Solved

Regional pricing

  • 7 November 2018
  • 8 replies
  • 101 views

Userlevel 7
Badge +8
I was looking at the regional price chart and noted that I live in the most expensive area for electric ( Merseyside ). I wondered why there is such a variation in prices, surely all electric energy comes from the same power grid
icon

Best answer by woz 7 November 2018, 23:55

hi Duppy
you’d think so but it’s a historic anomaly based on the costs to transport the electricity in different network regions.
In some respects for the far flung regions you can see the justification as the infrastructure is longer and more difficult,(think N. Scotland) also prices are dependant on quantity so the more dense the region the cheaper it’s likely to be, but that’s just the way it is and there’s nothing you can do about it apart from moving house!
View original

8 replies

Userlevel 7
Badge +11
hi Duppy
you’d think so but it’s a historic anomaly based on the costs to transport the electricity in different network regions.
In some respects for the far flung regions you can see the justification as the infrastructure is longer and more difficult,(think N. Scotland) also prices are dependant on quantity so the more dense the region the cheaper it’s likely to be, but that’s just the way it is and there’s nothing you can do about it apart from moving house!
Userlevel 7
Badge +8
woz;15893:
hi Duppy
you’d think so but it’s a historic anomaly based on the costs to transport the electricity in different network regions.
In some respects for the far flung regions you can see the justification as the infrastructure is longer and more difficult,(think N. Scotland) also prices are dependant on quantity so the more dense the region the cheaper it’s likely to be, but that’s just the way it is and there’s nothing you can do about it apart from moving house!


Yes, I know there is nothing I can do about it and have to accept it, but with a variation of 1.79 pence per unit difference that can result in quite a large amount for a medium/ heavy user in expensive areas. Like you say we just have to live with it and pay up
Userlevel 7
Badge +11
Apologies it wasn't intended as a pay up and shut up comment, I was trying to be sympathetic and also resigned to the fact, but I guess it didn't come across too well...
I did do a chart a while ago showing the percentage variations, it's HERE if you're interested (Actually thinking about it there is something you can do, fit solar panels, but I'm guessing the feed in tariffs don't vary the same way by area..or do they...?
Duppy;15899:
Yes, I know there is nothing I can do about it and have to accept it, but with a variation of 1.79 pence per unit difference that can result in quite a large amount for a medium/ heavy user in expensive areas. Like you say we just have to live with it and pay up
Userlevel 7
Badge +8
woz;15914:
Apologies it wasn't intended as a pay up and shut up comment, I was trying to be sympathetic and also resigned to the fact, but I guess it didn't come across too well...
I did do a chart a while ago showing the percentage variations, it's HERE if you're interested (Actually thinking about it there is something you can do, fit solar panels, but I'm guessing the feed in tariffs don't vary the same way by area..or do they...?


I did consider fitting solar panels some years ago on one of the many schemes around at the time, but apparently my roof is facing the wrong direction to be profitable to repay the company, and they were too expensive to consider buying outright. I have noted that none of the houses on my road/ area have solar panels

- - - Updated - - -

Hi WOZ, I have just looked at the link you posted regarding the regional differences chart, the cgart as is the while post is quite informative and must of took some time to compile, so thank you. I did do a search for regional price difference but that post never came up, if it had I probably would never have asked the question, so once again thank you
Hi @Duppy @woz is spot on
It is down to the cost of transporting gas and electricity to your home.
The costs are determined and applied by your Distribution Network Operator (DNO) and we pass these on at cost.We don’t make money on the transport costs of getting energy to your home.

A recent exchange of correspondence with a good friend of mine who is renewing his energy contract drew attention to the difference in prices. We are told it is distribution costs. But is it really? Is not perhaps an excuse to make more money!

My friend lives in the south of England he obtained quotes from PP and SO. He remained with SO although I think he was not quite comparing like with like.

If I was charged the rate that PP proposed to charge him I would be paying £156.41 p.a. more than I am being charged for the next two years. Partly, but not entirely due to PP’s charging rates per fuel being slightly higher than my fixed two year contract. But it is still a lot more.

I checked what SO would charge me. With SO it would be £196.56 p.a. more than I am paying but it’s contract is for 12 months.

I then decided to check PP’s current rates for me and for him and got:

Me - NE of England: 18.6606 p per kWh for electricity: 4.075 p per KWH for gas (my fixed rate for two years is 17.971 & 3.457 - pleased I fixed when I did!). PP’s variable rate is 17.619 & 3.226

My friend - SE of England: 18.7436 electricity and 4.1696 for gas on a 2 year fix and 17.6988 & 3.3159 on the variable rate.

The differences at first don’t seem much but if you assume a gas consumption of say 17,000 kWh in a year and 4,000 kWh for electricity then my friend is charged £16 more per annum for gas and £3.32 more for electricity. On their own they don’t sound much but multiple by the volume of users on the higher rates it has to add up to more than the alleged distribution costs. As all suppliers play this game then an awful lot is being made from this little lark. Just take say 50,000 customers in Hertfordshire, there will be more, then the suppliers are making something like £800,000 per annum more for gas and £166,000 more from electricity. 

It seems this differentiation on the back of what may be be close to a fiction is producing a lot of extra revenue. That is without adding in the fact that for the likes of BG it is it’s own supplier.

Somebody better check my maths and shoot me down in flames!

Userlevel 7
Badge +8

Having recently received my invitation to renew my fixed tariff, and after @G4RHL's post, I have been looking at the various tariffs available, there are a few slightly cheaper deals, but not really enough to jump ship. But the difference in tariffs between regions is astonishing.

Using PP's figures, the cheapest variable electric tariff is East Midlands @ 17.523p, the most expensive is Merseyside and North Wales @ 19.526p, a difference of 2.003p per kWh

The cheapest electric fixed deal tariff is East Midlands @ 18.563. the most expensive is Merseyside and North Wales @ 20.681p, a difference of 2.118p per kWh.

The cheapest Gas variable tariff is Northern @ 3.227p and the most expensive is Southern Western @ 3.449p, a difference of 0.227p per kWh

The cheapest Gas fixed tariff is Northern @ 4.075p and the most expensive is London @ 4.347p, a difference of 0.272p per kWh 

Using the usage figures from @G4RHL's post of 4000kWh for electric and 17000kWh for gas and based on 50,000 customers in each region, it seems the DNO's in the most expensive regions are taking in £423,600 for electric and £924,800 for gas, than the cheapest. 

When you consider the actual number of customers in these regions across all suppliers, that amounts to an awful lot of money

If the difference in prices is truly down to the DNO's, that takes some justifying, I know they will cite extra costs due to locations etc, but Merseyside and North Wales is not exactly in the middle of nowhere

 

 

 

 

 

 

 

 

If the cost of distribution is so variable then one should see much cheaper figures for those living near electricity generating stations and/or close to natural gas terminals. But hey, wait a minute. Natural Gas may arrive from the North Sea in perhaps Aberdeen or the North of England but what is the extra distribution cost to get it to say Manchester? Nil. It travels by pipe. Pipes laid in the late 1960s when everybody was converted to natural gas. It is not “distributed” as such. Similarly electricity. Lorries don’t drive around dropping off electricity. We are all effectively served by the same source or sources.
 

ipso facto, rip off!

Reply