The Lemon Fool

A number of folk have suggested possibilty of charging the SC to 'general taxation

I fear this would not work as it woud be lost...like vehicle tax...and NI...into government waste and 'expenses'

or thrown into the bottomless pit...the NHS

and dont anyone complain about that because they will obviously be fascists...and probably both racists and misogynists

last couple years it was only rascist....but misogyny seeems now to prevail on every issue

Mike4 wrote:
There is an even simpler, fairer and more granular way of tapering the standing charge to match the circumstances of the individual consumer. Make them proportional to the amount of fuel used.

Um....

How would that be fair to high usage users, where the margin they make for the company would be far in excess of the expenses required to maintain the connection.

Back to the OP's original question: "when will standing charges come down?"

Only when the retail companies a) have headroom in their margins and b) when they see it a a competitive advantage (presuming that attracting more customers is the desired outcome) or c) when the government intervenes.

Whilst Europe transitions away from Russian gas and the futures market in gas remains expensive (as opposed to a volatile spot market price) I can't see any supplier offering a fixed price contract cheaper than the market cap. Too risky.

Ignoring any fundamental overhaul of the pricing structure (as the EU are suggesting they might try to do) the UK consumer basically has to wait until there is a surplus of gas supply to our market, such that the marginal costs come down to the point where suppliers think it worth rejigging the balance between standing charge and unit cost.

The alternative, which might get interesting, is if it becomes a political football in the run up to the 2024 elections. Then we might see whether the "recovery of costs" argument can be made into a "greedy shareholders are profiteering" fight, with pressure on the government to nip that in the bud if inflation and worker strikes are still a major factor in their election hopes.

Short answer, no idea, but probably only very loosely tied to when wholesale gas prices come down.

VRD

Mike4 wrote:

UncleEbenezer wrote:
The standing charge is, in effect, a form of general taxation. It's (give or take) a locally flat rate per household, regardless of the size of the premises or household.

But it's not entirely disconnected from usage. It serves as an incentive to abandon gas and go all-electric. As I intended when I first moved here in 2019. With gas standing charge north of £100/year that incentive just grows.

With the price pr kWh of leccy fixed at 3.5 x gas, a standing charge of £100 a year is surely hardly an incentive to swap to leccy.

Oh hang on, you like to live in a fridge, I forgot!

The efficiency (SPOC) of a heat pump is at least 4, so with electricity costing 3.5 x gas, then it is cheaper to heat a house with electricity, and hence save the gas standing charge. That is before you start factoring in solar or low cost off-peak tariffs.

funduffer wrote:

Mike4 wrote:

UncleEbenezer wrote:
The standing charge is, in effect, a form of general taxation. It's (give or take) a locally flat rate per household, regardless of the size of the premises or household.

But it's not entirely disconnected from usage. It serves as an incentive to abandon gas and go all-electric. As I intended when I first moved here in 2019. With gas standing charge north of £100/year that incentive just grows.

With the price pr kWh of leccy fixed at 3.5 x gas, a standing charge of £100 a year is surely hardly an incentive to swap to leccy.

Oh hang on, you like to live in a fridge, I forgot!

The efficiency (SPOC) of a heat pump is at least 4, so with electricity costing 3.5 x gas, then it is cheaper to heat a house with electricity, and hence save the gas standing charge. That is before you start factoring in solar or low cost off-peak tariffs.

This is news to me. We were taught that the SPOC of a heat pump varies according to the mainly the outside temperature, but other things as well. A typical value being 3.0. Recently I see this (widely varying) value being stated as an absolute, fixed value by marketing departments and yes, sometimes claims as high as 4.0 which is easily achievable on a warm day. In weather like today the value is probably going to be below 2.0. I strongly suspect the VW effect is at work with your assertion of a floor value of 4.0 nowadays, but I'm willing to be convinced otherwise, in fact I'd be delighted to find otherwise! Where are you getting this from, please?

One proviso, my heat pump training course was 30 years ago, so they may have got more efficient but somehow I suspect not, given that they now have to have less ecologically damaging, less efficient refrigerant nowadays than was available back then.

funduffer wrote:

Mike4 wrote:

UncleEbenezer wrote:
The standing charge is, in effect, a form of general taxation. It's (give or take) a locally flat rate per household, regardless of the size of the premises or household.

But it's not entirely disconnected from usage. It serves as an incentive to abandon gas and go all-electric. As I intended when I first moved here in 2019. With gas standing charge north of £100/year that incentive just grows.

With the price pr kWh of leccy fixed at 3.5 x gas, a standing charge of £100 a year is surely hardly an incentive to swap to leccy.

Oh hang on, you like to live in a fridge, I forgot!

The efficiency (SPOC) of a heat pump is at least 4, so with electricity costing 3.5 x gas, then it is cheaper to heat a house with electricity, and hence save the gas standing charge. That is before you start factoring in solar or low cost off-peak tariffs.

I thought the 4 was a rule-of-thumb comparing an ideal heat pump with an ideal boiler? But yes, it's part of the calculation.

And mine would've been a river-sourced heat pump. Using water, which has four times the specific heat of air, making it all the more efficient.

UncleEbenezer wrote:

funduffer wrote:

Mike4 wrote:

UncleEbenezer wrote:
The standing charge is, in effect, a form of general taxation. It's (give or take) a locally flat rate per household, regardless of the size of the premises or household.

But it's not entirely disconnected from usage. It serves as an incentive to abandon gas and go all-electric. As I intended when I first moved here in 2019. With gas standing charge north of £100/year that incentive just grows.

With the price pr kWh of leccy fixed at 3.5 x gas, a standing charge of £100 a year is surely hardly an incentive to swap to leccy.

Oh hang on, you like to live in a fridge, I forgot!

The efficiency (SPOC) of a heat pump is at least 4, so with electricity costing 3.5 x gas, then it is cheaper to heat a house with electricity, and hence save the gas standing charge. That is before you start factoring in solar or low cost off-peak tariffs.

I thought the 4 was a rule-of-thumb comparing an ideal heat pump with an ideal boiler? But yes, it's part of the calculation.

And mine would've been a river-sourced heat pump. Using water, which has four times the specific heat of air, making it all the more efficient.

Well its a bit like a novice investor expecting a straight answer to "What return on US investments can I expect?" It depends on a whole heap of factors, some of which vary widely. 4 is easily achievable on a warm Spring morning when you won't have the heating on.

paulnumbers wrote:

Mike4 wrote:
There is an even simpler, fairer and more granular way of tapering the standing charge to match the circumstances of the individual consumer. Make them proportional to the amount of fuel used.

Um....

How would that be fair to high usage users, where the margin they make for the company would be far in excess of the expenses required to maintain the connection.

There is one way of doing this which is reflective of costs but which is not directly proportional to usage. Rather than applying a flat standing charge across all domestic customers, a capacity charge is instead applied. Think of capacity in terms of the size of the "pipe" through which you get your supply. By charging on the basis of capacity, the costs of capacity (the network infrastructure) means that low energy users (with a correspondingly low draw) on the network do not end up subsidising high energy users.

Customers who use relatively little electrical energy (measured in kWh) can have a tariff with a low contracted capacity (measured in kW). If you want to be able to run your heat pump, 12 kW electric shower and high capacity EV charger at the same time then you'll need a tariff with a high contracted capacity.

It is the system used in here in Spain, where I am currently paying 0.12€/kW/day as my capacity charge for a contracted capacity of 5.75 kW. Smart metering monitors my peak usage, and allows the supplier (Endesa) to penalise me in the event I exceed my contracted capacity. Previously a suitable supplier's fuse did that job.

modellingman

modellingman wrote:

paulnumbers wrote:

Mike4 wrote:
There is an even simpler, fairer and more granular way of tapering the standing charge to match the circumstances of the individual consumer. Make them proportional to the amount of fuel used.

Um....

How would that be fair to high usage users, where the margin they make for the company would be far in excess of the expenses required to maintain the connection.

There is one way of doing this which is reflective of costs but which is not directly proportional to usage. Rather than applying a flat standing charge across all domestic customers, a capacity charge is instead applied. Think of capacity in terms of the size of the "pipe" through which you get your supply. By charging on the basis of capacity, the costs of capacity (the network infrastructure) means that low energy users (with a correspondingly low draw) on the network do not end up subsidising high energy users.

Customers who use relatively little electrical energy (measured in kWh) can have a tariff with a low contracted capacity (measured in kW). If you want to be able to run your heat pump, 12 kW electric shower and high capacity EV charger at the same time then you'll need a tariff with a high contracted capacity.

It is the system used in here in Spain, where I am currently paying 0.12€/kW/day as my capacity charge for a contracted capacity of 5.75 kW. Smart metering monitors my peak usage, and allows the supplier (Endesa) to penalise me in the event I exceed my contracted capacity. Previously a suitable supplier's fuse did that job.

modellingman

I like the principle; I much prefer the notional maximum measuring (and pricing accordingly) rather than limiting the hardware
I think anything with the purpose of limiting peak demand will have a useful effect on the robustness of a network as well as avoiding the most extreme parts of the pricing curve

modellingman wrote:There is one way of doing this which is reflective of costs but which is not directly proportional to usage. Rather than applying a flat standing charge across all domestic customers, a capacity charge is instead applied. Think of capacity in terms of the size of the "pipe" through which you get your supply. By charging on the basis of capacity, the costs of capacity (the network infrastructure) means that low energy users (with a correspondingly low draw) on the network do not end up subsidising high energy users.

Customers who use relatively little electrical energy (measured in kWh) can have a tariff with a low contracted capacity (measured in kW). If you want to be able to run your heat pump, 12 kW electric shower and high capacity EV charger at the same time then you'll need a tariff with a high contracted capacity.

It is the system used in here in Spain, where I am currently paying 0.12€/kW/day as my capacity charge for a contracted capacity of 5.75 kW. Smart metering monitors my peak usage, and allows the supplier (Endesa) to penalise me in the event I exceed my contracted capacity. Previously a suitable supplier's fuse did that job.

I wonder how many people are using storage batteries to ‘game the system’.

A 5.75 kW supply running at full capacity 24/7 is 138kWh a day. Stick all that in a battery and that’s plenty enough to run the heat pump, electric shower, and EV charger (although probably not at the same time).

But simpler is to charge the EV overnight when little else is using the supply - easy enough to limit that to 3.7kW and charge for twice as long (or twice as frequently).

Then a relatively small battery would be needed to provide the ‘boost’ when there are short periods of high demand, and meanwhile you can fill it with cheap electricity.

AF62 wrote:

modellingman wrote:There is one way of doing this which is reflective of costs but which is not directly proportional to usage. Rather than applying a flat standing charge across all domestic customers, a capacity charge is instead applied. Think of capacity in terms of the size of the "pipe" through which you get your supply. By charging on the basis of capacity, the costs of capacity (the network infrastructure) means that low energy users (with a correspondingly low draw) on the network do not end up subsidising high energy users.

Customers who use relatively little electrical energy (measured in kWh) can have a tariff with a low contracted capacity (measured in kW). If you want to be able to run your heat pump, 12 kW electric shower and high capacity EV charger at the same time then you'll need a tariff with a high contracted capacity.

It is the system used in here in Spain, where I am currently paying 0.12€/kW/day as my capacity charge for a contracted capacity of 5.75 kW. Smart metering monitors my peak usage, and allows the supplier (Endesa) to penalise me in the event I exceed my contracted capacity. Previously a suitable supplier's fuse did that job.

I wonder how many people are using storage batteries to ‘game the system’.

A 5.75 kW supply running at full capacity 24/7 is 138kWh a day. Stick all that in a battery and that’s plenty enough to run the heat pump, electric shower, and EV charger (although probably not at the same time).

But simpler is to charge the EV overnight when little else is using the supply - easy enough to limit that to 3.7kW and charge for twice as long (or twice as frequently).

Then a relatively small battery would be needed to provide the ‘boost’ when there are short periods of high demand, and meanwhile you can fill it with cheap electricity.

Is that "gaming the system" or the system?

Distributed storage at the resisdential level makes a whole load of sense for a lot of reasons
- once it becomes popular enough they'll find a way to penalise it to compensate for the reduction in supplier profit (despite the fact those with the batteries are doing them a favour)

-sd

Mike4 wrote:

funduffer wrote:

Mike4 wrote:

UncleEbenezer wrote:
The standing charge is, in effect, a form of general taxation. It's (give or take) a locally flat rate per household, regardless of the size of the premises or household.

But it's not entirely disconnected from usage. It serves as an incentive to abandon gas and go all-electric. As I intended when I first moved here in 2019. With gas standing charge north of £100/year that incentive just grows.

With the price pr kWh of leccy fixed at 3.5 x gas, a standing charge of £100 a year is surely hardly an incentive to swap to leccy.

Oh hang on, you like to live in a fridge, I forgot!

The efficiency (SPOC) of a heat pump is at least 4, so with electricity costing 3.5 x gas, then it is cheaper to heat a house with electricity, and hence save the gas standing charge. That is before you start factoring in solar or low cost off-peak tariffs.

This is news to me. We were taught that the SPOC of a heat pump varies according to the mainly the outside temperature, but other things as well. A typical value being 3.0. Recently I see this (widely varying) value being stated as an absolute, fixed value by marketing departments and yes, sometimes claims as high as 4.0 which is easily achievable on a warm day. In weather like today the value is probably going to be below 2.0. I strongly suspect the VW effect is at work with your assertion of a floor value of 4.0 nowadays, but I'm willing to be convinced otherwise, in fact I'd be delighted to find otherwise! Where are you getting this from, please?

One proviso, my heat pump training course was 30 years ago, so they may have got more efficient but somehow I suspect not, given that they now have to have less ecologically damaging, less efficient refrigerant nowadays than was available back then.

I am no expert, but here are a selection of the latest heat pumps, most showing efficiencies of 400% plus. Obviously they get worse as the outside temperature drops, but they are designed for much harsher climates than we experience in the UK, so I would guess they are pretty good, and competitive with gas boilers on cost at unit rate 3.5 x gas rate.

https://www.theecoexperts.co.uk/heat-pu ... heat-pumps

FD