Energy across the pond

[LawBeefaroni]

New PM getting down to business.

• Prime Minister Liz Truss has announced plans to cap average household energy bills at £2,500 a year from October
• The support will last for two years, she announces in the Commons, saying "this is the moment to be bold"
• A typical household's gas and electricity bill had been due to rise from £1,971 to £3,549 in October
• Businesses are also getting a support package for six months which will provide "equivalent support"
• After the six-month period, further support will be targeted at "vulnerable industries", Truss says
• The government is also lifting the ban on fracking - which involves extracting gas and oil from shale rock

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

[LordMortis]

I think Average keys in there. It's still a bold move against the idea that there is not an unlimited supply and that things need to get paid for somehow.

[malchior]

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

They have historical trends from people. I imagine they could premise it on not deviating from a weather adjusted variation from their normal usage.

[*]The government is also lifting the ban on fracking - which involves extracting gas and oil from shale rock[/list]

Politically this 'plank' makes some sense. It's not an actual solution to anything since fracking takes years to turn exploration into a viable well but in principal it's a trade to BP and Shell. They are pretty much demanding a hefty discount on this buy and in return they'll give them opportunities at future profits (sorry grandkids who'll bake alive!). And I suspect there won't be many takers on the expanded rights anyway.

[stimpy]

Am I missing something with the thread title?
Or did you hiccup?

[LawBeefaroni]

Am I missing something with the thread title?
Or did you hiccup?

Fat fingered it.

[LawBeefaroni]

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

They have historical trends from people. I imagine they could premise it on not deviating from a weather adjusted variation from their normal usage.

This seems like a lot of work, even for the famed British bureaucracy. But if they are able to work such magic, there will be some serious surprises a year or two out.

[malchior]

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

They have historical trends from people. I imagine they could premise it on not deviating from a weather adjusted variation from their normal usage.

This seems like a lot of work, even for the famed British bureaucracy. But if they are able to work such magic, there will be some serious surprises a year or two out.

It's not that much lift. Every utility I've ever dealt with (in multiple countries) computes this on a rolling basis for every customer for demand management and billing/bill generation purposes. The government could just push the requirement on them and it wouldn't be that burdensome.

[LawBeefaroni]

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

They have historical trends from people. I imagine they could premise it on not deviating from a weather adjusted variation from their normal usage.

This seems like a lot of work, even for the famed British bureaucracy. But if they are able to work such magic, there will be some serious surprises a year or two out.

It's not that much lift. Every utility I've ever dealt with (in multiple countries) computes this on a rolling basis for every customer for demand management and billing/bill generation purposes. The government could just push the requirement on them and it wouldn't be that burdensome.

Hopefully that's made abundantly clear to Britons otherwise everyone looking to mine "free" crypto once they hit £2.5K will be in for a surprise.

[LawBeefaroni]

Elsewhere:

The European Commission has asked countries to consider five immediate moves including a plan to redistribute some energy producers’ windfall revenue to businesses and households (in stark contrast to Britain), a price cap on Russian pipeline gas, and mandatory targets for reducing electricity use during peak hours, among other possible steps.

Price visualizer.

[Lagom Lite]

New PM getting down to business.

• Prime Minister Liz Truss has announced plans to cap average household energy bills at £2,500 a year from October
• The support will last for two years, she announces in the Commons, saying "this is the moment to be bold"
• A typical household's gas and electricity bill had been due to rise from £1,971 to £3,549 in October
• Businesses are also getting a support package for six months which will provide "equivalent support"
• After the six-month period, further support will be targeted at "vulnerable industries", Truss says
• The government is also lifting the ban on fracking - which involves extracting gas and oil from shale rock

Now color me skeptical, but won't this just increase usage? Once anyone hits £2,500 they'll stop worrying about limiting usage. Same for businesses. Which will drive up prices even more.

You're quite correct. Energy prices reflect the inability of the european energy market to handle what is rapidly becoming a war economy. Paying higher energy prices won't increase the availability of energy, however (at least not in the short term) - which means the only way forward is to ration energy (which Germany is already doing by closing swimming halls and other non-essential services), while de-commodifying energy as much as possible for those folks living on the margins to avoid a greater economic collapse. A better model for this would be to flip the proposed cap on energy bills around - make it so energy is free for households up until a certain point, and after that point becomes prohibitively expensive.

[malchior]

A better model for this would be to flip the proposed cap on energy bills around - make it so energy is free for households up until a certain point, and after that point becomes prohibitively expensive.

I agree but FWIW I think the actual implementation of the model is going to be a hybrid. Pay current prices up to the cap with some wiggle room on the usage. Once they cross some threshold then it becomes prohibitively expensive. Considering how it was announced it appeared to be aspirational anyway because they were talking about "average households" and such. The devil will be in the details there.

[Montag]

EU average is less than Hawaii. Not terribly higher than our other more expensive states.

2020 rates

https://www.eia.gov/electricity/state/