayments have made up the shortfall and then ask for them to be reduced to match your consumption.

Hello Doug,

As Malcolm says, it sounds likely that your previous direct debit was set too low and E.ON so you have been building up debt on your account. At Which? Switch we have recently heard from many people in a similar situation to yourself. The long, cold winter means that most of us have been using more energy than we usually would. Most energy companies review your direct debit once every 12 months and so the amounts that were set up last year have most likely not covered your usage fully. I would recommend that you watch your bills closely over the next few months and call E.ON once your account is back in credit to ask for the direct debit amounts to be lowered again.

We have had a similar DD increase for the reasons that Malcolm and Charlie have given. We became new E.ON customers in December 2012 because we bought a new house that was already running on E.ON, with an E.ON smart meter, and we had no idea what future consumption would be as the property was significantly different to our previous home. As it happens, I think E.ON have been alright; I would not have chosen them, and with all the other things we have had to deal with after moving into a new house, changing suppliers has not been very high up the ‘to do’ list. I have been wondering whether energy companies have a tendency with new customers to give lower forecasts of energy bills in order to appear more competitive. Diffficult to prove … just a suspicion.

I was very satisfied with Cooperative Energy at our previous house, not just on pricing but their overall responsible approach, and we might switch back to them once the first twelve months are up. Substantiating Charlie’s point about last year’s bad summer and cold winter, I had to pay a large amount to Cooperative Energy when closing the previous account as the DD payments were seriously out of line with actual requirements.

As an aside, I am wondering what happens with company-specific smart meters when you change supplier and whether there are any refit costs; I expect we shall find out in a few months time!

Hello John,

In answer to your question about smart meters; unfortunately as it stands the meter will stay in place but will just become a ‘dumb’ meter. This is because the smart meters that have been installed by suppliers so far only work with the installing supplier’s system. We’ll have to wait until at least next year for a standardised system which works with all suppliers to be in place. Of course, before switching you can always speak to your intended supplier about whether they would be willing to install a new smart meter for you, and whether there will be any charge for the installation.

e.on never directly admitted to having a policy of keeping customers in credit and ensuring that they did not get into debt over the winter quarter. In contrast, when I switched to Scottish Power, they were quite open about getting customers to build up a credit before winter. I welcome honesty, even though I would far prefer to pay for what I use. 🙂

My experience with e.on (and their predecessors, Powergen) was that it it was easy to get them to revise direct debits or issue refunds on request. e.on regularly increased direct debits when I was obviously well in credit. I don’t think their computer could cope with the fact that I use less energy than many people.

Thank you very much for that response, Charlie. I think a ‘dumb’ meter is just right for me – I didn’t even know it was a smart meter until speaking to an E.ON customer services adviser about the rejection of my on-line meter readings!

Paul, if you look at what all European countries are paying for energy, where in 2012 UK was below average, there are a lot of other countries being ripped off too? Link above.