Energy crisis solved

[mattster]

So it's a price cap on what then? cost per mWh? did they just take an average usage over a year for a typical household and said this will cost £2500, then calculated price per mWh?

That's more or less exactly what they do.

[jamesbrown]

Actually over 80% of new businesses are still going after 5 years.

That sounds way too high, but it depends on the period you're looking at and who is measuring it and how, obviously (QE/low interest rates plus covid bailouts will skew the results massively). There are many statistics available, but the majority point to something like 50-60% failing within three years.

[dsc]

It's the unit cost that is capped (plus the standing charge, I think - could be wrong about that) and then the £2,500 is simply a rough calculation to ease understanding - it takes the usage of the average household and multiplies by the capped components, something like that.

Maybe it's just me but "cap at £2500" means just that, capping all bills at £2500 per year. "Capping cost per mWh" would make more sense imho, the whole "typical household" just adds confusion and blurs the lines.

[jamesbrown]

Maybe it's just me but "cap at £2500" means just that, capping all bills at £2500 per year. "Capping cost per mWh" would make more sense imho, the whole "typical household" just adds confusion and blurs the lines.

Right, but I think "cap at £2,500" is a shorthand for "cap at £2,500 for the typical household". I don't see how you would realistically put an absolute cap on a bill. Plus that would be super expensive and massively discourage efficiency.

[gables]

It's the unit cost that is capped (plus the standing charge, I think - could be wrong about that) and then the £2,500 is simply a rough calculation to ease understanding - it takes the usage of the average household and multiplies by the capped components, something like that.

Really annoys me why they don't also publish the unit cost and standing charge (I know it varies across the country a bit) I could at least do a direct comparison with my current tariff.

[BlasterBates]

Total bulltulip and one of those myths/lies that has been repeated so often that people just accept it as true (see also: private companies are run more efficiently than the public sector, you need 5 glasses of water a day, breakfast is the most important meal of the day etc etc). Actually over 80% of new businesses are still going after 5 years.

What you probably mean is after 1 year.

https://www.investopedia.com/article...il-and-why.asp

The 90% is long term, but only 35% of new businesses will survive 10 years.

If you invested in small caps then you would find out that they often go bankrupt.

[Paralytic]

It's an energy unit cap, the same as the price cap has been since it was introduced a few years go.

So, for those that have "typical" usage (figures are readily available), the annual gas/electric bill will be £2,500. Those that use less than "typical" usage will pay less than £2,500 per year, those that use more pay more. It's not complicated.

[dsc]

It's an energy unit cap, the same as the price cap has been since it was introduced a few years go.

So, for those that have "typical" usage (figures are readily available), the annual gas/electric bill will be £2,500. Those that use less than "typical" usage will pay less than £2,500 per year, those that use more pay more. It's not complicated.

But why not just say we will cap price per mWh at ###, then you can check your last bill, check how much you've used and calculate how much you are going to pay. Much easier than comparing your own usage to some "typical household" figures, regardless how readily available they are.

[Paralytic]

But why not just say we will cap price per mWh at ###, then you can check your last bill, check how much you've used and calculate how much you are going to pay. Much easier than comparing your own usage to some "typical household" figures, regardless how readily available they are.

That is exactly what it is (though typically per kWh not mWh), but the media seem to think the general population are too stupid to understand that, so just state the headline £ figure as a price cap, sometimes adding a footnote about typical usage.

(I'm not sure they are necessarily wrong - i'd guess a significant percentage of the population could not begin to describe the difference between a kW and a kWh)

[d000hg]

But why not just say we will cap price per mWh at ###, then you can check your last bill, check how much you've used and calculate how much you are going to pay. Much easier than comparing your own usage to some "typical household" figures, regardless how readily available they are.

Yes it's very trivial.
To work out your usage in kWh:
Take a meter reading.
Subtract the new meter reading from the previous reading to work out the volume of gas used.
Multiply by the volume correction factor (1.02264).
Multiply by calorific value (40.0).
Divide by kWh conversion factor (3.6).

To work out your cost:
Count the number of days between readings.
A)Multiply by the standing daily charge from your tariff.
B)Take the kWh usage above and multiply by your kWh tariff figure.
Add A+B.

And then do this over a year to get your annual costs for comparison, factoring in if it was a bad winter or not, etc.
IIRC some of the conversion factors vary slightly between providers too though it was 5 years ago I set up my home spreadsheet so I am not certain.