At the moment lots of people are starting to realise that a renewable energy tariff isn’t cheaper than any other form of energy.
You would assume that energy created by free resources such as the sun and wind would be cheaper but unfortunately, there is just one price for the cost of electricity.
Greg Jackson explains why renewable energy isn’t cheaper.
Yesterday on Twitter, Greg Jackson, the CEO of Octopus Energy posted a video explaining why the cost of renewable energy is not cheaper than other forms of energy. We agreed that it is “bonkers”. It isn’t something he has kept quiet on as he has been campaigning for quite some time for energy market reform. It is the only way to drive prices down and help make them become more resilient. We need energy independence in the UK and it is possible!!
Octopus has been banging on the door of the government demanding action. They have been running pilot projects to prove that energy market reform is possible. They have shown that their customers will also engage with the process in order to get cheaper energy.
All we can do is hope and put pressure on the government to take action to make the changes needed so that companies like Octopus can help to bring down electricity prices.
Well done Octopus on keeping your customers informed.
Martin Lewis has updated his advice on the October 2022 Price Cap.
For months I have been telling everyone and anyone to take a fixed deal. The answer I usually get is that Martin Lewis said to do nothing.
I really love Martin Lewis and have followed his advice on many occasions but energy tariffs are so specific you have to really consider your own circumstances. Doing nothing may work if you are trying to stay on the cheapest deal at that moment in time BUT if you can see energy prices are continuing to rise, in my mind, it gives reassurance to fix a deal. It has always been my preference.
Martin Lewis, however, does not have a crystal ball and no one could have envisaged that prices would have risen this dramatically!! I have kept warning people to take a fixed if they can and it’s right for them BUT I never imagined we would see gas or electricity reach this height and even considering a price cap where gas could be 15p per kWh is simply mind-blowing.
Martin Lewis’s advice has now changed.
On the 9th of August Martin Lewis’ website added an article which suggested that you could now consider a fixed deal if you can get one that’s 95% or less above the current energy price cap. If you really want that reassurance and you can stretch a little further, he said, even a 100% increase on the current energy price cap figures would be worth considering.
This is quite a jump from DO NOTHING and is a warning that things are about to get a whole lot worse!!!
So how much is Martin Lewis suggesting we fix an energy deal at?
At the moment the energy price cap for electricity is around 28p per kWh and 7.5p per kWh for gas. So if you can get a fixed deal for around 56p per kWh for electricity and 15p per kWh gas then it is worth taking as you’ll get a rate that won’t go up any further for 12 months.
The issue is that these fixed deals are slim on the ground! I can’t quite believe a year ago you could fix your gas for 3p per kWh and electricity for 16p per kWh. Now the new fixed rates are simply unaffordable! It’s like singing up to a meal deal package when you can’t afford to buy more than one meal a month. It is simply crazy BUT it is where we are at.
Can you switch deals if energy prices become cheaper?
Whatever you decide to do remember with Octopus you can switch tariffs at any time and there is no penalty. So if prices drop you can simply take a new deal or go onto the Octopus flexible tariff.
Octopus Energy is calling for the government to consider greater assistance.
Octopus Energy is constantly trying to make the energy market better for customers. Today, Greg Jackson, the CEO of Octopus Energy was on BBC Radio 4, Best of Today, setting out how he thinks the government should step in and take action to help ease the energy crisis;
So Martin Lewis has been on his sunlounger for the last week but I spotted that he has leapt into action today as the Cornwall Insight has realised its latest figures.
It isn’t good news when you see Martin leaping about as it means something isn’t going as planned and it’s not! The Cornwall Insight has today released figures which are way beyond their previous predictions.
The Cornwall Insight had previously predicted around a 78% price cap increase in October 2022 plus an additional increase of around 4% in January 2023. They now predict an 81% price increase in October 2022 and an additional price increase of a whopping 19% in January 2023. So that a total of 100% energy price cap increase in the winter of 2022.
We need government action on energy prices.
The government isn’t as fast to get off the sun lounger as Martin. They have remained silent which I find staggering! A tax cut won’t fix this they need to take action NOW.
I am no expert but Octopus Energy has been calling for them to uncouple the price of electricity from gas. With electricity prices continuing to rise well into the winter they need to take action and that action has to be swift!
I rarely make political statements but our government is lost in action! They need to make changes now and they need to offer support even if it’s just with advice NOW!! They can’t remain silent when millions of people will struggle to even consider turning on the oven to cook a hot meal
Here’s my guess on how much we could pay per kWh on the energy price cap.
I think would see electricity increase from 28p a kWh to anywhere around 44p per kWh in October 2022. Then staggering it will get closer to 50p per kWh in January 2023.
Gas is currently 7p ish per kWh on the energy price cap and I guess that will be around 14p per kWh in October 2022 and 16p per kWh in January 2023.
Now, these are guesses but less than a year ago they would have sounded like the rantings of a mad woman!!
There’s no getting away from the fact that energy prices have skyrocketed. Even if you are the savviest homeowner there’s just no escaping the price hikes of 2022.
There are still ways, however, to save money on your energy bill. You could just switch off and use nothing. I know for many this seems like the only option. The standing charge has increased and even without using any energy your energy bill may already to starting to mount up BUT with an Octopus smart tariff you can try and hustle a cheaper price per kWh.
Will an Octopus smart tariff help to reduce my energy bill?
Simply switching to an Octopus smart tariff won’t necessarily save you money. At the moment the daytime rate on all Octopus smart tariffs is above the price you would pay on the energy price cap. So why would anyone opt to pay more?
Well, I am on a smart tariff designed for Electric Vehicle drivers. My daytime rate, on the Intelligent Octopus tariff, is above the energy price cap BUT off-peak between 11.30 pm and 5.30 am I can charge my EV for just 7.5p a kWh. I can also shift a lot of my hungrier appliances to come on at night during my off-peak period. Now the hustle here is that by combining the two price periods I can bring my average price down quite considerably. So my overall rate per kWh per day is well below the price cap.
Octopus Smart tariffs if you don’t own an EV.
If you don’t own an EV not all is lost as Octopus Agile is a time-of-use tariff that is designed specifically for this hustle. The peak rate has increased in the last two weeks from 35p per kWh to 55p per kWh which might at first glance rule it out of the equation. However, you only pay the peak rate price of 55p per kWh if you knowingly use energy at a specific time. Now it is more of a gamble with Octopus Agile as you bet on the fact that prices will drop at some point during the day. You get notified the day before and can plan your energy use based on hourly pricing. Once again what you have to focus on is your average energy price. If you can use more energy when the price drops your average will come down.
The Octopus Agile is fixed for 12 months at a cap of 55p per kWh.
The energy price cap rises in October 2022.
For quite some time the advice has been to do nothing. To just stay on the price cap as it is the cheapest deal. The issue now is that prices are increasing and the energy price cap is going to be amended every 3 months. This means that the stability of knowing your energy rates for the next 6 months will change. They could either keep bounding upwards or they could drop. Now reviewing them every 3 months does mean that if prices drop this will be passed on quicker to consumers but it also works the other way when prices rise.
We all need to change how we use energy.
If anything good is to come out of this energy crisis I hope it’s that we have all stopped to consider how we can use less energy. Millions of people will be doing this in the coming months from pure need rather than desire. It is a miserable state of affairs. It highlights why we need energy security in the UK. We need to both produce and manage our energy better so we are less on other countries for our gas supply.
So it’s been a busy month for Octopus Energy tariffs. Prices have been changing regularly over the last few months but in July we saw some tariffs changing 4 times over the course of 4 weeks.
If you have a fixed tariff your energy deal is safe but if you are looking around for a new Octopus Energy deal then you will find that tariffs are frequently changing and while you consider what to do things have moved on. If they were going down, this wouldn’t be a problem, but there’s just one way they are going, and that is up!
Which Octopus tariffs have changed?
Only the Flexible Octopus tariff has remained the same. The rest have all increased. The smart tariffs such as Octopus Agile and the Octopus Electric tracker tariffs increased to a 55p per kWh cap for electricity. This is quite a jump as they previously had a cap of 35p per kWh.
The Octopus Flexible tariff remains the same as it is reviewed every 6 months and the next is due in around 3 weeks’ time. We will then know how much this will increase. The new pricing comes into effect on the 1st October 2022. Some speculate that it will be as much as 78% with a further increase in January 2022.
Why are energy prices still rising?
Wholesale energy prices started to rise at the end of August 2021. There was a steady rise and the explanation was that coming out of lockdown after covid and the rise in demand forced the price of energy up. Then when Russia invaded Ukraine they skyrocketed even further.
It is hoped that prices will come down BUT personally I can’t see this happening for some time. Wholesale prices need to come down so much that it won’t happen overnight. Plus Russia is restricting gas supplies and EU countries are all bidding to get their hands on gas ready for winter.
This is a really personal choice. Traditional Octopus fixed deals will be higher than the Standard Variable price. So in many cases, it is the cheapest option, even though it is really high. The issue is that as prices as based on the past 6 months so if prices start to drop this tariff may be the last to see a price reduction.
I personally can’t see prices dropping soon but if you are on the Octopus Flexible you need to keep an eye on the energy prices. If you check back I keep my website updated so you’ll have an idea if it’s the right time to jump ship and grab an Octopus fixed deal at a cheaper rate.
Octopus Smart Tariffs and Energy hustling.
There are lots of Octopus smart tariffs where you can duck and dive to try and shift energy use to try and save money on your energy bill. Take a look at my main Octopus tariffs page.
If you don’t have a smart meter you can still switch to an Octopus smart tariff. I would suggest checking out the Octopus Tracker tariff. It is capped at 55p per kWh for electricity and 16p per kWh for gas. Now, this is the most you will pay but prices change daily in response to wholesale energy prices. So prices drop your rate per kWh drops instantly as well.
There’s no getting away from it the only way to save money on your energy bill at the moment is to use less or to use energy when it’s cheaper by grabbing an Octopus smart tariff.
Keep an eye on my website as I keep prices updated on a daily basis.
Yesterday, 18th July 2022, the government published information on REMA, Review of Electricity Market Arrangements in the UK.
I was so pleased to read the document today. This is something I have been following as Greg Jackson, the CEO of Octopus Energy has been pushing for energy reform in the UK for the last couple of years.
What will REMA Do?
Well, it should be quite straightforward. Renewable energy is cheap to produce. We have lots of wind and sun for free BUT the price of renewable energy is linked to wholesale gas and fossil fuel prices. So if the price of gas is high so is the price of renewables. This isn’t good for the UK. We need to be able to produce cheap green energy and not be held at random by foreign powers such as Russia.
When we have an abundant supply of wind the saving isn’t passed on to the customer unless, of course, you are with Octopus. Octopus has been piloting lots of new tariffs that reward customers for using energy off-peak. They have also been paying customers to turn off at peak times.
REMA the Review of Energy Market Arrangements has dropped on the government website yesterday. https://t.co/XekcbwMcNi@OctopusEnergy@NationalGridESO did a trial last year called the Big Turn Down (i think). Where we got paid for turning off at peak times.
I took part in a trial last year with Octopus called the Big Turn Down. It was a collaboration between Octopus Energy and the National Grid. I could get paid to turn off my energy when demand was high but did I turn off? Of course, I did along with thousands of other Octopus customers. Who doesn’t want to reduce their energy bill?
Using this data Octopus has been pushing for reform. It was a myth in the energy industry that customers would not change their behaviour. Energy suppliers thought of customers as passive in their energy use BUT they were wrong!!
So now the government through REMA is looking at the possibility of uncoupling the price of renewable energy from gas and fossil fuel prices. They are also looking at the time of use tariffs rewarding people who change when they use energy. By doing this they hope to prevent possible blackouts. It will also help us on the road to NetZero and cheaper green energy tariffs.
Is there such a thing as a cheap Octopus Energy tariff?
One of the first questions most people ask is what is the cheapest energy tariff available right now? I am with Octopus Energy and working out which is the cheapest Octopus Energy tariff does take some thinking.
It is a good question. Everyone wants to try and get their energy bills down but in the last 12 months so much has happened. When Russia invaded Ukraine the prices of wholesale energy jumped much higher than anyone could have predicted. This has had a knock-on effect on domestic energy tariffs available in the UK. So finding a “cheap” energy deal is no longer that straightforward.
Energy Prices over the last 12 months.
Just 12 months ago you could sign up for a 24-month fixed Octopus tariff. It would have cost around 16p a kWh for electricity and 3p per kWh for gas. Today, 18th July 2022, if your looking to switch to Octopus Energy the cheapest traditional Octopus Energy fixed tariff for electricity is 60.55p per kWh and an eye-watering 18.11p per kWh for gas. Both tariffs are now 12 months contracts.
According to Ofgem the average UK home with 2.4 people uses 8 kWh of electricity and 33 kWh of gas each day. So just a year ago the average home would have expected to pay £1.28 for electricity and 0.99p for gas. Totalling £2.27 a day. This is based on the figures above, 16p per kWh of electricity and 3p per kWh of gas.
Today, 18th July 2022, the Octopus traditional fixed tariff will cost £4.88 per day for electricity and £5.98 for gas. This is based on 60.55p per kWh for electricity and 18.11p per kWh for gas. I have used the Ofgem average UK home consumption figures again. The total is £10.86 a day compare to £2.27 a day a year ago!
To make matters worse this doesn’t even take into account the increased standing charge! The standing charge for electricity has almost doubled. It was around 25p a day, regardless of how much energy you used and it is now around 50p per day. So even if you keep everything switched off if you have an electricity supply to your home you will be paying around 50p a day or £15 a month just for electricity.
Once you have completed your switch to Octopus there is a cheaper fixed called the Loyal Octopus tariff. This is currently 49.88p per kWh for electricity with a standing charge of 47.88p per day and 15.69p per kWh for gas with a standing charge of 27.22p per day.
Be aware there is more than one type of fixed tariff with Octopus Energy!
The traditional Octopus fixed tariff quoted above is just one of the fixed tariffs available. . All domestic energy suppliers have a traditional fixed-rate BUT Octopus also has smart tariffs. The Octopus smart tariffs are also fixed for 12 months. For me, this is one of the areas that makes Octopus stand out from the crowd.
The smart tariffs take a little more thought but they can be a great way of bringing the average price you pay per kWh down. They are also great for the planet! So even after the energy crisis is over they can continue to help us on the road to NetZero. It really is a win, win and Octopus is leading the way!
We all managed to quickly adapt to working at home and using Zoom. Maybe, we should all try to make changes to help the planets well as your pocket. Smart tariffs can do both!
What does Martin Lewis have to say?
Martin Lewis at the start of the energy crisis advised consumers to stay on the energy price cap. The price cap is fixed for 6 months. Martin said if your fixed deal comes to an end do nothing. Unfortunately, as wholesale energy prices have continued to rise fixing your tariff may have been the better option. The energy price cap has skyrocketed!
Martin Lewis could never have predicted wholesale energy prices would rise so dramatically! He is now taking a different approach and is advising customers to decide for themselves if taking a fixed is the best option. I have never seen him lost for words before BUT no one knows what will happen. Taking a crazy fixed price may seem like a good deal in 6 months’ time BUT who can afford to pay such high prices?
The October energy price cap is now predicted to rise by a staggering 65%. I am a big fan of Martin Lewis and like everyone else I read his recommendations but at the moment he is saying there is very little you can do to avoid your energy bill going up.
October 2022 Octopus Energy price cap rises.
The standard variable tariff, known as the Octopus Flexible tariff, is capped by the energy price cap. Octopus took the decision to make sure that they were below this price. So the Octopus Flexible tariff is £50 below the April energy price cap. This makes it one of the cheapest tariffs available.
In October 2022 energy price cap looks set to rise by around 65%. Electricity could then increase from around 27p a kWh to 38p a kWh. Gas which is currently capped at around 7p per kWh could rise to around 12p per kWh in October.
It is impossible to quote the exact figures as the 6 months period the energy price cap is based on hasn’t finished. It is also difficult to know how the 65% will be split if indeed it is 65%.
The price increase isn’t split evenly between gas and electricity. One may go up more than the other. We will just have to wait and see.
I am estimating a very rough 38p per kWh for electricity and 12p per kWh for gas come October 2022 (as a very rough guide) BUT it is important to note that there is a predicted further 4% increase in January 2023. 😩 My gut feeling is that electricity will be over 40p per kWh.
Deciding if to stick with the Octopus Flexible tariff or any standard variable tariff versus taking out a new fixed tariff is a matter of personal choice. You have to take into account your own financial situation and energy needs.
Octopus Energy changing the way we consume energy.
If all traditional fixed deals are now above the predicted October 2022 energy price cap you may think it is best to just stick with that but thinking outside the box will save you money. Octopus are great at giving customers great ways to save money and help the planet.
Could changing your behaviour reduce your home energy bill?
The simple answer is yes. The most basic way to save money is to just switch off your energy. By using no energy you won’t get slapped with a massive bill but there are other ways you can reduce your costs too.
If you have a family, as I do, just wild camping in your home isn’t going to be an option. The kids need a warm meal and clothes need to be washed. So what can you do?
The first thing I would suggest if you are an Octopus Energy customer or are thinking of switching to Octopus Energy is a time-of-use tariff known as smart tariffs. You will need a smart meter for most smart tariffs but not all. You can still switch to some really great electric off-peak tariffs or tariffs which change half hourly or daily based on wholesale energy prices.
I can hear so many people scream but I don’t own an EV and I haven’t got solar panels. Being able to afford lots of energy-saving devices is great but if you are just getting by then it is not an option. However, with Octopus you can still save money on a smart tariff just by changing your behaviour. Plus there are still Octopus smart tariffs available even without a smart meter.
Octopus Smart tariffs without an EV or solar panels.
For those without an EV look at the Octopus Agile tariff. It is a 12-month fixed tariff which is capped at 35p per kWh for electricity. On the Agile tariff, prices are announced a day ahead. Your energy price will change every 30 minutes throughout the day. If you plan ahead you can work out when would be the cheapest time to prepare your meal or turn on the washing machine. It takes some dedication but if you invest a few pounds in some timers or if your washing machine or white goods have delay functions built-in they really can save you a lot of money.
If you hustle and change when and how you use electricity then you can bring the price per kWh down to below the price cap. I manage to use around 57% of my energy off-peak. I pay 7.5p per kWh off-peak on the intelligent tariff and 35p per kWh peak. By load shifting when I use energy my average price per kWh drops to around 16p per kWh! This is well below the energy price cap.
Octopus Smart tariffs without a smart meter.
Octopus Tracker tariff.
If you don’t have a smart meter the Octopus Energy Tracker tariff is currently on version 3. The tariff tracks wholesale energy prices and each day the price you pay for either gas or electricity changes. This may seem a little risky BUT at the moment version 3 of the Octopus Tracker tariff is capped at 11p per kWh for gas and 40p per kWh has electricity. Remember the cap is the most you will pay per kWh. Yes, prices may rise so it’s always on the cap but they may not. If they drop then the average price you pay for electricity or gas will be below the capped target price.
I have no idea when they will change to version 4 of the Octopus tracker tariff but at the moment it is capped at 11p which is very attractive. Just switch off the gas as much as you can in the summer and keep the higher rate for the winter. By the time you come to use more gas the energy price cap will probably be above 11p per kWh anyway! So it really is well worth fixing a 12 months deal on the tracker tariff now while it is still available.
Here is an example of the gas tracker prices for the last 7 days. The figures are based on the prices for South Wales. They may vary slightly based on your location.
Octopus Gas Tracker Tariff.
Date.
Price per kWh.
18/05/24
4.57p
17/05/24
4.61p
16/05/24
4.52p
15/05/24
4.48p
14/05/24
4.41p
13/05/24
4.63p
12/05/24
4.63p
Ideas how you can save money on your energy bill.
As well as looking at your energy deal you could look at how you use energy. If you have to put the oven on maybe batch cook. Instead of cooking one meal cook 3 and freeze them. I have been doing this for the last few weeks and it really does bring your energy bill down.
You can also consider cooking meals in a slow cooker. A slow cooker doesn’t have to be fancy. Mine cost around £20 from Amazon and produces really cheap affordable meals with every little energy. I make stews or pasta sauces in the slow cooker and then keep them refrigerated for a few days. Then the oven is used even less in the week. In the current energy crisis, this is fantastic! The oven really burns through lots of kWh!
I can’t quite believe we have reached this position in the cost of living crisis but we have. The £400 the government will pay to all energy users in the winter should have helped BUT in reality when they decided on the £400 the energy price capped looked like it would rise by 54% it is now set to rise by 65%. The £400 will be eaten up by the extra increase!! So most people will have to find ways to cook a warm meal and keep clean and warm without getting into a massive amount of debt.
I am seriously looking at an electric blanket for the winter. They are cheap to run and if you don’t want to heat the whole house will defiantly keep your energy bill down.
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