Gas price increase in 2022

Energy prices skyrocketed as a result of the perfect storm of unfortunate circumstances. 

- Reduced output from sources such as wind (increasing our reliance on gas).
- Long-term cold weather predictions have exacerbated the situation.
- The UK has little gas storage (9.3 terawatt hours compared to Italy’s 167.9, or Germany’s 151.1), which means we’re especially vulnerable to market swings.
- Geopolitical concerns from Russia have played a role.
- Germany disallowing the Nord Stream 2 gas pipeline.

Gas is the raw fuel used to produce the Heat & or Hot Water at your development. As part of a communal heating network, heat prices are determined by the cost of gas and the system thermal efficiency (gas needed to produce the heat used). Prices will stay stable until April. At this point we aim to source better prices.

Transparency is important to us and rest assured we are looking to reduce prices as soon as we possibly can. Any changes in gas prices will be reflected in the Heat & Hot Water rate on your bills. We are operating at a fixed price until the end of April - we believe it will go down by then.

We are carefully monitoring and tracking the market which at this time is so volatile and unprecedented that we are unable to confirm when prices may change. Nobody can predict exactly what will happen to gas prices through 2022. What we do know is that prices are usually lower in the summer as demand decreases. We are operating on the assumption that this will happen in 2022.

We are faced with unprecedented prices in the gas market. The heat network system in your development that produces the heat and hot water is powered by gas. The heat price reflects how much gas has to be used to generate the heat being used. This is measured by a heat meter at each end point. CEP made advanced purchases of gas for all of 2021 at competitive rates keeping heat prices low and shielding customers from the impact of the recent gas price increases.

All heat networks provide near instant heat/hot water in order to continually distribute heat via hot water pipes around the development. There is always some loss and therefore more gas is used than the total heat measured on all of the heat meters. This is known as the overall system efficiency.

Absolutely not; our contracts limit any profit we can make therefore the unprecedented gas increases do not provide CEP any profit. Indeed we are faced with very difficult circumstances ourselves in having to buy gas at these horrendous levels.

As part of our normal buying strategy in line with the contracts we have to deliver these services we try to buy as much as we can for the following year. As we are only contracted on an annual basis we are unable to buy far into the future. At the point at which we were able to consider purchases for next year, the prices were already rising fast and, at times, some suppliers would not even provide a quote given the volatility in the market.

There are a number of things you can do to reduce your consumption and lower the cost  of your energy bills: 

- Check your thermostat. Reducing temperature settings could help lower consumption.
- Ensure your supply is turned off when you leave your property.
- Take showers instead of baths which will use less hot water.
- Avoid energy wastage by keeping internal doors closed.

Ofgem specify the amount by which gas and electricity suppliers can increase their charges by. This applies to domestic gas and electricity supplies, not communal heating systems which are supplied by a single commercial gas supply. The price cap is usually shown in the media as the average annual cost of energy. The current value is in the region of £1,300 per year and news reports are suggesting the next update in 2022 will see that figure rise to nearly £2,000. This helps to understand the scale of raw fuel increases in general.