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My OVO electricity is 100% from renewable sources so why do global gas prices affect my electricity bill?

  • 7 October 2021
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Userlevel 7
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You’ll only get the email if your account is affected by the price changes and it’ll be personalised based on your account. If you’ve got Economy 7 your email will have the night rates as well as the day rates.

However, if you’re currently still on a fixed rate deal that’s not yet due to expire, you won’t get any email at all - or you might get one saying you’re not affected. It’s more efficient to only send out the emails to those the changes do apply to though.

Userlevel 3

Thank you.  I’m on the Simpler Energy Economy Plan - Not a fixed plan

Userlevel 7
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In that case, you should receive the email soon, most likely within the next week or so.

OVO will be sending them out as quickly as possible, but there are rate limits as to how many emails you're allowed to send out in a given timeframe, even with bulk sending tools. And with probably a couple of million emails to send out, that’ll take a while!

Userlevel 6
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@Melchett The renewable electricity market it not separated from the fossil fuel electricity market, so price rises impact all types of generation. 

As for the electricity standing charge rise, this is partly due to a £60+ charge to help cover the costs of transferring the accounts of customers of the 30+ suppliers that went bust.

Userlevel 2

@Melchett The renewable electricity market it not separated from the fossil fuel electricity market, so price rises impact all types of generation. 

As for the electricity standing charge rise, this is partly due to a £60+ charge to help cover the costs of transferring the accounts of customers of the 30+ suppliers that went bust.

Well, quite.  Or as Oxford professor, Professor Helm - who penned the Government’s energy security review noted:

The overall energy price is dictated by the “last unit coming onto market, which is gas”, he said. So while the cost of wind, the cost of nuclear and the cost of solar have not changed, the entire market is getting a price based on gas. It means some energy providers that are generating electricity without the use of gas are making an awful lot of money as they can charge higher prices https://inews.co.uk/news/politics/why-the-high-cost-of-gas-also-makes-renewable-energy-such-as-wind-and-solar-more-expensive-1242608

I’ll leave you to decide whether Ovo is in this bracket.  Having been with Ovo more or less consistently for the past decade, they certainly aren’t cheap any more.

As for the standing charge - sorry, but I just don’t buy it.  Why hasn’t the gas standing charge gone up by an equal amount? 

Userlevel 6
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As for the standing charge - sorry, but I just don’t buy it.  Why hasn’t the gas standing charge gone up by an equal amount? 

If you want to apply a charge for each and every household you put it on the electricity bill.

Userlevel 7
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Indeed. Not everyone has a mains gas supply and I know many cases where the household doesn’t have gas at all - including myself - and those where the household is supplied by a giant gas tank outside that gets refilled by a lorry every so often. These are just two examples as well. More probably exist.

Userlevel 7
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@Melchett The renewable electricity market it not separated from the fossil fuel electricity market, so price rises impact all types of generation. 

As for the electricity standing charge rise, this is partly due to a £60+ charge to help cover the costs of transferring the accounts of customers of the 30+ suppliers that went bust.

Well, quite.  Or as Oxford professor, Professor Helm - who penned the Government’s energy security review noted:

The overall energy price is dictated by the “last unit coming onto market, which is gas”, he said. So while the cost of wind, the cost of nuclear and the cost of solar have not changed, the entire market is getting a price based on gas. It means some energy providers that are generating electricity without the use of gas are making an awful lot of money as they can charge higher prices https://inews.co.uk/news/politics/why-the-high-cost-of-gas-also-makes-renewable-energy-such-as-wind-and-solar-more-expensive-1242608

I’ll leave you to decide whether Ovo is in this bracket.  Having been with Ovo more or less consistently for the past decade, they certainly aren’t cheap any more.

As for the standing charge - sorry, but I just don’t buy it.  Why hasn’t the gas standing charge gone up by an equal amount? 

Don't get confused with "energy providers that are generating electricity" and OVO. Drax is an example of an energy company that generates electricity. 

OVO don't generate any electricity themselves unlike some domestic energy companies (e.g. Scottish Power).

OVO buy all their electricity rather than generate it. 

"As an independent energy supplier, our focus has always been on our members, rather than generating power ourselves. So we buy electricity from the energy market, and then offer it to you at competitive rates." 

Ofgem chose to add the costs of the failing suppliers to the electricity standing charge in the price cap. Best to ask Ofgem why they did that. 

 

Userlevel 1

No matter was is said here, I still contend that OVO’s 100% renewable pitch has been exposed as a sham if not deliberately misleading. When and if the market returns to normal I for one will be looking for another supplier. 

Userlevel 7
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Sooner or later just about all supplier will probably make the same claims about renewable energy, whether or not they’re directly pulling from renewable sources only, or partially relying on REGO’s. If you keep trying to find suppliers that fit the totally 100% renewable only bracket, you’ll struggle because that’s a long way off.

That’s all I know at this time.

Userlevel 1

In that case the marketing pitch must make that absolutely clear. IMO OVO’s headline pitch did not anything about using no renewable sources or offsets and I therefore maintain I, and I suspect many others were misled.

To support your 100% renewable energy tariff, we make sure that the amount of electricity you use is matched with renewable energy generation on the grid through purchasing certificates and from contracting with wind farms directly.

 

As there aren’t separate markets for green and non-green energy sources, there’s one wholesale price for electricity at any given time. This means that when the cost of electricity produced by burning gas goes up, so does the cost of electricity from renewable sources such as wind and solar.

Are you saying that as customers on 100% renewable contracts, we’re still paying for gas and oil? This is terrible. So gas and oil giants continue to profit, even on green energy? What the heck

Userlevel 1

It is not only the gas and oil companies who benefit from this. The wind farm owners are benefiting from a 75% profit mark up too?

Userlevel 1

At the same time as benefiting from the price increase in wholesale prices they still receive the “green” levies too!

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