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OT: Consumption and pricing
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All this road pricing mullarkey has got me thinking.
Domestic energy prices have risen hugely over the last couple of years.
Does anyone know what (if any) effect this has had on consumption?
That would give us a remarkably good predictor for what (if any) effect
road pricing would have, IWHT.
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We already pay per mile as there is plenty of tax in the price of petrol.
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Yes, we do. Not only that, but your dear old road user pays in lots
of other ways too. I don't suppose that HMG will reduce the tax
burden on fuel, abandon the excise licence and remove VAT on tyres,
let alone the insidious insurance tax on something we are legally
bound to maintain?
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So where does all this money go then? Eh? Eh?
You should be told.
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Not only but also - if they start charging for the use of motorways
and trunk routes "at times of high loading" (pretty much all the time)
that will lead to far more people than HMG expect diverting onto
smaller roads to save the quid a mile that the M1 would cost them ...
thus taking the bottlenecks back exactly where they were 20 years ago
- in the little towns and villages alongside the motorways.
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When the price of petrol went up recently how many people left their
cars/bikes at home and found alternative methods of getting to work?*
Tim
*Assuming there was an alternative - politicians and tree hugging greens
seem to all live in London with its tubes, buses and trains.
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According to this little gem
a trip from my home to work (30-35 minutes by bike or cage) to arrive at
07:00 by public transport, means I have to start the day before!
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I don't think that the two are comparable. AFAIK there are no fiscal
measures in place to reduce domestic energy consumption. What you pay
for domestic energy is surely a matter of supply and demand. Perhaps
demand has increased and this has pushed up the price.
Road pricing is a very different animal as you are placing a tax on
something that was previously considered to be free with the aim of
reducing usage. Whether or nor it is sucessful will depend on how much
you charge and we have London as a model to gauge its effect. To my
mind when congestion charging was introduced in London, traffic volumes
seemed to drop. This suprised me as I thought a fiver wouldn't be
enough to deter the generally relatively affluent people who drive into
London each day. I thought it would need to be around 25 quid to make a
significant reduction. Since then I've moved away and the charge has
risen so I don't how well it is working now.
I am convinced that if you charge enough it will work. The only
question that remains is can the charge be high enough to be effective
whilst still being politically acceptable?
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Well, you're obviously setting out to prove something in advance
there.
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Funny thing is though, that a fair bit of searching the web, and the combined
talents of UKRM appear to have failed to turn up a definitive answer.
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Hello again all.
I'm a gas man so I've ignored the leccy angle in the following...
There is no definitive answer. Get hold of the document "The Ten Year
Statement" from the gas bods at what was Transco but is now embedded in
National Grid. The latest one shoud be out shortly... it won't really
say much though.
The spot price for gas went silly earlier this year because of (amongst
other things) a fire on an offshore gas storage facility (Rough).
Whilst this certainly did result in some of the I&C sector switching
off or switching to oil alternatives for the few days of high spot
prices, the absolute impact on the domestic sector is unknowable, due
(mostly) to metering frequency. As an entirety it lags by probably a
couple of years, although meaningful sample sizes should have been
collated by now. However, add in to this the complications of having
to correct actual utilisation for actual weather for comparing year on
year changes (i.e. express things in average weather terms, taking
account of the uncertain impacts of global warming), and accounting of
actual population/housing growth (and other demand growth factors), and
you can see it's not a simple bottom-up task.
Top-down approach is to say that "demand must have some elasticity and
therefore yes, there will have been reductions as the price has gone
up", but it's a bit circular so not much help.
The retail (domestic) sector is less exposed to short periods of very
high demand - but all the suppliers are exposed hence the plethora of
retail price increases. The high prices were driven by uncertainty &
jittery traders though more than any tangible supply demand
fundamentals. Gas markets still haven't recovered liquidity that was
lost thanks to Mr. Lay (Enron), and the prior Russian/Ukrainian dispute
and subsequent European hoarding was still fresh in their minds.
High spot prices should turn out to be just for last winter. New
Norwegian imports have started flowing, and the 2nd European
Interconnector is on target for completion. There's lots of good noises
about LNG imports into Teesside, too. All of which means that
wholesale prices should at least level out, and probably begin to
decline. 15 to 20 years hence, prices should be roughly the same (in
real terms).
This is all bread and butter stuff though. The real big question marks
are over the Russian/German relationship (watch out for a row with
Georgia this winter similar to Ukraine - it could eventually be the
Jerrys) and the strength of the "burger eating invasion monkeys"[1]
market, given that so much of theirs and so much of our will be in LNG
ships coming from whereever.
Hope this helps. If you want more it's OTR 10 to 25 grand for a
being quite so commercial.
[1] Alan Davies, QI, recently. Superb!
Angus.
SV650S / NC30 / CBR600RR / CRM250AR (in title but not posession, sob).
IANASS#9 (or I was last time I was here).
I've also trashed an NC30 at Cadwell - do I get anything for that? And
I spotted UKRM T-shirts in my home town of Stratford last summer - fat
c*nt he was - know him?.
! Is this needed?
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Do you think "they" are trying to hide something from us?
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I wouldn't think that domestic energy and road usage are particularly
comparable. Most domestic usage is dictated by the sort of house we
live in, so prices would have to rise *very* significantly, and for a
long time, before we (as a society) changed the types of houses we
built, and lived in. I reckon the elective use of domestic power
(e.g. shall I turn the telly on) is less than 10%.
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I Disagree.
The largest percentage of household energy usage this time of year has got
to be heating.
This is clearly "elective" in that you have the choice to turn the termostat
down and/or improve insulation.
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Power usage by sector in the UK:
Transport: 34%
Domestic: 30%
Industry: 22%
Services: 14%
Transport breaks down like:
Private: 22%
Business: 12%
Domestic breaks down like:
Heating: 21%
Water: 8%
Other: 5%
So cars & heating use about the same amount of energy over the year, and
the DTI claims that the average household could save 30% of both by
reduced & more efficient usage.
Over the last 30 years, the cost-against-wealth of fuel has dropped by more
than half, and the domestic energy usage per household hasn't changed. The
only way of reducing domestic energy consumption is effective mandatory
minimum efficiency standards for houses, and price rationing - first 1200kwh
per person at market rate, everything after that massively taxed with the
money used to fund efficiency grant skemes.
You could do a similar thing with transport.
Not that I think it'll ever happen.
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That said, I've also heard a statistic that goes something like..
"If everyone in the UK changed all their bulbs to engery savers, the impact
on the global energy consumption would be less than the increase in China in
a week" - details from memory but you get the gist.
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I'd say that elective use of personal transport is probably a good
third, if not more. In addition, one can much more easily change the
type of vehicle you use. Even more importantly, timing will have a
more significant impact (compared to the domestic equivalent, Economy
7) - I would expect road pricing to have peak, medium and low tariff
time ranges - this would allow people (and companies) to vary their
travel.
Currently access to the roads suffers from the problems of any other
commodity that is free to the user - it is rationed by queuing (c.f.
communist russia, NHS, etc). Road pricing seems to me a reasonable
way of saying 'look, you can't *all* drive into London on the M4 at
8am in the morning'.
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I did, thank you. I'm not sure that I completely agree with your
analysis, other than for within large cities, mind. Out in the sticks
where I live any sort of usable public transport would be *hugely*
expensive to set up, to the point where it's just not going to happen.
My local shops, Post Office, school, pub and doctor's surgery all closed
years ago. Car use in this area is non-optional.
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Well as far as I am concerned provision of some form of reasonably
attractive public transport that will reduce *some* trips is absolutely
required in areas such as yours. I don't buy the argument that it is all
too expensive - the alternative of never ending congestion is too
expensive. Don't say it is not feasible because there are schemes where
people are doing innovative things to make public transport more
attractive to car owners and those who are sufficiently well off not to
consider the bus as an alternative.
We are going to have to bite the bullet some time so we might as well
start now.
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So, I get stuck with bigger tax bills for the car (please don't suggest
it'll be revenue-neutral), yet still have no effective choice.
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Would be prepared to incur a slightly higher charge if there was a much
better nationwide alternative that would allow people to transfer some
or all of the car trips to public transport?
That is the challenge the legislators and transport providers face.
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