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MSE News: Government minister: 'Gas price hikes show market's working'

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  • MillicentBystander
    MillicentBystander Posts: 3,518 Forumite
    edited 26 March 2013 at 2:31PM
    andymd wrote: »
    So anyone who doesn't share your cynical view of the world must work for an energy company?

    If storage is as much of a no-brainer as you suggest (I'm not actually saying it isn't) then why hasnt anyone built it. Maybe not the energy companies for the reasons you suggest but surely someone else would see the value and build storage and make money out of it.


    I note you haven't denied you derive your income from the energy industry. Is this significant, I wonder?

    PS And why would anyone who isn't Big 6 build storage when the way the UK energy market is set up it just isn't needed/required? The energy suppliers simply pass on the price increases for not having storage facilities at such times to their customers. They have absolutely no incentive to try and drill down their costs. Illogical reasoning.
  • I think we all know that the energy companies buy their gas around a year in advance - now look at this article

    www(dot)reuters(dot)com/article/2012/08/16/markets-britain-gas-power-idUSL6E8JG44520120816

    and tell me, in all honesty, that we aren't being fleeced?

    It's a rigged market with oligopolistic players. The sooner we get proper regulation and uniform pricing, the better I will like it.
  • Bark01
    Bark01 Posts: 882 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    I think we all know that the energy companies buy their gas around a year in advance - now look at this article

    www(dot)reuters(dot)com/article/2012/08/16/markets-britain-gas-power-idUSL6E8JG44520120816

    and tell me, in all honesty, that we aren't being fleeced?

    It's a rigged market with oligopolistic players. The sooner we get proper regulation and uniform pricing, the better I will like it.

    You argue that energy companies buy a year in advance and then complain that we are being fleeced as the spot price is down???

    Energy companies can buy some fuel many years in advance, some a year in advance some at the spot price. Spot price only affect the price if a supplier has high risk strategy of hedging heavily on the day to day prices.

    Wholesale price is also becoming less and less of a factor. Cost of regulation and infrastructure readiness/improvements are the big increasing factors. The costs of ECO and Green Deal compared to CERT/CESP are expected to be add ~10% to a typical bill.
  • cepheus
    cepheus Posts: 20,053 Forumite
    It's doubtful if our prices are as cheap as they could be anyway
    Liebrary: Are Britain's energy companies' charges for domestic gas & electricity really the lowest in Europe?

    What the apologists are rather shy about is the fact that the price difference is due to UK taxes on retail energy being about the lowest in the EU. If you strip out the government taxes - money which doesn't go into the pockets of the energy companies - UK energy prices are about the same as the rest of the EU....While other countries who are dependent on imports can plead that global wholesale price force them to put their retail prices up, the British energy companies have no such excuse.
  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    andymd wrote: »
    If storage is as much of a no-brainer as you suggest (I'm not actually saying it isn't) then why hasnt anyone built it.
    Because the DECC hasn't acted to grant permission for the schemes that have been proposed over recent years. Something that one of the energy company bosses was grumbling about in one of the weekend papers.

    With supplies in storage at about 2 days of use last Thursday and 1.5 days on Sunday we've had:

    Mekaines from Qatar arriving at the Isle of Grain over the weekend.
    Zarga arriving at Milford Haven on Monday
    (that pairs provides twelve hours of usage combined)
    One more Qatari vessel due on Friday
    One due to sail from Trinidad on Saturday

    I don't know about your safety margin tolerance but I rather like to have more than a day and a half of reserves around. And more than a total of 15 days worth in the whole storage system would be useful with electricity generation switching to higher gas usage levels.

    Not retiring lots of coal power generation capacity when there's insufficient gas storage to give a decent safety margin would also be nice for a department that has a reliability of supply obligation.

    At least the Milford Haven terminal was built and the US has large supplies of natural gas from its boom in fracking. And there are some welcome moves to get going on fracking production here, finally.

    For anyone concerned about diversity of supply or low carbon power generation, they might consider EDF as their supplier. Around 60% of its electricity generation is from non-fossil sources and it has recently committed to building new plants to continue providing high capacity and predictably available supply.
  • Dave_save
    Dave_save Posts: 362 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    The market is NOT working. It would only truly work if there was competition and an element of risk. Most of the innovation has been forced on energy suppliers by the government, for which we pay a premium. We have 6 major energy companies playing 'follow the leader' adding their percentage on-cost on to whatever the wholesale market dictates. Nothing changes, and we'll be talking about this for the next 20 years. It's so easy for them, no risk of failure, no attempt to influence wholesale costs by innovation and a constant captive customer base.
  • Pincher
    Pincher Posts: 6,552 Forumite
    1,000 Posts Combo Breaker
    The idea of buying a year in advance is a paper exercise which does not cost you much in inventory cost. As any retailer will tell you, holding stock ties up capital. You need to have security against terrorism, maintenance cost and buy insurance. You physically need land for storage. Its not just filling up weather balloons with gas and tie them to the ground

    A couple of years ago, the spot price went negative briefly, where people holding too much gas was giving you money to take it away. Egg on face time for the storage aficionados.

    On the other hand, starving your enemy by blockading their food, water and other resources are well known tactics in war. The futures market relies on the various delivery paths to work perfectly, which relies on PEACE. If I was a Hitler number two, I would send my U-Boats to cut off the Qatari liquid gas containers, shut off the pipe lines, and listen to the chatter of teeth in Britain.

    If we really !!!!ed off Valdimir Putin, and he turned off the pipe lines, the Cold War could have a brand new meaning.
  • Richie-from-the-Boro
    Richie-from-the-Boro Posts: 6,945 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper
    edited 4 June 2013 at 1:26PM
    Nobody likes the truth, and I mean nobody. As long as this country avoids the inevitable and fails to build nuclear we will forever be at the mercy of primary resources of which we have none. Building toy windmills, pointing little bits of silicon at the sun and putting wiggly worms in the waves won't hack it .. .. if we covered the entire island and its shoreline in them it still would not provide power for the nation. Put the whole worthless 'green' scenario in the long grass till about 2050 then have a~n~other look at the efficacy of UK 'green' energy, it might have improved .. .. but I doubt it. Do I want a nuke power station next to me, aye go on - I've got one 16 miles from here [1969- 1984] but I suppose another won't hurt, I mean its been there for nearly 30 years and done me no harm.

    All options are cost-dis-benefit and need megga taxpayer subsidy, regardless of green / nuclear / gas / coal:

    - nuclear can / will provide for base & peak demand
    - coal & gas could if built provide for base & peak demand
    - coal is the most polluting, and is unlikely ever to make a comeback for that reason
    - green can not now and never ever will ever provide for base & peak demand
    - gas is the most state security risky, one twist of Putin's megalomaniac tap, the lights go out, the heating goes off
    - of the graph's, gas is the decade on decade inexorably rising cost and is the single biggest generator of electricity
    - nuclear,when invented, was supposed to be so cheap that metering it was a pointless and unnecessary cost - yeh right !

    Folks we have an endless water supply and an island of 'clarts' we can survive indefinitely as an island nation, we can feed and clothe our people but we aint got king-coal and can no longer function without energy. The 59 nuclear reactors in France mean they make about 75% of their needs and have economic and energy security, indeed they sell us their surplus leccy. They own our power companies and water companies, their nuclear strategy remains essentially unchanged from day one, why would they change it, they're laughing all the way to the bank and their nation has security. At some point it will be nuclear power or going to war at one level or another against those with this precious resource. Face the future - its a truth no one wants to face - I'd just rather do it now than later.
    Disclaimer : Everything I write on this forum is my opinion. I try to be an even-handed poster and accept that you at times may not agree with these opinions or how I choose to express them, this is not my problem. The Disabled : If years cannot be added to their lives, at least life can be added to their years - Alf Morris - ℜ
  • Dave_C_2
    Dave_C_2 Posts: 1,827 Forumite
    ... And in other news, the government has announced that the rise in crime figures proves that the Police Force is working. :)

    Dave
  • C_Mababejive
    C_Mababejive Posts: 11,668 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    It is working.

    The state controls its chattels by keeping them in poverty.

    How do we do this? give them big mortgages. Their homes then tie them to feudal taxes (council tax) and they then have to consume energy.

    Keep them enslaved by the implicit threat of homelessness,cold and hunger for this will keep them silent and compliant.

    No one is a freeman on the land for we are all chattels of the state.
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
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