There is much chatter about the increasing costs of energy, apparently Ofgem will announce a new price cap on Friday. The situation is epitomised by Martin Lewis’s video spitting bricks about the issue.
It’s clearly going to be a big issue for a lot of people. Something that puzzles me about this is that I recall power prices being pretty damn high in the past, and my recollection of current (post April, pre-end of this month) power prices is that I have seen this movie before. I remember power costs being high in the early to mid-2010s in real terms, it felt like they were higher. Some of this is because that was a period when I was trying to save money, firstly to load enough into the stock market to retire early, and secondly once I had retired to eke out the period before getting hold of my SIPP savings for as long as possible. However, I wasn’t shocked by the March changes, because I remember real prices being higher.
Undoubtedly projected costs are going to be higher in real terms than they were before, after all going to war generally damages the economy, plus there is the cleverness of Brexit, which seems to be dragging its feet on delivering the promise of making us all so much better off. In an attempt to substantiate this recollection, I inquired of the ONS, which sadly only goes back to 2015, with something called the energy price index.
Turns out gas is currently (up to the end of this month) still cheaper per unit than it was in 2015, in real terms. The dotted line is when the price cap mechanism was instigated. It is electricity that is much dearer than it used to be per unit.
This is deliberate – most of the green crap has been loaded on the cost of electricity. You are paying for other people’s solar panels (thankfully the subsidy on that has been dramatically reduced – if you think solar panels on a domestic basis is such a terrific idea then pay for this frippery yourself). I hate green crap subsidies with a rabid vengeance, because I don’t want to pay for middle-class homeowners’ virtue signalling. I have nothing against renewables – I invest in wind, solar and power storage, as well as oil, because I am shameless, but I think poncing about on a domestic level is bonkers. As David Kay says, every big helps.
Making the poor pay more for their power just so you can tell your middle-class rugrats that you are doing your bit is really rather ethically dubious. That is because ever since Thatcher raising income tax has become anathema, so these subsidies come from indirect taxation, raising other people’s electricity bills by 25%. Britain generates much of its electricity using gas, so there’s no good reason for the divergence between electricity and gas unit prices, this is the extra loading on electricity because it’s harder to live without electricity than gas, plus many households don’t have mains gas.
There’s an argument than I can afford to subsidise your green tossery, but I don’t want to. However, I can’t fight Government policy. I collect my share of my and other people’s bills via the renewables inducements to UKW and its ilk rather than on an itty-bitty scale, repossessing the subsidy loading on my power bills through the stock market, but it’s still a rum way to do policy. Resistance is futile, you have to join in. Unlike middle class eco-warriors limited by their south-facing roof area and domestic consumption, I can collect far more subsidy that I could on my own consumption. Your average solar installation costs £5-7k, you can invest a lot more than that if you are minded to.
IMO the reason there is more hullabaloo about heating costs now than seven years ago is because government policy has been immiserating the poor through a punitive approach to benefits on the bottom end. Higher power costs makes more difference now, because it’s a larger part of a smaller available income pie at the low end. And, quite frankly, it seems that the current wannabees don’t giveashit, and in 2019 it was clearly more important to more people to have some grandstanding and Get Brexit Done by an established liar than give a shit too. We are where we are because we wanted to believe in magic. Were you asked by the grandstander in chief whether power bills of £6000 p.a. were a price worth paying to stop Putin’s tanks? Me neither.
Under Johnson, the UK also appears to have taken a gamble on an almost complete break with Russia, at least so long as Vladimir Putin remains in power. There is nothing from London, as there is from Berlin and Paris, about keeping channels open to Russia, because Russia will still be there when the war is over.
At least BoJo acknowledged the issue in his valedictory grandstanding photo-op
Comparing the costs of Russia’s war, he said: “If we’re paying in our energy bills for the evils of Vladimir Putin, the people of Ukraine are paying in their blood.”
Neatly making this issue the next PMs problem. Never one to stick around and pick up the pieces, our Bozza, or to answer awkward questions. Contrast BoJo’s apparent inspiration, who had the cojones to front up the cost of war in his first address to Parliament
I have nothing to offer but blood, toil, tears and sweat.
while observing sotto voce to his generals
Poor people, poor people. They trust me, and I can give them nothing but disaster for quite a long time.
Not quite the same as have your cake and eat it, eh? Sometimes you do have to experience privation to defend something more important, but Putin isn’t shit for brains, and he is no doubt counting on resolve withering somewhat. General Winter has fought on the Russian side before, against Napoleon and Hitler, and now Putin is hoping he will fight against the decadent and softness of the West, even if they aren’t physically marching on Moscow. I don’t really know where I’d place my bets.
Given the level of inflation I am happy to take my chances in the stock markets on energy to defray the extra costs, though I am glad I made most of my push before July, I’m not able to work out if the bonkers mini-rally is in fact the £ falling down the toilet or the return of irrational exuberance. Perhaps it is the froth blowing off the top before the monster that has been rising from the deep finally breaks the surface.
You can do something about this
You could join the Don’t Pay campaign.
We are a movement against the rise in energy bills
Yeah, I take a principled position against poverty, war, dogshit in cities, and all sorts of things I don’t like. Doesn’t mean to say they don’t happen. You may as well be against the sun rising. Magical thinking at it’s best. Martin Lewis doesn’t officially approve.
Readers of this probably have too much to lose with don’t pay. It is surprising to me that suppliers are obligated not to pull the plug on non-payers, previous generations didn’t have such scruples 😉 However, they can send the heavies round.
More practically, you can try and use less. This is another example of the Sam Vimes Boots theory of socieoconomics, because the options open to homeowners, including those who don’t actually own their house but have a mortgage, are far wider than those who rent.
I managed to reduce my electricity consumption by 20%, and given the loading on electricity that punches well above its weight. It’s the financial equivalent of reducing gas consumption by ~40%, which would be a very noticeable detriment to lifestyle in winter and much harder to do.
The big picture
Most of the wins in domestic settings are to do with anything that is designed to change temperature. If you run an industrial process involving big changes in temperature, like a bakery or a cement works, then you are out of luck, because your product is about to get a lot dearer into a market that has less disposable income and you aren’t protected by the energy cap. I have no idea what to do about that, but at home you have options.
In general drive down waste before making any capex. In the UK that means loft insulation and draughtproofing. The good news is that the materials are relatively cheap and this is an entirely unskilled DIY job that any reasonably able person can do. It’s an unpleasant job – fibreglass insulation is irritating to handle and work with, though it has the advantage of not catching fire and apparently not being particularly attractive as rat nesting material. You can use other materials, mainly made out of plastic, but remember a lot of wiring is up there and plastic fumes are nasty 😉 This used to be subsidised, I recall paying less than £2 a 5m roll when I last did that job in the old house, but these days it looks like B&Q will hit you up for £25 a roll, which bites. It’s not the greatest fun you will have of a weekend, but apart from a large crawlboard and a big pair of scissors there’s no specialised equipment or hard to learn skills. JFDI
If you have cavity walls and for some bizarre reason there is no insulation in the cavity then that’s the next step, though it is a professional job it will pay a return in a reasonable time. Double glazing which also addresses most draughtproofing is another professional install that has a reasonable payback, after that you are in the wilderness, because insulation gets difficult for solid walls, it’s probably easier to move 😉
The next thing to understand is that the unit price on electricity is much higher than that of gas. So focus on anything that reduces electricity consumption, and favour heating with gas. If you heat with gas, you will use more energy in kWh, because heating is the biggest annualised load, but you may pay more for electricity. As an example, over the last year I used half the energy kWh in electricity as I did in the kWh form of gas, but paid twice as much for that electricity, near enough. Before Putin’s antics I investigated the feasibility of generating electrical power with gas as well as considering changing over to cooking with gas, basically to cut off the government-attached hangers-on. I concluded the risk wasn’t worth the reward, but it would have paid back in the medium term, given the boundary conditions at the time 😉 The antithesis of that is, of course, the heat pump, which does a heating job using electricity that can perfectly well be done with gas.
Heat pumps? Eh?
In order to save 75% of electricity energy that costs three times as much you get to make a big capital expenditure and change your radiators. On the upside, in some rare cases1 you may get air conditioning, and of course the warm fuzzy feeling of being a greenie doing your bit. On the downside, that 75% efficiency doesn’t hold at the coldest time, you’re paying three times as much for the energy and you are potentially carrying a lot of poor people’s bills on your back. I could see the sense if you used bottle gas or oil for heating, but against mains gas this sucks. Electricity is a highly concentrated form of energy and is best used for what it does well.
I struggle to see heating as falling into that category, in a country that generates a third of its electricity using gas, losing 50% (roughly estimated from the heat -> mechanical power of the steam turbine and distribution losses) of the calorific value in the process it seems a little bit mad, though I can see that some things may make sense in where we want to be in future. But don’t be an early adopter unless you have a specific reason to carry the baggage. Not all countries have this disparate taxation in electricity and gas costs, a heat pump may be a perfectly reasonable proposition under a different cost regime or generation mix. If you don’t believe me, take a look at what Her Majesty’s Government have to say under five reasons to get a heat pump
Moving to a heat pump means you can avoid the volatile prices associated with gas and oil. If you are using oil, Liquefied Petroleum Gas (LPG) or electric heating, you could see a reduction to your energy bill if you move to a heat pump.
They are very careful to avoid saying you can save running costs compared to mains gas, because it’s not true in the UK 😉
There is one specific exception to heat with gas. Even if you have a gas cooker, use an electric kettle for your tea, because the close coupling of the heating element with the water, and, with a glass or plastic electric kettle, the better insulation, all tend to beat out the losses to the air, heating up the metal gas kettle notwithstanding the gas energy cost advantage of a third of electricity.
An Ermine’s journey to reducing electricity consumption
It’s a little bit embarrassing2 that the inspiration for this, other than high electricity prices, is an American. OVO energy have a listing of average household usage across selected countries3.
Not everybody in the US is that profligate. Mr Money Mustache has got his power drain down to 300kWh a month, which is about the same as mine, though I note he doesn’t mention cooking, and the furnace blower (as opposed to the furnace4 itself) as an itemised load implies to me that he heats with something other than electricity; if it’s gas I presume he cooks with that rather than electricity. In a followup in 2015, MMM says he used 2MWh over 15 months, coming out at 133 kWh pcm. That is less than half my power drain, and a serious source of embarrassment to the Ermine fur. It should be noted that I cook with electricity, so some of the difference is due to that.
MMM’s followup is more succinct than this ramble. This is more a walk-through of my journey, which may help walk some folk through what you need to do. Go to MMM for the short-form version 😉 I worked as an electronics engineer for a couple of decades before moving to IT. Although electrical engineering is a different discipline, the electronics background has many of the concepts in common. Everybody’s energy usage is different, but so far I managed to reduce my electricity usage by 20%, and I haven’t finished the job yet.
You have to be able to see what you are doing – knowledge is power
I commissioned an efergy engage whole house system, reusing some components from my old Efergy elite monitor5, that died of causes unknown but wasn’t obviously fixable when I took it apart.
I loathe software as a service and subscriptions with a vengeance, but sucked it up in this case because the price of entry is the hardware rather than a subscription, and in the end this is a service I can live without OK if efergy does bust or decide to do a hive. Some folk will say why not just take a smart meter, but with my old-skool rotating disc meter they will have to bash on the door and look me in the eye to cut me off, rather than some oik in a call centre going clickety-clack. That’s worth paying £70 to do the smart monitoring job myself. If they teach me how to save £70 worth of power by the time Efergy goes titsup then I am in the black, power saving is a gift that keeps on giving. If you do have a smart meter, knock yourself out and save £70 if it offers you the charting thing with a resolution down to 1 minute.
Go for the big wins first – anything that heats
I installed Efergy early in March. And got to see this
The second ratty lump at 6pm around 2.5kW is roasting a chicken in the old electric cooker. But look at the shower hit in the morning, oy vey. Now this sort of monitor needs to have a decent time resolution, arguably that was something the old Efergy Elite Adobe Air software didn’t offer. A stupendous load of 10kW needs a finer time resolution than the oven at 2.5kW, because it matters four times as much. In many ways the summarised kWh split by hour display is more useful to me.
Which shows the shower takes about 2.1kWh, whereas the roast chicken takes 4.78kWh. The difference is, however, that we roast a chicken once a week, not every day. Having the oven on at 200 for an hour and a half is a shade over twice as much energy consumption6 as the shower. And it’s pretty obvious that roasting a chicken is going to take a shedload of power, because the kitchen gets warmer. In March that’s not such a terrible thing, though in a July heatwave not so much. So guess what, we didn’t use the oven in the heatwave. Simples.
I switched back to the gravity-fed shower, heated by gas. This will mean using a little more gas, particularly as I don’t have an instant-on boiler.
March is a little bit short (because Efergy wasn’t tracking through the whole month) but April is representative of previous months on the old Efergy system, so pulling the shower saves me 26 kWh a month. Assuming this holds across the year that is £88 (at 0.283 p/kWh), which isn’t bad for an hour’s work with a spanner and a capex of 50 sods for a new showerhead and hose. The cost recovery time will be shorter if the price cap raises electricity prices again at the end of this month, which seems to be expected. It will be offset by the gas consumption going up a little. I will look for that on a year on year basis.
The next upgrade was to get a modern cooker with an induction hob, rather than this old-skool sort of hob element.
Photo copied off some auction site, it’s not my old cooker. You need to book a temperature change two minutes before wanting it, usability sucks.
Mrs Ermine uses an antediluvian piece of kit called a Moka pot that makes coffee which can do double duty as battery acid, and this involved heating up the old hob and filling the chamber with boiling water from the kettle, then waiting for it all to rise with a menacing sound. A barbarian way of making really harsh coffee IMO, but each to their own.
The classic Italian Moka pot design is an aluminium casting which isn’t going to work on an induction hob but Mrs Ermine had a purge on aluminium cooking equipment a few years ago, so her Moka pot was induction capable from the get go.
Efergy told me in early April with the old cooker doing this with kettle plus hob rocks in at about 1kWh, though I should knock off the static load which was 0.28kWh just before. That now shows at maybe 0.6, less again nearly .3 static. There’s no need to boil the kettle first, and overall the coffee happens much faster, as the induction hob heats the metal in this thing directly. The same applies with pretty much everything – the power control on an induction hob is much closer to the response time of gas. Usability is greater, and efficiency improved, because you don’t have to heat up a great big lump of steel hotplate. The induction process heats the pan, standing on a ceramic insulating surface, so the lag is the same as gas, which also heats the pan in an insulating medium (air).
How does that do with the chicken? This is an electric fan oven, but it is the same basic tech as the old cooker – resistive elements in some ceramic thing on the sides and a blower fan to circulate the air. However, in an electric oven you can gain efficiency by sealing the container better.
Comparing this against the old oven, bearing in mind it looks more dramatic because the mahoosive heave-ho of the shower is absent in the morning and the chart auto scales, there’s more wait in the heat up, wait, heat, wait, heat. The peaks after 19:00 are the dishwasher. Apart from the peak load being lower, looking at the corresponding hour block chart the total used to roast a chicken is 2.44kWh, half the previous amount and a shade over the erstwhile shower. This isn’t surprising, since the kitchen gets less warm, and indeed when you open up the oven to baste the chicken or finish up, you get a serious faceful of uncomfortably hot air that steams up your glasses, and I have become used to opening the door and leaning away to let that rise. This translates to more efficiency through not letting the heat out into the kitchen for most of the 90 minutes or so. Continue reading “Saving energy at home”