Energy Prices this winter: Good idea to plan ahead?

[Bam Bam]

I'm thinking ahead to the coming (European) winter and what the energy prices might be like.

From what I understand it will take 8 months for oil and gas to get flowing from the gulf again AFTER the end of the blockage there. So if somehow Trump and the Iranians agreed with each other Energy prices would start to drop next January.

So energy prices will be much higher this winter than they were last winter.

Have I got that right?

Is anyone else thinking that having a heat pump and a good amount of solar panels and batteries would be a good idea for this coming winter?

 

[JohnV6]

That is how I understand it

 

[Ian Key]

I managed to fix my energy prices for 12 months in March ending my previous contract which expired in November early so hopefully prices will have returned to a sensible level by then.

But getting back to the question of would I install a heat pump, batteries and solar panels? No unless the cost of purchasing and installation drops. Being realistic at my age with my health conditions I don't think I'll be in this house long enough to get the money back.

 

[Gomev]

I'm thinking ahead to the coming (European) winter and what the energy prices might be like.

From what I understand it will take 8 months for oil and gas to get flowing from the gulf again AFTER the end of the blockage there. So if somehow Trump and the Iranians agreed with each other Energy prices would start to drop next January.

So energy prices will be much higher this winter than they were last winter.

Have I got that right?

Is anyone else thinking that having a heat pump and a good amount of solar panels and batteries would be a good idea for this coming winter?

Thankfully the UK gets very little of it's gas from the middle east, so supplies shouldn't be an issue. However the wholesale cost could be a problem.
The UK gets its gas from:

• UK production, mainly from the UK Continental Shelf in the North Sea;
• pipeline imports, mostly from Norway;
• liquefied natural gas, or LNG, shipped in by tanker, mainly from the United States and other global suppliers.

In 2024, domestic production supplied about 50% of UK gas demand, with the remaining half met by imports.
Norway supplied 76% of UK gas imports in 2024, and LNG accounted for 25% of imports. Of that LNG, 68% came from the United States, 8% from Qatar and 7% from Trinidad and Tobago.

 

[Bam Bam]

Thankfully the UK gets very little of it's gas from the middle east, so supplies shouldn't be an issue. However the wholesale cost could be a problem.

Indeed, we shouldn't go short of gas in the UK, but LNG is priced on a global basis.

Europe relies on LNG imports because Norway can't supply all of Europe.

So if LNG prices go up other countries will offer Norway more for their gas and the price will go up.

If we had struck a special deal with Norway which guaranteed that we would get a certain amount at a set price then we would be fine. Briony Worthington suggested that last year. If only!

 

[Bam Bam]

Gas and oil prices also vary somewhat with one another as they are substitutes for some purposes.

 

[Gomev]

Indeed, we shouldn't go short of gas in the UK, but LNG is priced on a global basis.

Europe relies on LNG imports because Norway can't supply all of Europe.

So if LNG prices go up other countries will offer Norway more for their gas and the price will go up.

If we had struck a special deal with Norway which guaranteed that we would get a certain amount at a set price then we would be fine. Briony Worthington suggested that last year. If only!

Well it doesn't really matter what anyone wants or suggests, It may as well have been you or me that suggests we do a fixed price deal with Norway as that is never going to happen, it's not the way the market works.
All gas is sold on a global market where prices are set by international supply and demand so no-one is going to be trying to bribe Norway by offering higher prices and pushing their prices up.
We also need to distinguish between Natural Gas and LNG.
Between our own production and Imports from Norway that covers approx 97% of our Gas needs with Natural Gas. Weirdly though, go figure, we actually exported 40% of our own production !!!!, so net figure is about 76%. The rest is supplied mostly by the US as LNG.
Only about 1% of our LNG came from the middle east, Qatar last year.
So as said, Hormuz closure does not affect supply, just price.

 

[johnb80]

Is anyone else thinking that having a heat pump and a good amount of solar panels and batteries would be a good idea for this coming winter?

I have all of the above and I monitor it using Home assistant so my system can make intelligent decisions on energy use. Below is a summary of my thoughts and findings in no particular order:-

1) Heatpump is unlikely to save you money, when the cost of electricity is high it just cannot compete with gas. For example today my gas price is 6.2p kWh, if I factor in boiler efficiency of 90% the true cost of heat in my home from gas is 6.89p. The heatpump has a COP of 2.5 to 4.2 or thereabouts dependent on model, outside air temp and flow temp required. Suffice to say mine runs at about 2.8 when the outside air temp is below 10 deg C. So with peak rate energy cost of 29.8p using the COP of 2.8 each KWh in my home costs 10.65p almost double what gas would cost. This cost can of course be mitigated by solar and batteries but running a heatpump from batteries has to be done carefully, the eat through kWh.

2) A better way IMHO is to use air to air air conditioning units, they still have similar COP ratings BUT you're only heating the rooms you need, they respond very quick and you get the benefit of cooling in summer.

3) Batteries are a great way to reduce energy costs, my average electricity cost currently is 3.49p kWh due to charging from Intelligent Octopus GO, I export all of the solar I generate.

I have the best of all worlds in my setup and the way it tends to run is when it's really cold and there's no sun (little solar) the gas boiler will run to heat the house. Overnight during the off peak time the air-water heatpump runs to keep the house warm. Early morning air to air heat pumps run in the bedroom and kitchen and then later just the office air to air unit. Late afternoon the gas boiler starts up to take us through the evening if don't have a lot of battery capacity spare. The air to air units average around 500w each to keep a room nice and warm, well within my battery storage and inverter supply capacity. Cost of units I purchased from well know auction houses, my Mitsubishi Aircon units were circa £500 each for 5kW units, installation cost is circa £150, the air-water unit is a Mitsubishi Ecodan unit, bought used with a sensor removed, the unit cost me £900 for a 14kW Ecodan, a further £40 for the sensor, I self installed it because nobody would work with me plumbing into my system with the gas boiler still in play, it really wasn't an issue but there are many plumbers / heatpump experts that have a really blinkered approach to gas and electricity working together. Obviously if you do the DIY approach you don't qualify for the government grant for heatpumps. Before installing the air-water heatpump I experimented by running my gas boiler with a flow temperature of 35 degC to see if sufficient heating of the rooms would occur without the upheaval of changing radiators and it all proved to fine, I run my ECODAN at 40 degC flow temperature and get decent efficiencies.
It's an interesting situation to research and plan, youre certainly ahead of the game starting now, good luck and do keep us posted.

 

[Bam Bam]

I have all of the above and I monitor it using Home assistant so my system can make intelligent decisions on energy use. Below is a summary of my thoughts and findings in no particular order:-

Thanks John - useful to others.

We are fairly ahead of the game already, but I'm always considering adding to our existing system.

1) Heatpump is unlikely to save you money, when the cost of electricity is high it just cannot compete with gas. For example today my gas price is 6.2p kWh, if I factor in boiler efficiency of 90% the true cost of heat in my home from gas is 6.89p. The heatpump has a COP of 2.5 to 4.2 or thereabouts dependent on model, outside air temp and flow temp required. Suffice to say mine runs at about 2.8 when the outside air temp is below 10 deg C. So with peak rate energy cost of 29.8p using the COP of 2.8 each KWh in my home costs 10.65p almost double what gas would cost. This cost can of course be mitigated by solar and batteries but running a heatpump from batteries has to be done carefully, the eat through kWh.

Our Air-Water heat pump averaged 4.75 COP over the winter and I would have thought our 35 y/o basic gas boiler would have been 80% efficient at best.

It seemed to drop down to 3.6 on the coldest days, but was high 4's most of the time. That is around 1/6th of the gas usage.

Any extra solar and battery usage for heat pump heating is going to be cheaper than the peak-time grid prices, making the heat pump much cheaper to run largely because it uses so much less energy.

2) A better way IMHO is to use air to air air conditioning units, they still have similar COP ratings BUT you're only heating the rooms you need, they respond very quick and you get the benefit of cooling in summer.

A good option for those for whom the wet-system replacement is difficult.

Downside is that it doesn't do hot water.

3) Batteries are a great way to reduce energy costs, my average electricity cost currently is 3.49p kWh due to charging from Intelligent Octopus GO, I export all of the solar I generate.

Indeed, if there is a surplus of solar power the cost of using the electricity is then the export rate.

I have the best of all worlds in my setup and the way it tends to run is when it's really cold and there's no sun (little solar) the gas boiler will run to heat the house.

Very clever!

Having a DIY/hybrid system does mean you can't get the grant, though, as you note.

It's an interesting situation to research and plan, youre certainly ahead of the game starting now, good luck and do keep us posted.

We've already got heat pump, solar and a single large battery (9.5kWh so ok but not as much as some).

However our solar is East and West facing so great in the Summer but terrible from mid-Nov to mid-Feb, which is exactly when the heating is most needed.

A bit more panel-age and battery capacity would be very useful for those cold but sunny winter days.

The problem for us is that we would need a second consumer unit in the garage and some rewiring to add another solar inverter. All the electrical works add significantly to the cost and that means it is not good economically (though it would be good environmentally) unless energy prices go very high.