MSE News: Energy prices: analysts predict the year ahead

Mynewt

Hmm seems i'm not allowed to post links so please copy paste and remove the spaces.

galba

Mynewt wrote: »

Which would you rather? Energy supplier's make a profit or having no power one day out of seven on a regualr basis? As dramatic as it sounds it's a very real possibility. (you can see preparations have been made for this already by looking at your energy bills, usually on the front page you will see a letter in a small black rectangle. this corresponds with a schedule that has been drafted for a disconnection rota if/when power levels are insufficient for demand)

Interesting. This 'Block' code first appeared on my SP bills in August 2007.

Is there anywhere a key to what the letter codes mean ?

mech_2

Mynewt wrote: »

Wholesale energy costs while decreasing are still higher than year's previous, taking statistics aside for one moment

If you just want to believe they are higher without actually making a comparison then fine. But that's not a fact, it's a belief.

(as i'm sure we agree you can pretty much find a statistic to prove anything nowadays)

Go on then. Find some numbers that support what you say.

and use common sense we are now drilling for oil in palces in year's past we turned down as uneconomical or too expensive to exploit, Gas fields are being drained dry and infact some are now used to store carbon dioxide. With shortages of supplies demand will increase and with it prices, in thsi repsect the recession is a good thing has it has curbed demand.

Yes UK gas fields are in decline, but that doesn't mean the whole world is running out of gas. The world is awash with gas and Britain is now connected to these markets via new LNG terminals. That's why UK gas wholesale prices are as low as they are and why American gas prices and European prices have become more tightly coupled. Most of the rest of the world doesn't use gas to the degree Europe does, so I don't really see wholesale prices rising any time soon even if the economy recovers. Not unless people start burning it in road vehicles in large quantities. Oil appears to be an irrelevance at the moment as natural gas prices seem to have decoupled from oil. And as a result so have electricity prices.

With regards to profits for shareholders that maybe the case for SSE, expenditure is for the accounting year not for what they require 1 year from now, or two years from now. That expenditure sits in profit coffers until such time as it has been used for whatever development.

Well no, because this year they'll be spending this years money on investment planned in previous years and so on.

Borrowing on its own will not be sufficient for example. The company I work for has raised a credit line of approximately 7 billion euros, exenditure in the next 3 years is likely to outstrip this and we're not planning on using this line of credit unless something goes disasterously wrong, simply because using credit costs more money.

Well I don't know anything about that, obviously. Though I have my doubts as to whether this is a true understanding of the situation. I doubt paying corporation tax on profits is cheaper than a 3 year loan. Nor do I see the sense in paying to borrow money and then leaving it sitting around doing nothing.

Anyway I'm not taking this seriously. It seems obvious to me you're just explaining away the prospect of inflated profit levels because for some reason you can't accept that retail prices are likely to fall for the foreseeable future rather than rise. Hence the various shifting arguments and fear-mongering.

With regards to the OFGem link here you go herehappy reading its quite long: h t t p : / / www .ofgem. gov . uk / Pages / MoreInformation.aspx?docid=2&refer=Markets / WhlMkts / Discovery

No wonder I couldn't find the bill breakdown hidden in a document on another topic. You made it sound as if it was somewhere obvious.

I do hope you're not treating that document as a prediction rather than an exploration of worst case scenarios. It would explain your outlook if you did.

Mynewt

Yes we have LNG Terminals and YEs we have a pipeline connecting us with Gas from Europe. The pipeline will morethanlikely get shut again this year as the ukraine yet again struggles to pay its energybill.

LNG shipments help to ease the effect of this but don't solve it, coupled with the limited storage capability we have should this happen the costs to suppliers will increase as supply again becomes limited. Opening a credit line costs nothing (apart from time) using that credit comes at a cost.

The prospect of over-inflated profit levels is very subjective to you and me millions (and in somecases) billions of profit sounds like a lot of money. Especially as the tendancy is to think just of the supplier, you don't take into consideration the entire picture.

The profit is made not just by the supplier arm of the company, but by the group, so that's all their operations, distribution, generation, data centres, meter operations, property services etc and so forth so a few hundred million profit spread in so many area's isn't so large after all, and as i mentioned before a company making a proft will only boost the economy.

mech_2

Mynewt wrote: »

Yes we have LNG Terminals and YEs we have a pipeline connecting us with Gas from Europe. The pipeline will morethanlikely get shut again this year as the ukraine yet again struggles to pay its energybill.

The pipelines don't get shut down when Ukraine enters dispute with Russia because the UK generally doesn't get its gas from Russia. It might affect near-term prices, but last time this didn't have a large effect. You wouldn't know because you don't like figures.

LNG shipments help to ease the effect of this but don't solve it, coupled with the limited storage capability we have should this happen the costs to suppliers will increase as supply again becomes limited. Opening a credit line costs nothing (apart from time) using that credit comes at a cost.

That's my point. It costs nothing until you need it and then it's (what?) 7%? Corporation tax is something like 30%, (plus more tax heaped onto North Sea gas production) and there are shareholders to please too ("What? 30% profit margin? How come our dividend hasn't gone up?").

I note that your figures that can "prove anything" are still not in evidence.

The prospect of over-inflated profit levels is very subjective to you and me millions (and in somecases) billions of profit sounds like a lot of money. Especially as the tendancy is to think just of the supplier, you don't take into consideration the entire picture.

We were talking about supplier profit levels. I'm sticking to the point, are you?

Producers have less control over their prices. So if wholesale prices are low a supplier can only expect to get the price they want if the customer can't get their energy cheaper elsewhere. In other words, the supply crunch that this investment is designed to prevent has to happen first. Epic fail.

The profit is made not just by the supplier arm of the company, but by the group, so that's all their operations, distribution, generation, data centres, meter operations, property services etc and so forth so a few hundred million profit spread in so many area's isn't so large after all,

So 7 billion of credit won't come close to paying for investment, but suddenly a few hundred million will? I think your dislike of figures is tripping you up again.

and as i mentioned before a company making a proft will only boost the economy.

How can it boost the economy if they're just sitting on money waiting for something to spend it on while consumers could otherwise circulate it?

Mynewt

I began writing a response but quickly came to the realisation it would be pointless. The only people seemingly continuing with this discussion now wish to do nothing more than bicker and argue semantics - anyone whom could truly benefit in all likelehood already have in earlier posts. While there is definately more that can be said it would only fall on deaf ears.

I'm also compeltley amazed by the schoolyard antics all too prevalent on a consumer forumn such as this. Its one thing to disagree with someone but an entirely different matter to then attempt to belittle or just downright insult them (too many posts to provide as examples but spend 5 minutes looking and you'll see plenty of evidence).

Gemukpc

milliemonster wrote: »

oh that's just great then, gives me chance to put some money aside for when they do rise in 12 months and 1 days time

Thanks for the laugh!!! Badly needed lololol:rotfl: