Hey everyone,
Sorry I’ve been quiet the last fortnight, I’ve moved home and had a holiday back-to-back, so it’s been a little manic!
Whilst I’ve been away I’ve seen a tonne of things in the news about the UK energy market, and thought it’d be worth while posting a quick update to summarise the various changes in what we’re seeing. So let’s go:
BBC: Cool hubs, yoghurt windows and anti-air-con views
The BBC has kept me entertained with updates on ways to stay cool during the heatwave. Some of these are interesting ideas, some are ridiculous non-sense and some are multi-faceted conversations that needs to be had.
The first piece of news is that the Liberal Democrats are urging Labour to support turning certain buildings with air-con into “cool hubs”. Similar to the warm hubs that were launched in 2022 to give people somewhere to go for warmth when the energy crisis was at its peak, these cool hubs would see libraries, gyms and community centres to have their air-con turned on and welcome in everyone so that people can cool down during these extreme heat waves. I actually like this idea, I hope something comes of it. And well done to places like Manchester and London that already run these types of cool hubs, whilst many of us can find ways to cool down or can tolerate the extreme heat, other people need some support during this hot weather!
The second piece I saw was funny, it’s the yoghurt windows article BBC posted a few days ago. Guys, please don’t do this, this is just ridiculous. Okay, the guy is right, putting a thin film of something light coloured over your windows will reflect some of the suns rays, I get the science and agree that putting yoghurt on your windows would likely cool your home, but come on, there are better options. A few right off the top of my head: close your curtains during the day; get some of that white netting stuff and hang it; or, and this should be the most obvious one, if you really want something light coloured to cover your window then get some of that stick-on frosted glass effect film! You can buy it from ikea for £5/m, it’ll last much longer than yoghurt, do a much better job of reflecting the suns rays and it’s not going to go moldy on your window!
Finally, anti-air-con views. I heard about this from the BBC in a video from GB News but I can’t find anything recent, I believe the last time BBC put out an anti-air-con piece was August last year, but it’s still interesting. This is a real conversation that doesn’t have a right answer. On the one hand, I agree that most wealthy countries in the world have air-con in homes for the warmer months, I think the UK is massively behind the times on this. We shouldn’t be putting glasses full of ice behind fans or keeping the curtains closed all day just to try to remain cool, and air-con units are significantly more energy efficient than they were 10 years ago, so it should be a more common thing in UK homes. But, on the other hand, even with the improved energy efficiency they still require electricity and if we had 30 million homes all using them during the summer then we’d see our energy bills jump even more than they already have! Additionally, air-con units themselves can be quite expensive and they’re bulky, needing to take up space in your home during the winter months when they’re out of use. It’s an interesting conversation to have, and I think it’s up to each individual to make up their own mind. For clarity, I’ve just moved into a fifth-story south-facing apartment, we get the sun all day long and we’re surrounded above and below by apartments, so this place gets HOT! Therefore, I’ve purchased a cheap conditioner, but being the energy-concious person I am, I continue to keep the curtains closed during the day, drink cold water to cool down internally and only use the air-con if I really am struggling with the heat (three times in total so far).
Government says no to zonal pricing plans
This was a disappointing piece of news. Ed Miliband has confirmed that the UK Government are abandoning places for zonal pricing. Zonal pricing is an idea that creates energy hubs across the UK, it allows places that are close to renewable energy regeneration to get cheaper energy by having direct connections to those renewable sources. At the moment, the national grid takes all energy production and has to send it to distribution networks across the country and then sends it on to households, it’s a wildly inefficient system.
To me, it looks like fearmongers have won. Primarily companies that profit from the energy market. They’ve been spreading the word that it’ll mean higher energy costs for people in the south, including London, than it would for people in the north, which is kind of painting a positive into a negative. The truth is that it would give EVERYONE cheaper energy, however people in the north would get bigger discounts on their energy than those in the south, simply because they live closer to the renewable energy sources, but the people in south would also have cheaper energy than they do now because all network costs would come down!
It’s a real disappointment that this conversation has been happening for three years and it is now just abandoned, it’s the UK government handing over extended large profits to energy companies. This is a real blow to all of us, I’d be interested in seeing what Ed Miliband is planning to do instead, because I’m certain they have a promise to bring our bills down.
Ofgem and the Price Cap
For those of you that haven’t been following the £4bn excess profit work I’ve been doing, we have a petition with almost 50,000 signatures now, hundreds of us contacted Ofgem about 3 months ago and hundreds contacted our local MPs 2-3 weeks ago because Ofgem had not replied to anyone. Miraculously, they responded about 10 days after we all contacted our local MPs. I’ve since responded to their response, it’s an open conversation at the moment, essentially they’re saying they’ve already decided not to give customers back the £4bn excess we paid because they think it might undermine investor confidence in the energy industry, which they think might make energy bills more expensive for consumers. It’s a response of if buts and maybes, which is annoying, I’ve sent a slightly frustrated response back to them. You can read all of the communication on this so far in the article i posted earlier this month.
The Ofgem price cap changed at the start of July, it reduced from £1,849 to £1,720. There are also updated predictions for the October and January price cap which looks like it won’t change much over the next two cap changes, perhaps a 1% up or down in each of the next two changes. It’s good that there aren’t huge changes but it also sucks that there aren’t any reductions on our huge energy bills, we’re still in a crisis.
The next price cap announcement will be on 27 August and there are still consultations that Ofgem are running, so we’ll have to see how that happens.
That’s all the updates from me today I think, I’m catching up with work this week so hopefully I’ll have some more content later this week, don’t forget to subscribe to my newsletter and share this article around, thanks guys!
Richard Winstone
The Regulator Guy.
