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Green Levies Hitting Home As Npower Hike Prices

February 3, 2017

By Paul Homewood

 

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From the Telegraph:

 

Npower will hike the standard cost of gas and electricity by almost 10pc from next month, adding £109 to the dual fuel bill of 1.4 million energy customers.

The big six supplier blamed rising cost pressures for the hike, which was branded "shocking" by the company’s former chief executive Paul Massara.

Npower blamed climbing wholesale energy prices and the rise in the cost of delivering Government policies, such as the roll-out of smart meters and renewable energy support, for the move.

Npower’s domestic market boss Simon Stacey said: “This is a hugely difficult decision, and we’ve delayed the date this takes effect until after the coldest months of the year.”

http://www.telegraph.co.uk/business/2017/02/03/npower-hike-gas-electricity-prices-almost-10pc/

 

The proposed rise is 15% for electricity and 4.8% for gas, and some of this can be linked to the increase in wholesale prices in the last 12 months, which has tended to track the rise in the price of oil.

 

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http://www.catalyst-commercial.co.uk/reports/97/business-energy-market-brief—jan17/

 

However, we are now beginning to see the inevitable effect of the government’s green policies taking hold:

 

 

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https://notalotofpeopleknowthat.wordpress.com/2016/11/26/environmental-levies-to-cost-uk-65-billion-in-next-six-years/

 

During this coming financial year the cost of environmental levies, all of which get passed on via consumer bills, is set to more than double to £9.7bn from 2015/16.

Add to that another £3bn a year for smart meter rollout and we get close t0 £13bn.

The last time I checked, the retail electricity market was worth about £36bn a year, (at about 300Twh @ 12p/kwh, this sounds about right). That means that green policies are accounting for more than a third of electricity bills.

The government has been fortunate over the last couple of years because falling wholesale prices have kept the lid on the impact of rapidly rising environmental levies.

It is disingenuous of OFGEM now to try to push the blame onto energy companies.

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25 Comments
  1. February 3, 2017 4:01 pm

    Just swapped to E-On,-saves £60+, doddle. Crude prices currently FALLING.

    • Mark Hodgson permalink
      February 3, 2017 7:16 pm

      Just swapped FROM Eon to a fixed tariff with Npower and should save £200 p.a (because Eon’s best fixed tariff on the expiry of our old fixed tariff would have cost us £400 p.a. more). We’re still £200 p.a. worse off than we were, though.

  2. manicbeancounter permalink
    February 3, 2017 4:13 pm

    The impact of the renewables obligation, smart meters and the extra costs of the grid are not shown in wholesale prices. These are included in the fixed costs.
    There may be some impact on wholesale prices over the years as conventional power stations run at ever lower capacities and have increased regulatory burdens.
    I looked into the split of fixed and variable costs three years ago, after Ed Miliband had the audacity to blame rising energy bills on profiteering by the energy suppliers, when the figures clearly showed it was the rising fixed costs.
    https://manicbeancounter.com/2013/12/18/labours-hypocrisy-on-rising-energy-bills/

    • February 3, 2017 6:50 pm

      Yes, and of course the extra costs of grid investment are another item to add to my list

  3. NeilC permalink
    February 3, 2017 4:40 pm

    All because our government believe 1 molecule (of anthropogenic CO2 emissions) in 67,566 (rest of atmospheric gases) is going to catastrphically change the climate.

    If it wasn’t so painfully costly (to ordinary people) it would be hillarious to think people believe such nonsense.

    • February 3, 2017 6:38 pm

      +1

    • Hivemind permalink
      February 4, 2017 9:48 am

      “whom the gods wish to destroy they first make mad.” Anonymous ancient proverb.

  4. February 3, 2017 4:49 pm

    Blaming the companies is a key part of the “conspiracy” that keep the Green Gravy Train on the tracks, lefties love it, the govt has painted itself into a green corner and relies on blame diversion to avoid revolution, the companies don’t mind too much because they will all raise prices, and customer switching will be largely neutral, profits and dividends will once more surge forward.

    Meanwhile, atmospheric CO2 will continue its linear rise, totally uninfluenced by the misery of UK consumers.

  5. February 3, 2017 4:54 pm

    Interestingly, IRV had a programme on yesterday evening about the roll-out of smart meters. The SSE chap came over as somebody representing a company which is highly economical with the truth (which we all know), where they claim smart meters will not cost the consumers anything. The main conclusion of the programme was that the smart meter programme is going to cost even more than expected. Also the Government smart meter project was described as bit like Government IT projects – ie another expensive disaster unfolding before our eyes.

    • February 3, 2017 4:55 pm

      That should be ITV – finger trouble.

    • February 3, 2017 5:37 pm

      The programme on smart meters failed to examine the key issues of usability (many rural areas do not have adequate transmission masts); transferability (will meters be transferable to other providers); security (there are major questions as to the security of the software used).

      DECC/BEIS seem to have learnt nothing from the experience in other countries.

      Many think this will be the most expensive IT fiasco yet. It is absolutely certain that the costs will massively outstrip any savings to the consumer.

      For an interesting, in-depth analysis of the problems see this and previous articles by Nick Hunn:

      http://www.nickhunn.com/whats-the-difference-between-sir-philip-green-and-the-gb-smart-metering-program/

      • Hivemind permalink
        February 4, 2017 9:50 am

        The real problem with smart meters is their usage. They will allow the electricity companies to shut off your power when they want to. Think cold, windless nights.

    • catweazle666 permalink
      February 3, 2017 6:49 pm

      Npower spokesmuppet on R4 this morning blamed part of the increase on their roll-out of smart meters.
      I thought they were supposed to lower bills… (well, actually, I thought nothing of the sort!)

    • Dave Ward permalink
      February 3, 2017 7:13 pm

      @ Philip – As I recall the “SSE chap” DID admit the truth, right at the end of his interview. When pressed if he would install smart meters without government pressure he simply said “NO”. If only the rest of his spiel was as honest…

    • Joe Public permalink
      February 3, 2017 8:06 pm

      It says something when yesterday ITV had the 1/2-hr peak-time prog slating smart meters.

      Then today, BBC1 lunchtime news reporting NPower’s price hike, actually commented that the reasons for the rise are the costs of providing smart meters and the costs of renewables obligations.

  6. catweazle666 permalink
    February 3, 2017 6:45 pm

    I signed up with these a few months ago, promised to save me ~£180 annually.

    https://flipper.community/

    Worked better than expected – so far.

  7. 8364khz permalink
    February 3, 2017 7:10 pm

    I cannot for the life of me think why anyone would wish to tax energy to the point where the pips squeek in a forlorn action to stop temperatures rising. With the extra heat, and snow becoming a thing of the past, we will need less energy anyway and as has been said we will all be managing very nicely of all that free solar and wind power.

  8. Joe Public permalink
    February 3, 2017 8:11 pm

    With prescient timing, Greenpeace’s Energydesk reports

    “Cold homes: How energy companies can stop winter deaths”

    http://energydesk.greenpeace.org/2017/02/03/fuel-poverty-big-six-energy-uk-winter-deaths/

    Your challenge today, dear readers, is to list the ways of reducing winter deaths via reducing ‘fuel poverty’ that Greenpeace ‘forgot’ to mention.

  9. February 4, 2017 12:36 am

    Smart meters will be hacked.Anarchy in a week.Thanks Mrs.May,Yes the buck stops with you.

  10. Wa231 permalink
    February 4, 2017 9:46 am

    Greg Clark was just on the radio claiming the cost of installing smart meters was around £60 per household and not £350 claimed elsewhere. Had he held a real job at any time he would know you couldn’t get an engineer to go to s property and change a lightbulb for £60.

    If wholesale is £45 MWH and Hinckley as well as offshore wind is getting a strike price of well over £100 MWH what does he think will happen to bills?

    He needs letting into another secret – like Fairy Liquid, smart meters won’t actually save you any money unless you use less of it!

    • Joe Public permalink
      February 4, 2017 12:19 pm

      ‘Installing’? Or disingenuously believing the gullible will forget the cost is for ‘Supplying AND Installing’? Plus maintaining; plus providing infrastructure to make use of the data.

  11. alan vickers permalink
    February 4, 2017 8:29 pm

    will be leaving npower next week after 10 years as a loyal customer and will be going with utility warehouse.

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