Energy Cost Inflation

Posted in: Comment, News and Updates

Finally, the company that supplies my electricity has told me how much per unit I will have to pay from October for the next two years.  This is much less than the scary (pre-subsidy government announcement) forecasts from OfGem, the hapless regulator, so it's only going to cost me about 20% more for peak-rate electricity (from Saturday) than it did over the Summer (and ~10% more for off-peak power).  It will actually cost me much less than this over the winter period because of one-off discounts.   The OfGem numbers were risible given that they quoted median costs for a 'typical' household.  Being all-electric we are way above the median and I'm not sure we're typical either; whatever typical is.

All that said, it's sobering to note that these new prices are ~67% higher than they were a year ago and 109% higher than they were 5 years ago.  Electricity price inflation (thanks to green subsidies being loaded onto electricity costs rather than gas costs, or onto taxation) are not a new thing.  I note that gas costs are now rising faster than electricity costs because of the need to nudge consumers away from gas because of net-zero policies.  Maybe it will soon be a good thing too be an all-electric house.  Maybe ...

So; many thanks to the tax-payer for the subsidies.  It is not yet clear who is going to pay for all this.  My children's children is a fair bet through their taxes to pay the interest charges on borrowings.  And how big will these be?  No one knows, but it's to be hoped that they might be less than the (even scarier) figures recently quoted by consultants.  They will see.

There is much grumbling that even the super-mega rich, even those with castles or third or fourth homes are getting subsidies.  That's because giving it to everyone is much simpler and quicker than differentiating through complex means tests.  Some governments would claw some of those subsidies back through income tax (or a revalued council tax scheme), but not this one it seems.

Posted in: Comment, News and Updates


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