it's going to go up - but by how much?

[Martin]

if we look at the way energy prices have risen recently, it strongly suggests that all will go on up in price - the question is "how much?"
I've heard conservative estimates of 10% per annum - does anyone have any insights?

[2steps]

can't help but my electricity bill is getting to the point where I'm worrying about affording it we have a token meter so if it runs out and I have no money, we'll have no electric. we're careful with what we use but are still spending £10+ some weeks

[nathanbriggs]

I consult to the ODPM on electricity prices. The increase next year (2007) will be between 10-30% depending on everything from winter harshness to gas stability of supply from Russia and Norway.

Beyond that estimates vary from 5-15% p.a. for next 5 years. After that you might as well just guess.

PS I am one of the very pessimistic predicting 30% next year and 15% after that - but then I would (however before you say it Windsave payback is based on middle road predictions of 5% pa)

[Stonehead]

if we look at the way energy prices have risen recently, it strongly suggests that all will go on up in price - the question is "how much?"
I've heard conservative estimates of 10% per annum - does anyone have any insights?

Have a look at:

When will fuel bills drop?

Or for even more delusion try

Communication on DTI Fossil Fuel Price Assumptions

What's amazing about the DTI predictions is that both central ground predictions involve real cuts in the price of both crude oil and gas between now and 2020! Only in the high scenario do we see a rise in oil and gas prices.

Personally, I'd prefer to go with Hubbert's Peak. He correctly predicted US oil production would peak in the early 1970s (it did, in 1971) and then a peak in global production, now narrowed down to between 2007 and 2012. Politicians and the media ignore it, oil companies don't!

On that basis, expect short-term volatility (up and down for a year or three) then rapidly rising prices as the reality starts to make itself known.

Allow for volatility in certain countries (Russia, Ukraine, all the Persian Gulf states, Kazakhstan and its neighbours, Nigeria and Venezuela in particular), plus ever rising demand in China and India, plus the US and it's insatiable greed for resources, and you have a fair certainty of a big mess within the next 10-15 years at the outside.

The other downside is that an oil shortage will probably lead to even more environmental damage as the US leads the rush to extract ever more coal and extract oil from shale sands and the like.

Bump, bump, crash...

[Joe]

if we look at the way energy prices have risen recently, it strongly suggests that all will go on up in price - the question is "how much?"
I've heard conservative estimates of 10% per annum - does anyone have any insights?

Hi Selfsufficient-ish people - this is my first post so please go easy on me :)

I think it will prove to be very difficult to predict exactly how much energy prices will go up; there are just so many variables to try to resolve. However, there are some strong trends in the UK energy sector that give us an indication of where things are going in the future.

UKCS (UK Continental Shelf) gas production is currently declining very rapidly, so new, large scale infrastructure needs to be built to accomodate new imports. The costs of constructing the Langeled pipeline, the upgrade to the Belgian interconnector and the proposed LNG terminals at Milford haven, as well as any other new projects slated for the future will need be absorbed by future supply contracts. This implies an additional overhead being applied to wholesale gas prices - and therefore more expensive gas and electricity - for the foreseeable future

However, the story doesn't end there. This is a slide from a presentation delivered by Steven Fawkes, Head of Energy Solutions, Npower at the recent North West Energy Forum annual conference (apologies for the size of the image!):


We can see that about a quarter to third of the UK's existing coal-fired generating capacity is due for closure by 2012 as part of the large plant directive to reduce CO2 emissions (coal plants have to either opt-in and clean up their emissions & improve efficiency or opt-out and close).

Also, the decommissioning schedule for the UK's fleet of nuclear reactors gradually erodes the remaining capacity, as does the end of oil-fired generation.

Looking further out, we need to replace about 50% of our generating capacity (some 40GW) by 2020 if we are to maintain "business as usual" - this is an absolutely enormous task that implies investment on a massive scale. This in turn suggests that robust electricity prices will be sustained for at least least the next 15 years - probably longer - as generators seek to claw back their investments.

As for global oil production forecasts, I'm inclined to agree with Stonehead that there are likely to be volatile times ahead. It is certainly difficult to imagine how the growth-dependent global economy can reconcile itself to diminishing supplies of net energy.

My hope is that we can emerge from the ensuing chaos with a less materialistic, more localised, community-oriented and sustainable society.

[Wombat]

My hope is that we can emerge from the ensuing chaos with a less materialistic, more localised, community-oriented and sustainable society.

Me too! Well said Joe!

Nev

[nathanbriggs]

Welcome joe and thanks for such an informed comment, any chance of the full slide show if its public domain??

(Nice to know other pundits agree with me but it would be interesting to know that if his crisis point is 2012 when he thinks the prices will have to go up to prevent it)

Thanks in advance

[Joe]

Sorry Nathan, didn't see your post until just now. The whole slideshow is available here: http://www.envirolinknorthwest.co.uk/do ... atest).ppt

sorry - you'll have to copy & paste it into your browser window - the forum software doesn't like brackets inside URL tags