MSE News: Guest Comment: The problem with energy firms

bigbloke45

A._Badger wrote: »

However bad things are now - and I agree they are very, very bad - the answer is most certainly not to have one company in any position of market dominance.

Anyone who suffered under Post Office Telephones, British Rail and the rest of the state monopolies will remember why.

What is needed is proper competition and ruthless examination of the business models by a regulator with brains and teeth - quite unlike the current one, in other words!

You've overlooked the most inefficient poor value for money "utility" that is still nationalised and shows all of the worst faults still - The NHS!

rogerblack

flexrider wrote: »

Do you think with all these price rises the only way now is to completey go off grid and use other types of scources like solar power panels?

Not in the near term.
http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php - for example.

A 1kw solar panel will produce around 1kWh/day average in the winter.
For very minimal cooking and refrigeration needs, you're looking at more like 5kWh per day needed.
You'll need a 5kW solar panel, and batteries that can store - ideally - a bit more than this.
The very cheapest solar panels are around 60-70p/watt - probably 5 grand is not an unreasonable guess if you could get the panels at this price, and fit them yourself along with the inverters and charge monitors.
Then add 5kWh of batteries that will probably set you back 2 grand every 5-10 years, and it gets very uneconomic.

The batteries alone just about match the electricity bills at current energy prices.
Admittedly, you have lots of 'free' power in the summer - but unless you can use it during the summer days - it's not actually saving you any money, and including it on the sums would be unrealistic.

Count_Dante

This discussion is very interesting indeed. I'm currently switching my gas from E.On to Ebico and it is taking forever, due to there being a private gas pipe on my street which apparently adds to the already stupid delay. This industry is a disaster area.

On a different matter, I note that the cost of trying to increase wind power in this country will be astronomical (http://www.theregister.co.uk/2011/06/14/national_grid_2020). The increases in energy costs above incomes we currently have will go on for years and years, and the energy firms are only partly to blame. I'm rather surprised this is not more widely understood.

Ben84

magyar wrote: »

Ben, you make some very good points above. I have long said that there is one very, very simple thing that Ofgem could do which would do away with a lot of this at a stroke: define the tariff structures that the companies have to use.

Most of us would need nothing more than 'low', 'medium' and 'high'. For each one Ofgem requires the first [x] kWh to be charged at a one rate and then [y] kWh to be charged at a different rate. That way, people can compare 'medium' tariffs, for example, and know it's a like for like comparison.

Simplifying it all would be great, but it's maybe not in the interest of the industry. They want us to believe there's a lot of different products and choices in the energy market and the widely different billing methods and marketing styles keep us caught up in this idea, while simplification of it all would help take us back to the idea gas and electric is all the same stuff.

magyar wrote: »

This is similar to what was done on trains and - whilst I agree with you it's still far from simple - it's a lot more straightforward now that we have just 'advance', 'off-peak' and 'peak' tickets.

I would also scrap 'green' tariffs (they're at best misleading and at worst downright disingenuous).

What is interesting though is that the mobile phone market is no less confusing than the electricity market, but somehow people don't seem to mind so much. I think it must be because even though we nearly all have a mobile phone, we still think of them as luxury items.

The mobile phone market can be bad and Tesco mobile were particularly frustrating at one point in time. When I looked at their tariffs a while ago I just couldn't believe how complicated it was for the sake of being complicated. The idea was you buy something like £25 of credit for £15, which I think is supposed to look like good value to us, but really makes it harder to answer what a minute costs in real money and means we have to mess around with this imaginary value that everything is converted in to on it's way to being turned in to actual minutes. Pointless and confusing. I think they have given up on this marketing system, but it was a good example of complex for the sake of it.

I wouldn't say I mind it less, it's still annoying, but my mobile phone costs are a fraction of my energy costs so maybe that's why I worry less about it all.

grahamc2003

Hard to know where to jump in on this thread, so I'll just start on whether privatisation was a good thing or not. I suppose one way of analysing that is just looking at the number of man hours pa required to get electricity into our homes, and making an assumption that those man hours are related to cost and efficiency (the aims of deregulation afaiia).

I expect that within the industry, there has been a drop in the number of people in the 'core' areas (like power station staff), and a rise in the number of people in those non-core areas which materialised purely from the deregulated (and what a misnomer that is!) industry. Examples are staff involved in switching supplier for example.

The report someone referenced seemed to assure us that overall, there are less manhours involved now that previously, but I have trouble accepting that, with my feeling being that there are many more now emplyed in those non-core jobs intrduced artificially by privatisation (albeit, low skilled jobs) than core jobs lost. Any core business efficiencies have been more than offset by a multitude of effort required on non-core support processes which simply didn't exist before, imo. (and even worse, the implementation of some of those processes - e.g. sales - has been, and still is, pretty unsavoury imo).


That is for the industry itself. But looking at the effort expended by customers, and we see probably an additional millions of manhours spent looking into and switching suppliers - before privatisation, zero manhours were spend on this. It hasn't always been my view, but I'm now of the mind that privatisation of the industry has been a very retrograde step, with customers confused, and those most needy getting disadvantaged the most with the highest tariffs, and the most on-the-ball having to expend a lot of effort to keep the better tariffs.

backfoot

grahamc2003 wrote: »

That is for the industry itself. But looking at the effort expended by customers, and we see probably an additional millions of manhours spent looking into and switching suppliers - before privatisation, zero manhours were spend on this. It hasn't always been my view, but I'm now of the mind that privatisation of the industry has been a very retrograde step, with customers confused, and those most needy getting disadvantaged the most with the highest tariffs, and the most on-the-ball having to expend a lot of effort to keep the better tariffs.

Oh so right.:T I also have given it an open mind but it clearly hasn't worked.

Just look at one example of the confusion caused on one tariff from Scottish Power. (Energy Reward).

There are conflicting and confusing communications from SP, so that customers aren't at all clear about the best timing of any switch/transfer to a new product. That being, only one of the minefields along with strenous debates about fixed/capped/variable, termination fees or not.

I keep asking myself how has all this happened? None of this rubbish existed before. Not only is it all rubbish,the companies themselves can't administer it. (none of them).:eek:

Bobjob_2

Grahamc2003 is absolutely right about the huge inefficiencies of this sham "competitive market". The money, time and effort wasted in switching between tariffs that are almost identical is a complete scandal. I can feel change in the wind, however, on the tariff front. I know Ofgem and Consumer focus have been taking very seriously the thousands of complaints they have received about the 400+ tariffs that clutter the marketplace. The question is, do they have the bottle to take on the evil empires of Centrica, ScottishPower etc? But this won't be enough: we need deep structural change that breaks up each of these near-monopolies, as well as radical action to end the immoral overcharging of people who have never swiched.

freddy27

They ALL lie through their teeth. Telling you in one breath how wonderful and cheap they are. Totally untrue, do not believe a word they say. All this nonsence over this price per micro watt or is it micro therm, or kilo meter. WHY can they not just give a price for whatever one uses.

I changed supplier last November. Still paying my previous one in February, and the new supplier from November. In May I am told that I owe £160 having paid what they wanted. Where does that leave me, threatened with the heavy mob. Having had many problems after the first change and little communication, I decided on a different supplier. Not yet completed. Have told all that I shall visit the Ombudsman, I can only hope!

Engineer56

There is an easy way to stop the energy rip off.

The actual Energy Consumption of all users (or dwelling if applicable) should be made available to all of the energy companies when a user requests a quotation and the companies should provide a quote based upon that data.

The reason it is so easy for the companies to rip us off is that they give us inaccurate quotations based upon fictional data (they say typical) as most users do not give them the accurate usage details to base their quotations on.

It is easy for the companies to then give the user a saving based upon inaccurate data and then 6 months later give the user a demand that they increase their payments once they have got them.

Engineer56

Pincher

Have you considered how having your OWN house, and your OWN car, even your OWN Sony PS3 means that you are continuously paying taxes not just in the council tax sense, but in the VAT on petrol, VAT on the plumbing expenses sense as well.


Strictly speaking, if your brother is a plumber, and he fitted a boiler for you, and you paid him in potatoes, he is supposed to pay VAT for the equivalent value. So if you paid him £120 worth of potatoes,
he is supposed to give £20 to the Revenue.


Now, let us say a group of say a thousand people, disenfranchised and priced out of the property market, but not without tradesmen skills manage to acquire a piece of land. They decide to build an underground energy efficient communal living space (for two thousand people, so children can be raised). It will have rainwater reservoir, wind farm, solar farm, vegetable farm, pig shed etc. Some people will go out to work and pay tax on their externally sourced income, but the majority will be engaged in maintaining the building, growning food, looking after children, cleaning, etc. In return, they get food, accomodation, clothing, simple health care etc.


Instead of everyone having a TV, PS3, a car, you have these things in the community, and they are shared. Note that instead of 500 broadband contracts at £10 each a month, so £5,000 a month, you can have one business broadband connection with Wi-Max which could cost say £200 a month. Living communally underground, heating is reduced to a minimum with a vastly reduced heating bill. Instead of 500 cars, which are used 5% of the time, you can have a small collection of MPVs and Transits which are far better utilised for the insurance, MOT and road tax paid.


Communism may become so attractive that it becomes the norm.


Unfortunately, the loss of Tax revenue will be so catastrophic, that the HMRC will declare this an illegal tax avoidance scheme, evict the residents, and sell it for redevelopment as an apartment block.


Another threat comes from the eneygy companies, who will regard these attempts at energy independence as a threat to their existence.