energymattersUnderstandingenergy pricesEvery day we’re reminded by the media aboutthe current economic difficulties, but it’s notalways easy to understand WHY prices are Do you know...going up. That’s why we’ve put together this what makes up your bill?newsletter, to try and explain what’s goingon behind the headlines. The cost of energy includes much more than just the price we pay for your electricity and gas. Take a look“Higher unit rates don’t at the simple diagram below.have to mean higher bills,we’re here to help.” What makes up the average gas bill?Kevin Miles CEO npower Retail 5% VAT -1% Profit • Change the way you pay We’ll give you a discount if you pay by 16% Costs Direct Debit throughout the year – quite Operational simply because it’s cheaper for us to e.g. running costs 44% Costs collect your payments and we can pass 11% Wholesale the savings on to you. Find out about Other Costs e.g. metering Direct Debit please call 0845 0770 171 • ay for what you use, say no P 21% to estimates Delivery to your home 4% Government Environmental There are around 26 million households Contribution in Britain, and getting around all of the ones we supply to read meters isn’t easy. So if you give us regular meter reads, it What makes up the average electricity bill? will help to make sure you pay just the right amount. We also have an online 4% 5% Profit Meter Read Reminder service to help you VAT say goodbye to estimated bills. To leave a 16% Costs meter reading call 0800 028 4361 you’ll Operational 10% Other Costs need your account number to hand. 16%to Delivery e.g. metering • ontact us for energy efficiency advice C A ll the major energy suppliers have to your home 8% Government advise their customers about reducing Environmental Contribution their use of energy, and at npower our dedicated specialists are committed to 41% Costs Wholesale helping you do exactly that. For energy efficiency advice call 0800 02 22 20This is based on the independent NERA report published in June 2010 and covers all suppliers. The average breakdown ofbills is based on annual average consumption figures.Now turn over to find out more about how we’reinvesting to secure energy supplies for the future.
It’s predicted that the UK will soon have the this happen. To do this in a way that remainslargest ‘energy gap’ in Europe, as around a third affordable for our customers and maintainsof the country’s power stations close over the the UK’s business competitiveness, we need tonext few years. Even though we’re all doing more invest in a variety of new technologies, includingto save energy at home and in businesses, the renewables, gas, and new nuclear power.demand for energy continues to increase. At thesame time, the UK has committed to radically Only then can we be prepared for whatever thereducing emissions of greenhouse gases. future may throw at us, and provide the best possible service to you, our customers.As an integrated energy company, we bothproduce energy and supply it to our customers, If you’d like to learn more about our commitmentso we have a big part to play in making all to future investment for UK energy please visit npower.com Did you know... Did you know... Did you know... ...We have over 460 wind ...When fully operational our ...Every year we run education turbines helping to power newest gas power station at programmes for schools all over homes all over the UK. Staythorpe has the generating the UK and our power stations capacity to produce enough work closely with local schools electricity to power around and community groups to help 2.8 million homes. them learn more about how electricity is made.
…building new gas power stations…StaythorpeA major new gas power station is in the final stagesof construction at Staythorpe in Nottinghamshire. Four generating units capable of producing enough electricity to power around 2.8 million UK homes Reductions in average annual CO2 emissions by up to 7.5 million tonnes compared to an existing coal-fired power station producing the same amount of electricity Long-term benefits for the local economy which include around 80 permanent jobs at the station and lasting investment in the local economyWe’re investing more than £700 millionin Staythorpe…and renewable energy tooGwynt y Môr Offshore Wind FarmWe’re investing in one of the largest offshore windfarms in the world off the coast of North Wales. Due to be fully operational in 2014 Average annual energy generation will be enough for around 400,000 UK homes Major boost to North Wales economy, with the community continuing to benefit throughout the operational life of the wind farmWe’re investing more than£1.6 billion at Gwynt y Môr
The ups and downs of energy prices This graph shows wholesale gas prices, petrol prices and npower’s gas prices from January 2007 to October 2010. 350 350 To stop retail energy prices from going up 300 and down constantly, like wholesale prices, 300 energy suppliers look ahead and smoothPrices for Jan 2007 are indexed at 100 out the difference in costs. 350 250 350 250 300 300 200 200 250 250 150 150 200 200 100 150 150 100 100 100 50 50 50 50 0 0 0 Jan Mar May Jul Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr May Jul Aug Oct Nov Dec Feb Mar May Jun Jul Sep Oct 0 Jan Mar May Jul Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr May Jul Aug Oct Nov Dec Feb Mar May Jun Jul Sep Oct Jan Mar May07JulJul 07 07 07Dec Feb08Apr Aug Oct DecOct 09 090909 Jul AugMayNov09 Aug Oct 10 10 Jun JulFeb 10 10 10Jun Jul Sep Oct 07 07 07 07 07 07 07 08 08 08 08 08 08 08 08 09 Aug Feb Apr Feb 09 09 0909 Jul 10 09 Mar Nov 10 10 Oct 09 Jan Mar May Aug 07 Dec Feb Apr Jun Jun 08 09 09 DecMay 09 09 Oct 10 Dec Feb 10 May Dec Sep Mar May 07 07 Aug Oct 08 08 Oct Apr 10 10 10 10 07 07 07 070707 07 07 07 0808 08 08 08 08 08 08 09 0909 09 09 0909 09 10 10 10 10 10 10 10 10 10 10 07 07 07 07 07 08 08 08 08 09 09 09 09 09 09 10 10 09 09 10 10 Crude oil Petrol Crude oil retail QCC gas npower Petrol Wholesale gas cost for year ahead npower retail QCC gas Wholesale gas cost for year ahead The relationship between wholesale and retail Energy suppliers may not pass on wholesale energy prices is complex. As a supplier we cost increases immediately and falling buy gas and electricity in advance of when it’s wholesale prices may not immediately result delivered to you, our customer. in bill reductions. The red line on the graph above, shows the We’ve also included petrol and oil prices in amount paid by an average npower gas the graph to show how closely they are linked. customer paying by quarterly cash/cheque Petrol companies are able to instantly increase (QCC). As you can see wholesale energy prices or decrease prices in response to oil prices. are extremely volatile, because they’re tradable commodities and are therefore subject to global influences. npm8440/11.10