Following the move by British Gas to cut its prices (an average of 7%), many of the leading energy suppliers have all announced similar drops.

Npower has slashed gas prices by some 7%, but reports suggest that these cuts do not apply to its tariffs online. It’s reckoned that around two million homes will get the benefit of the drop by the end of March, 2010, but those customers who are on the standard tariff (and that’s just shy of four million customers) won’t see any major change at all.

But Npower say the reason for not introducing a drop across all its prices is due to the competitive nature of its existing price points.

As to estimates how much Npower customers will save, it’s calculated that those taking only gas from Npower will benefit from around £60 a year and for those taking both gas and electricity, the saving will be around £50.

Npower said on their website:
“We are able to reduce our prices now as the cost of the gas that npower purchased in the past can now be used in today’s prices. We are now cheaper than British Gas for gas on a national average basis of all payment methods at an average consumption level of 20,500 kWh.”

Other gas suppliers weren’t far behind, with Eon saying that its prices will fall by 6% by the end of March, 2009. Good new says Eon which calculates that for it’s customers on its standard tariff and paying by direct debit, the yearly saving will be £42 a year, although cynics suggest that Eon had hiked its prices so much over the last couple of years, that its cost of gas will be a lot higher than it was at the start of 2008.

Scottish and Southern Energy’s price drops range from 4% to 9% and much depends on what type of deal the customer has, but there was no drop in electricity prices. So those with dual and electricity deals will see their bills cut by around 4% and those with single gas deals will get a 7% drop. The ones benefiting from the bigger 9% drop are those using pre-payment meters.

Although obviously good news for customers of the energy companies, consumer groups have described the reductions as miserly and warn that prices could rise quickly again towards the end of 2010.

Guest Article by Neil Camp

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British Gas owner Centrica has just announced results at a time when the country’s regulators are asking the energy companies to pass on more quickly to the customer the drop in wholesale prices.

But whilst Centrica admit in their financial statement that there was a substantial drop in both electricity and gas wholesale prices in 2009, it warns that they will be heading north again in 2010.

In their performance review, Centrica said:
“In 2009, energy was once again never far from the headlines. Wholesale UK gas and electricity prices both declined sharply from the levels seen during 2008 and while the forward curve indicates that they will rise again during 2010, it is clear that we are in a very different commodity price environment from that experienced in 2008.

“This comes at a time when the UK Government recognises that unprecedented levels of investment will be required across the industry if security of supply is to be maintained and tough environmental targets met.”

As for the financial performance of Centrica, for 2009 it recorded revenues of £21.96 billion, up 5% from 2008. Operating profit rose from £661 million in 2008 to £856 million in 2009.

As for the year’s achievements, Centrica made a major acquisition which increased its gas and oil reserves by 50%. It also took a strategic position in nuclear power by acquiring a 20% equity in British Energy, a company which owns and operates all of the UK’s nuclear power stations.

It highlighted a strong performance from British Gas, which included operational improvements and price reductions. It pointed out that there were some 550,000 additional product holdings, which included 164,000 additional households taking both energy and service products.

What’s more, British Gas’s commitment to the growing emerging energy efficiency market would create 1,100 new jobs in 2010.

Sam Laidlaw, Chief Executive of Centrica, said:
“2009 was a year of significant achievement for Centrica with British Gas now transformed and the completion of the Venture Production and British Energy transactions. Our existing strategic priorities have now been achieved, and today we have announced new priorities to build on the robust, vertically-integrated business model that we have in place. Centrica is well-positioned to pursue growth opportunities and lead the drive to a low-carbon world, whilst maintaining the financial discipline to secure strong returns on our investments.”

Guest Article by Neil Camp

The largest supplier of residential gas in the UK, British Gas, has cut its standard gas prices by an average of 7%.

For the average gas customer, this will mean a reduction of around £55 a year from their bill. It is thought that some eight million households will benefit from the cuts and the price changes take effect immediately.

Bearing in mind this is the third British Gas price cut in the past 12 months, it means that nearly £190 has been chopped off the average annual dual fuel bill.

Phil Bentley, British Gas Managing Director, said:
“At British Gas, we know household budgets are stretched, and that our customers are concerned about the effect the recent cold weather will have on their winter fuel bills. I’m pleased we’re able to offer our customers some extra help with this gas price cut – and that we’re able to do this while it’s still winter, allowing our customers to really feel the benefit.

“This latest price cut means that, no matter where you live in Britain, British Gas is offering on average the cheapest standard gas, electricity and dual fuel prices – beating all other major suppliers. But, at British Gas, we know that cutting prices is just part of the picture in helping our customers cut their fuel bills; we’re also doing more than any other supplier to help our customers use less energy. As well as cutting prices three times in the past year, we have been helping our customers improve their energy efficiency and cut their energy use by 7%.”

British Gas claim that last year, they cut both standard gas and electricity prices by an average 10%. And the May 2009 electricity price reduction saw British Gas become on average the cheapest supplier of standard electricity across the UK.

What’s more claim British Gas, this latest gas price cut means that they are now also the cheapest major supplier of standard gas at average consumption, and therefore of dual fuel, right across the UK.

In another move, British Gas has also removed the price ‘differential’ for gas pre-payment meter accounts, meaning that pre-pay gas customers are now paying, on average, the same for their energy as customers who pay by cash, or cheque.

Find out more about British Gas here.

Guest Article by Neil Camp

Despite the recent snow and ice, and a near grounding halt of the country due to the horrendous weather, the team at the npower owned and operated Tilbury Power Station in Essex have managed to cope with the increased demand for electricity.

Tilbury is a coal-fired power station – not the favourite type of the green lobby of course – and had to bring all three of its units into operation in order to handle the evening peak load.

Station manager Nigel Staves explained:
“When we were informed of the expected snow storms we put our plans into place to ensure that all essential workers were able to get into work. There are no problems with power generation and although we have obviously seen a rise in demand the situation is well under control.

“Tilbury Power Station has good supplies of coal and we have contingency plans in place to ensure that all other vital supplies to the power station are not affected by the poor weather. Weather like this shows the need for a balance of fuel supplies for generating electricity across the UK. Demand is high at the moment but within the levels anticipated during the winter months and Tilbury station is playing a major part in keeping households and businesses warm throughout the region.”

Ironically it’s not the increased demand for power, or coal supplies that cause the true problems for stations like Tilbury, it’s more about staff having to fight their way through snow drifts, battle along icy roads and keep their cars on the road in order to get to work. And the power station has to be manned 24/7, including Christmas.

And it’s a good job they do, bearing in mind that Tilbury produces some 1,063 Mega Watts of electricity, which is enough to power some 80% of Essex, around 1.4 million people.

Guest Article by Neil Camp

Comments from the Government’s new Chief Scientific Advisor have not gone down well with top boiler manufacturer Worcester.

They were dismayed by Professor’s David Mackay’s first public comments, on his first day in his new job as chief scientific adviser at the Department of Energy and Climate Change, which were designed to set out his vision for Britain’s energy future which centre on a significant increase in nuclear power capacity.

Worcester saw the advisor’s words as a: “…a thinly veiled attack on the use of gas in domestic heating.”

They were particularly irked at the Professor’s words which said:
“Setting fire to chemicals like gas should be made a thermodynamic crime. If people want heat they should be forced to get it from heat pumps. That would be a sensible piece of legislation.”

Neil Schofield, head of sustainable development at Worcester, Bosch Group, said:
“Professor Mackay’s comments set out a vision for Britain’s energy future based upon electricity, but it does not reflect the reality on the ground that domestic heat is predominantly gas powered in the UK. The logistics of replacing all gas-fired boilers with heat pumps, even in the medium term, would be an enormous undertaking significantly dwarfing the conversion from town gas to natural gas in the 1960s and 1970s.
“Professor Mackay has issued a new series of far flung objectives, bearing in mind that nuclear technology will take at least 20-30 years to come on stream, with no thought to the short term, the next 10 years. There is still no clear roadmap for either consumers or the heating industry of how we are going to meet the near term objectives.”
“Professor Mackay talks of people being forced to install heat pumps, but gives no indication of how consumers will be helped with the capital cost or what they should do if heat pump technology is not suitable for their own home. Our experience at Worcester, Bosch Group is that heat pump technology is not suitable for all applications. I would like to ask Professor Mackay how he heats his own house.”

Schofield makes it clear that he believes that the Professor’s comments are a further example of the Government and its advisers contradicting themselves in key policy areas.

He went on to say:
“On the one hand the Government is trying to encourage the uptake of renewable technologies with its proposals for the Feed-in Tariff for the Renewable Heat Incentive, but it is providing no upfront capital help for consumers to install the equipment and is now seriously considering taxing any monies generated. This will inevitably take away a major incentive for renewable technologies and make the Feed-in Tariff very unattractive to consumers.”

No doubt this rift between one of the country’s largest gas boiler manufacturers and a key Government advisor will play out over a long period of time.

Guest Article by Neil Camp