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MSE News: Scottish and Southern Energy throws open electricity market
Former_MSE_Helen
Posts: 2,382 Forumite
in Energy
This is the discussion thread for the following MSE News Story:
"SSE is to auction all of its power on the open market in a bid to bring new new suppliers into the energy market ..."
"SSE is to auction all of its power on the open market in a bid to bring new new suppliers into the energy market ..."
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As long as we were all prepared to keep quiet and pay the increases then the utility companys would do nothing about it. They know how difficult things are for the consumers but put profit before anything else. What crap was Cameron spouting about saying we are all in this together. Yea right!!!!0
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SSE shares are down over 1% on this against a backdrop of a rising FTSE.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
"The big six companies currently sell most of the electricity they generate directly to consumers, with only a small amount traded on the wholesale market."
is this correct?
wasnt this whole integrated system broken up at privatisation, so that generators were seperate from supply businesses, were seperate from the transmission business.
presumably these new rules are because ofgem have allowed generators & suppliers to be the same business again.0 -
I think the the generation, transmission and retail businesses are still theoretically separate but there seems to be no restriction on who the generators can sell to - so they primarily sell to their own retail business (supplier) at undisclosed prices."The big six companies currently sell most of the electricity they generate directly to consumers, with only a small amount traded on the wholesale market."
. . . is this correct?
wasnt this whole integrated system broken up at privatisation, so that generators were seperate from supply businesses, were seperate from the transmission business.
By auctioning 100% of generation, the trading price for all buyers (the suppliers) will be at an open-market price for all to see.
As I understand it, prices won't necessarily come down but the market will certainly be more competitive if all generators follow suit and there will be a level playing field for suppliers.
I'm no expert on the energy market but that's my take on the plan. Let's hope the other generators do follow suit.
Warning: In the kingdom of the blind, the one-eyed man is king.
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Hmmm - A question of wait and see I think, but my first thoughts are that huge % of the population are struggling to understand all the little rules of today's market or have given up trying, so a completely new tier of tariffs and rules isn't going to help.
As has already been commented, some of the present retailers have bought into both Power Generation and Distribution.
Whilst each one bought will have a seperate legal identity, the business phrase for this is 'Vertical Integration', and I know from my experience with the paper industry that it spells bad news on prices as profit margins can be moved up and down the chain at will0 -
Tariff complexity is a different issue which Ofgem have consulted about as part of their Retail Market Review.Hmmm - A question of wait and see I think, but my first thoughts are that huge % of the population are struggling to understand all the little rules of today's market or have given up trying, so a completely new tier of tariffs and rules isn't going to help.
My understanding of the effect of 100% auctioning of generation is that it will dismantle this vertical integration. Since suppliers usually buy wholesale energy on longer-term contracts, I'm not sure how the "day ahead" contracts will work for them if they can't hedge, or "gamble", by buying and selling them between themselves.As has already been commented, some of the present retailers have bought into both Power Generation and Distribution.
Whilst each one bought will have a seperate legal identity, the business phrase for this is 'Vertical Integration', . . .Warning: In the kingdom of the blind, the one-eyed man is king.
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This is a clever move by SSE because they know it will have minimal effect (because the article is wrong: technically ALL power is sold on the wholesale market).
It will slightly increase prices, because SSE will no longer be able to control their imbalance positions as accurately.
But hey, you guys asked for it!Says James, in my opinion, there's nothing in this world
Beats a '52 Vincent and a red headed girl0 -
Consumerist wrote: »Since suppliers usually buy wholesale energy on longer-term contracts, I'm not sure how the "day ahead" contracts will work for them if they can't hedge, or "gamble", by buying and selling them between themselves.
It won't make any difference. They can still do financial hedges on top.Says James, in my opinion, there's nothing in this world
Beats a '52 Vincent and a red headed girl0 -
Will the bidding be open to individual home-owners ?. If not, then there may be some leeway in setting-up a co-operative to buy/sell the units of electricity at a profit of not more than 1% to cover admin costs.Never Knowingly Understood.
Member #1 of £1,000 challenge - £13.74/ £1000 (that's 1.374%)
3-6 month EF £0/£3600 (that's 0 days worth)0 -
Will the bidding be open to individual home-owners ?. If not, then there may be some leeway in setting-up a co-operative to buy/sell the units of electricity at a profit of not more than 1% to cover admin costs.
No, only licenced suppliers.Says James, in my opinion, there's nothing in this world
Beats a '52 Vincent and a red headed girl0
This discussion has been closed.
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