The latest Energy Matters PDF from npower. This covers: understanding energy prices, new gas power stations, renewable energy projects and looking at the ups and downs of energy prices...

1. energymatters
Understanding
energy prices
Every day we’re reminded by the media about
the current economic difficulties, but it’s not
always 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 going
on 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 20
This is based on the independent NERA report published in June 2010 and covers all suppliers. The average breakdown of
bills is based on annual average consumption figures.
Now turn over to find out more about how we’re
investing to secure energy supplies for the future.

2. It’s predicted that the UK will soon have the this happen. To do this in a way that remains
largest ‘energy gap’ in Europe, as around a third affordable for our customers and maintains
of the country’s power stations close over the the UK’s business competitiveness, we need to
next few years. Even though we’re all doing more invest in a variety of new technologies, including
to save energy at home and in businesses, the renewables, gas, and new nuclear power.
demand for energy continues to increase. At the
same time, the UK has committed to radically Only then can we be prepared for whatever the
reducing 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 both
produce energy and supply it to our customers, If you’d like to learn more about our commitment
so 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.

3. …building new gas power stations…
Staythorpe
A major new gas power station is in the final stages
of 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 economy
We’re investing more than £700 million
in Staythorpe
…and renewable energy too
Gwynt y Môr Offshore Wind Farm
We’re investing in one of the largest offshore wind
farms 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 farm
We’re investing more than
£1.6 billion at Gwynt y Môr

4. 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 smooth
Prices 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.
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