Customers on variable tariffs (SVT) are being notified these days of tariff increases from 1 January. At the same time, many are being given the opportunity to switch to a fixed-rate tariff. I am trying to decide whether it would be a good idea to fix, but I’m not sure I have all the information I need. Gas hasn’t been invented yet in my corner of the world, so I’m only interested in electricity tariffs.
Cornwall Insight are a well respected crystal-ball gazer where energy prices are concerned. Their predictions for 2024 show small ups and downs in unit prices, but one startling forecast is for a hike in the standing charge of the order of 15% on 1 April. For a light user like me, this is hugely significant. On SVT, the standing charge would amount to 37% of my bill in January, but by October this would have risen to more than 41%. The fixed rates I’m being offered would keep the standing charge at more or less the current level, so that makes fixing look like a good idea.
Sometimes l don’t understand how it works but mine was coming to an end. my one starts next week and l think mine is a standard one . It’s is a cheaper one as it all has come down.
That's incredible. The fixed daily charges for my account are ludicrously high. It reduces the incentive to save. My variable daily rate is 66.55p electric and 30.07p gas. North East England.
Unfortunately the regional pricing of electricity means some areas of the country pay more.
This difference in pricing is potentially going to increase as the industry moves to zonal and nodal prices, where prices may vary by local substation. Be interesting to watch how that feeds into consumer tariff.
In my opinion these saving schemes offered are a gamble, implementing changes as shown below puts you in control of what your energy costs you. I run a 2 bed semi detatched house and my combined consumption throughout this winter, including standing charges and vat is under £100 per month so it can be done.
The only way you can realistically save is to drastically cut down on your consumtion. Not so easy to do if you have a family. I am retired now and live on my own and have done the following:
Throughout the winter indoors, I wear my oodie that keeps me toastie warm
I use a 650w halogen heater instead of putting on the central heating.
I have an electric blanket 200w instead of heating up my bedroom
I strip wash daily and have a long soak in the bath once a week
When I cook, I cook for 8 and freeze 6 (One goes in the fridge and one eaten on the day)
Use the washing machine on cool and full loads only
Dry washing outside even through the winter (I have a canopy that protects the washing from the rain)
Switch over to low energy bulbs and don’t leave lights on.
Doing all of the above I am now using one third of the energy that I used to use, even though the prices have climbed I am actually spending less on energy than before the price hike.
Once you get into the routine it’s not so bad and personally I would rather spend less on energy whilst also helping the environment and have more money to spend on myself.
I hope this helps.
House sharing through the winter.
When my kids were young and later when they went to school my best friend and I would house share in the winter to save money.
I would do my housework and then go to her house for the day, the next day she would come to mine. This way we had company for ourselves and our kids and we were only heating one house each day between us. It was fun.
That's incredible.
Not really - because you are not comparing the same things at all.
Juffus showed the basic 'Simpler Energy' and the '1 year fixed loyalty'.
You showed '2 year fixed + heating control - Economy 7' and '1 year fixed loyalty - Economy 7'.
The Heating Control tariff includes extra - A Tado Wireless Smart Thermostat kit, paid for over the 2 years (The cost is added to the Gas Standing Charge). https://www.ovoenergy.com/2-year-fixed-heating-control-terms Both of yours are Economy 7, do you currently have economy 7?
Those are really helpful and innovative tips @mozzie55, I never thought of the house sharing idea!
@Jeffus Are you looking at the wrong tariff information? Your current tariff should be look up from below:
@Jeffus Are you looking at the wrong tariff information? Your current tariff should be look up from below:
Good question @samsonluk
The plan page you have posted is excluding VAT.
All the figures on the renewal page include VAT
So an easy way of comparing rates on variable and fixed tarrif is to look on the renewal page. Then everything will include VAT.
Also:
The IHD figures also include VAT and standing charges.
The figures on the usage page don't include VAT or standing charges
Rates are regional so other posters may well see rates higher or lower than those posted
Whether to stay on the cap or go fixed is a difficult decision because there is no clear distinction between the two at the moment and this is unlikely to change for the foreseeable future. It's worth reading the advice from Martin Lewis which is based on sound principles.
Just to add to your confusion, there was a lengthy discussion here on the question of to fix or not to fix just before the January 2024 price hike. Have a look at it - you may find it interesting.
The 1 year loyalty tariff is worth considering as there are no exit fees if you switch to another ovo fixed tarrif in the future.
Currently slightly less than the variable tariff.
The 1 year loyalty tariff is … Currently slightly less than the variable tariff.
These are average GB figures, so they won’t match your own. It’s the predicted change from quarter to quarter that’s interesting
Am usually fairly confident about using the Cornwall Insight figures, but very wary of risk right now. The probability of further wholesale price rises has increased IMHO since the last Cornwall Insight press release
Wholesale prices not unsurprisingly on the up today.
But probably won't go bananas like it did in 2022 when Europe started to cut itself off from Russian gas supplies and Europe is now oriented towards the US in a big way.
On the other hand wholesale day-ahead electricity prices are very strongly negative tomorrow (paying to take energy off the grid) and my guess is that this is because of large scale dumping of demand by utilities which they bought on the futures market quite a while ago but I would be interested to hear views on what the actual reason is though.
But probably won't go bananas like it did in 2022 when Europe started to cut itself off from Russian gas supplies and Europe is now oriented towards the US in a big way.
On the other hand wholesale day-ahead electricity prices are very strongly negative tomorrow (paying to take energy off the grid) and my guess is that this is because of large scale dumping of demand by utilities which they bought on the futures market quite a while ago but I would be interested to hear views on what the actual reason is though.
High wind drove the day ahead prices lower, double the seasonal average. But these odd days only really help octopus tracker and Agile customers at the moment. As you say energy suppliers buy most of their energy in advance and trade if they need a bit more or less. Also the CFD contract for difference process mean wind turbines get paid a fixed price at the end of the day anyway, a netting out payment is added to our bills to cover when the price is higher or lower than the fixed price. All the energy suppliers that tried to game the market by not buying ahead when bust. We all paid for this with a levy on our bills. OVO Anytime can make use of low 30min slots in terms of pricing which is good.
Like you, I also think it is unlikely we see the huge spike we saw coming out of covid and the start of the Ukraine conflict, none the less forward electricity prices have risen since the Cornwall Insight figures from the low they were at
This shows the forward electricity prices for next winter and summer and how it has changed over time.
It is just I think the expectation that prices will fall feels a bit out of date to me.
Be interesting to watch the fixed price offers from suppliers over the next month and how world events unfold.
Hi @Jeffus and thank you for coming back.
This is the difference between two different markets. The Futures Market which will fluctuate slightly over the year/years but at least once source had suggested no real drop back to pre-2021 prices for the next 10 years at least. The day-ahead wholesale market will have its ups and downs but if you track this year’s average whole-day rate against 2023 there is a scarily close relationship that has been operating over the past six months almost down to the timing and the depth of the price plunges which is just beginning to suggest that these are not as random or as ephemeral as might be thought. Time will tell on that.
As a summary, if you are a customer who likes price stability then Fixed-rate Prices or even the SVT is definitely for you. If you can flex your usage out of the peak slot then Power Move is a good, zero risk, add on to have. There is plenty of good guidance from the forum volunteers and other users on here on how to meet the targets
My question is: Will more utilities offer a more wholesale/flexible pricing option like **Power Move (and more) to customers who want more than price stability.
Peter
** Even Power Move is a type of flexible pricing as the total bill for the month depends on when you use your power which is the same type of result as wholesale day-ahead but more predictable and no risk.
Hi @Jeffus and thank you for coming back.
This is the difference between two different markets. The Futures Market which will fluctuate slightly over the year/years but at least once source had suggested no real drop back to pre-2021 prices for the next 10 years at least. The day-ahead wholesale market will have its ups and downs but if you track this year’s average whole-day rate against 2023 there is a scarily close relationship that has been operating over the past six months almost down to the timing and the depth of the price plunges which is just beginning to suggest that these are not as random or as ephemeral as might be thought. Time will tell on that.
As a summary, if you are a customer who likes price stability then Fixed-rate Prices or even the SVT is definitely for you. If you can flex your usage out of the peak slot then Power Move is a good, zero risk, add on to have. There is plenty of good guidance from the forum volunteers and other users on here on how to meet the targets
My question is: Will more utilities offer a more wholesale/flexible pricing option like **Power Move (and more) to customers who want more than price stability.
Peter
** Even Power Move is a type of flexible pricing as the total bill for the month depends on when you use your power which is the same type of result as wholesale day-ahead but more predictable and no risk.
Power Move is OK but is very simplistic as the power move period is fixed every day and there is no downside. Also as you say it doesn't take any account of wholesale prices or pay high usage users any more which would make the most difference longer term. It isn't bad as the high use of fossil fuels and high prices is usually around the same time every day. But in the future this may change. Even now some local areas (sub stations) have peak usage overnight due to a concentration of EVs. So a move to zonal and nodal (your local substation) load balancing and pricing is on the cards for the future. Without things like this the investment in infrastructure will be eye watering. A level of central control like Intelligent Octopus, OVO Anytime is likely to become more widespread which will also help. This functionality is already mandatory in new EV charges to prepare for the future. This central control may be by supplier, regional or national with some clever tech managing load in many of our homes. The challenge with anything like PowerMove as it scales up is that you can end up with a large peak load in some substations just after the powermove period.
There are a few things like Power Move offered by other suppliers and of course the National Grid Demand Flexibility scheme which is much more targeted.
If this is a subject you are interested in then have a read of this and input to the consultation.
We may not be many years away from everyone being on some sort of peak/off peak tarrif as a default option.
I certainly agree with the introduction of flexible tariffs but I also have concerns about people’s abilities to manage their demand on such a tariff and I think this is where a good support team from Ovo would help enormously and I see the need for able volunteers becoming more important.
By fixing, you can lock in your current standing charge rate and potentially save money in the long run, especially if Ofgem's changes to standing charges don't happen before your fixed term ends.
Well l have fixed it has got to be cheaper then last time round. just got an email to say l didn't hit my target for this month. but sometimes l find it harder to use less. but if you eat at eight like we do. so you are using the oven and hob. why would eat after nine a bit late. we got use to that time any way. l do use essentials like appliances washing machine. just done a bit of ironing now so that uses less.
For anyone following this, I noticed yesterday a new 1 Year Fixed Loyalty plan, dated 09/05/2024. It represents a significant saving for me over the current SVT and even more over the year using Cornwall’s predictions. It’s a 5.5% saving on the unit rate and 7.1% on the standing charge for me compared with my current SVT, and it’s about 7.5% cheaper overall than what Cornwall is predicting. They would have to have got it very wrong if rates were to change so much as to make it worthwhile for me to switch back at a cost of £75.
This plan is a lot more generous than the 1 Year Fixed plan dated 18/04/2024, so I’ll be keeping a close eye on it for a few days.
sETA] … bearing in mind that the Q3 price cap will be announced in a couple of weeks’ time.
Just checked my mother’s gas and electricity tariffs (she is with British Gas). She fixed about 9 months ago so fixed at a high rate. BG allow you to swap to another fixed tariff without incurring the exit fee. So no brainer really. Fix again and if it goes down fix yet again, if it goes up she is quid's in.
Maybe OVO should consider something similar?
Maybe they should consider that. if it goes up we can change our mind and if it comes down do the same without paying an exit fee. that sounds like a good idea.
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