GOOD ENERGY GROUP PLC byGood Energy
Posted on13 September 2023
- Energy
- News
Some welcome news from the wholesale energy markets - prices are continuing to reduce. Whilst still relatively high, we are continuing to see a decline from the highs seen during the energy crisis.
There are some key factors behind this change. The first is increased gas storage levels across Europe. As we have explained on this blog before, not only do we predominantly still use gas for heating in the UK, the fossil fuel drives our electricity prices too due to our over-reliance on it for electricity generation and the way the market works. An EU requirement for gas storage stocks to be 90% full was achieved in August this year, which is eleven weeks earlier than the requested November 2023 deadline, helping soften energy prices.
Healthy renewable generation throughout the summer has also benefited the UK. Whilst much of Europe has suffered from record heat waves in recent months, the UK saw milder temperatures, which resulted in less demand for using electricity to run things like air conditioning.
With less pressure on the energy grid, we don't have to rely on gas as much for generating electricity and can instead make the most of our renewable energy sources.
But looking ahead, there are some warning signs as we head into the winter.
Prices may not continue on a downward trend, with some factors already creating volatility. Talks of strikes at two key Liquefied Natural Gas (LNG) companies in Australia shook the market in August.
Talks are still on-going but with the possibility that the warm weather in East Asia may draw LNG supplies away from Europe, this could be a key factor in influencing the price we all pay for our energy.
We continue to see the urgent need for us to reduce our dependence on the volatile global fossil fuel market and rapidly expand our homegrown renewable energy infrastructure.
Changes to the Typical Domestic Consumption Value (TDCV)Another factor that is not changing energy prices as we go into autumn and winter, but is changing how they are quantified and reported, is what's called the 'Typical Domestic Consumption Value' or TDCV.
Whenever you see coverage of energy prices, you will tend to see one monetary value used by the media or by other organisations, including your supplier, which is based on an average annual household usage of energy.
The TDCV is set by the energy regulator Ofgem, and is also used by suppliers and price comparison websites in the absence of individual customer data.
The current values are 2,900kWh for electricity and 12,000 kWh for gas.
So, what's changing?Ofgem have reviewed these values and have made the decision to reduce the TDCV.
From the 1st October 2023, the revised TDCV values will be as follows:
Electricity - 2,700 kWh
Gas - 11,500 kWh
This means that you may see lower figures for annual bills reported based on the reduced estimated TDCV. Rather than, or in addition to, reductions in the actual unit rates.
Remember, changes to the TDCV values only impact how suppliers and the media talk about the average price of energy bills. Your individual bill is always based on your actual usage, which may be higher or lower than the TDCV figures.
Energy Price Guarantee updateThe last significant change from October is to the Government's Energy Price Guarantee (EPG) scheme.
This was the discount all domestic energy customers received to their unit rates during the last winter period. But since 1st July 2023, only customers with a pre-payment meter (PPM) have been eligible for a discount on their bills via the government's support scheme. This discount has been delivered through a unit rate discount to align the costs for comparable PPM and Direct Debit customers.
What's changing?For the period October - December 2023, only customers with a prepayment meter will continue to be eligible for a discount. This will be applied to standing charges rather than unit rates.
Good Energy customers with a prepayment meter will see this discount applied from October - there is no need to contact us about this change.
Beyond March 2024With the EPG scheme due to finish at the end of March 2024, the government and Ofgem are considering what long-term option can be implemented from April 2024 to deliver a similar level of support. These decisions are still to be confirmed. We will inform our customers as soon as we receive the full details.
Good Energy
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Good Energy Group plc published this content on 13 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 September 2023 15:00:06 UTC.
