Posts Tagged ‘Kilowatt hour’

Gas and electricity prices: How are they calculated?

April 27, 2011 Leave a comment

The BBC have today published an article that provides slightly more information than normal, as to how our Gas and Electricity Prices are calculated and why they rise.

The message that the article is attempting to convey, is that our energy prices are based on market prices, not just from today or yesterday, but a range of prices over the past days, weeks, months and even years. The reason for doing this is to mitigate the risk that they could potentially face.

As an example, take today. An energy supplier will not purchase all it requires the day before, or even on the day. The reason for not doing so – the volume will not be achievable and prices may be high. It is a HIGH RISK strategy, that no energy company or will take. Instead, they spread their risk over time.

So the example in this article shows that the gas price in July 2008 was 100p/th, for delivery in the fourth quarter 2010. However, in spring 2010, it was below 40p/th. The point here being, that energy companies would have purchased some of the higher priced gas to cover their position. Therefore, this price is factored into the overall costing that we now see today. If the purchase prices are high, then ultimately, the energy companies will have to raise their prices.

Something else to consider, that this article doesn’t mention, are the transmission costs. These too affect the retail price.

How to use less electricity – Why save electricity?

April 27, 2011 Leave a comment

Burning fossil fuels to produce electricity releases carbon emissions, which in turn are linked to climate change.

Using less electricity will mean fewer damaging emissions are created each time you turn on a light, boil your kettle or charge your mobile phone.

The great news is that saving electricity will reduce your electricity bills, and as the price of electricity is expected to continue to rise there’s never been a better incentive to save electricity.

Start saving electricity

There’s lots you can do to start saving energy. As well as the household tips listed in this article, you can also invest in more energy-efficient household goods. If you want to go straight to the heart of the problem, consider generating your own electricity or switching to a green electricity tariff.

But it’s not all about grand gestures. Smaller changes, such as unplugging your mobile phone charger once it is charged, may only save a few pence from your electricity bill, but can have a huge impact on the environment if we all get in the habit of doing it.

Measuring electricity consumption

Electricity consumption is often measured in kilowatt hours, or kWh for short. An electrical item rated at 1000W switched on for 1 hour uses 1kWh of energy (1000W = 1kW).

  • A 100W light bulb, on for 1 hour, uses 0.1 kWh of electricity.
  • A 60W light bulb, on for 1 hour, uses 0.06 kWh of electricity.
  • A 60W light bulb, on for 2 hours, uses 0.12 kWh of electricity.

Measuring electricity costs

Electricity suppliers sometimes call each kWh of electricity ‘one unit of electricity’. They have a charge for each kWh (or each unit) – this is currently around 13 pence.

So, having a 100W light bulb on for one hour uses 0.1 kWh of electricity – 1.3 pence. With many household bulbs, and indeed many electrical appliances, being on for several hours a day, it’s easy to see how electricity costs can add up.

Most suppliers also have a daily standing charge for being connected to their electricity supply, before adding their charge per unit used.

Article by:- Which? Consumer Magazine
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