Author Topic: Peoples Energy: any experiences and/or knowledge of this supplier please?  (Read 42151 times)

ian

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #250 on: 23 December, 2021, 06:35:45 pm »
Ultimately that's the problem with many, if not all, privatisations. We sold the bits that could make the profits, guaranteed them with government money, and secured them against any potential losses or liabilities.

It would have been cheaper for us all if the government didn't bother with the charade and handed out the cash in brown envelopes.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #251 on: 23 December, 2021, 06:39:17 pm »
<snip>Seems to me that the only honest justification for privatisation is profit.</snip>

Well duh.

So you mean all the bullshit about competition bringing innovation, choice and lower prices due to dynamic market-based competition is a load of fertiliser derived from a large male bovine?  I am shocked. 

Or maybe not ...

It did.....right up to the point where it didn't.   There's a theory that this was because of Govt intervention (price cap) rather than leaving a truly free market.

I worked in utilities not long after privatisation and they were overweight with staff and costs and massively inefficient so I don't believe nationalisation is the way.   Bear in mind the market opened to competition in the late 90s and it has taken a black swan event for a large chunk of the market to collapse on one go.   Let's see what we get in the way of energy policy out of this Government.

Obviously this is where I make my living so some of my opinions may be based on career protection.   Junior needs shoes, you know.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #252 on: 23 December, 2021, 06:42:28 pm »
Has anyone ever priced up the cost of every single person in the country spending a small part of every day wondering if they're on the best energy tariff?

Kim

  • Timelord
    • Fediverse
Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #253 on: 23 December, 2021, 06:43:45 pm »
Has anyone ever priced up the cost of every single person in the country spending a small part of every day wondering if they're on the best energy tariff?

Or indeed, failing to do so.

rogerzilla

  • When n+1 gets out of hand
Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #254 on: 23 December, 2021, 06:44:34 pm »
Hardly a black swan event: they must have realised demand would pick up again after being very depressed due to the pandemic.  They could have bought very cheap futures then, when industry was shut down.
Hard work sometimes pays off in the end, but laziness ALWAYS pays off NOW.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #255 on: 23 December, 2021, 07:13:40 pm »
Isn't part of maintenance stopping nearby trees getting too GBFO?

Not their land to manage.
The fire breaks are convenient places to run power lines so they'll have either wayleave or easements for gaining access and having the kit there but nothing else.

See also when they put it under roads...

It may be different up north but I know a guy based in the Midlands whose full time job is juggling chainsaws to ensure that trees don't take out power lines.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #256 on: 23 December, 2021, 07:18:11 pm »
Hardly a black swan event: they must have realised demand would pick up again after being very depressed due to the pandemic.  They could have bought very cheap futures then, when industry was shut down.

Prices rising by a factor of 8 is not a black swan event ?

A lot of independent suppliers could not access the wholesale market as credit is very difficult to come by.  A lot of business suppliers were overhedged during Summer 20 and were double hit when their customers shut down and they had to sell their hedges back at low levels.  It works both ways and is not as simple as is being made out by some ministers.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #257 on: 23 December, 2021, 07:27:35 pm »
I saw some wag on LinkedIn say that it’s as simple as buying out the money calls without realising that :-

The amount of cash you have to post is huge for a cash strapped business.

Market volatility makes option premiums very high.

There is no OTC options market.

Of course the regulator and the business secretary also don’t get this.

ian

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #258 on: 23 December, 2021, 07:31:58 pm »
But that's the essence of markets – outlying events are a certainty, you gamble against their probability.

There's a huge moral hazard in creating pseudo-markets for services where the business can walk away once offering those services becomes unprofitable.

Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #259 on: 23 December, 2021, 08:04:39 pm »
The bizarre thing to my mind is that when water and sewerage were privatised, they were done in a different way. I'm wondering why a different ideology was applied to them – why we have no "consumer choice" in water?
Riding a concrete path through the nebulous and chaotic future.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #260 on: 23 December, 2021, 08:06:11 pm »
Isn't part of maintenance stopping nearby trees getting too GBFO?

Not their land to manage.
The fire breaks are convenient places to run power lines so they'll have either wayleave or easements for gaining access and having the kit there but nothing else.

See also when they put it under roads...

It may be different up north but I know a guy based in the Midlands whose full time job is juggling chainsaws to ensure that trees don't take out power lines.
I've had a few trees in my garden trimmed by SSE. They were quite close to a minor power line. And getting a bit too big anyway (leylandii).

But must be a lot of work arranging to do the job. ie figuring out who the landowners are and how to contact them. Then some may refuse permission for whatever reasons. Plus environmental impact assessments, ie not cutting trees in the nesting season.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #261 on: 23 December, 2021, 08:30:28 pm »
The bizarre thing to my mind is that when water and sewerage were privatised, they were done in a different way. I'm wondering why a different ideology was applied to them – why we have no "consumer choice" in water?

Privatisation and competition in power and gas were about 10 years apart but the former made way for the latter.  There is competition in water if you are a business consumer.  I think domestic is coming.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #262 on: 23 December, 2021, 08:42:53 pm »
But that's the essence of markets – outlying events are a certainty, you gamble against their probability.

There's a huge moral hazard in creating pseudo-markets for services where the business can walk away once offering those services becomes unprofitable.

This is the biggest move I have ever seen in over 20 years, although the forward market dumped 12% this afternoon.

The margin calls going between trading parties and the exchanges are in the billions.  This is now a problem on such a huge scale there is a chance of a failure the size of the banking crisis.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #263 on: 23 December, 2021, 08:44:55 pm »
Privatisation and competition in power and gas were about 10 years apart but the former made way for the latter.  There is competition in water if you are a business consumer.  I think domestic is coming.

I genuinely shuddered reading that last sentence.

Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #264 on: 23 December, 2021, 08:51:46 pm »
Privatisation and competition in power and gas were about 10 years apart but the former made way for the latter.  There is competition in water if you are a business consumer.  I think domestic is coming.

I genuinely shuddered reading that last sentence.
All those well boring and exploration firms that might lose their markets with the (potential) decline of oil and gas, can have a new market drilling for water in every other garden once the water cos go bust!
Riding a concrete path through the nebulous and chaotic future.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #265 on: 23 December, 2021, 08:56:05 pm »
Privatisation and competition in power and gas were about 10 years apart but the former made way for the latter.  There is competition in water if you are a business consumer.  I think domestic is coming.

I don’t see the point in water competition.  It’s one of my lowest household costs but there’s 2 of us and a teenager who has to be made to shower.

There’s pretty big regional differentials in pricing.  My first job out of university was in a call centre for a water company.  It was eye opening.

I genuinely shuddered reading that last sentence.
All those well boring and exploration firms that might lose their markets with the (potential) decline of oil and gas, can have a new market drilling for water in every other garden once the water cos go bust!

ian

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #266 on: 23 December, 2021, 09:25:42 pm »
But that's the essence of markets – outlying events are a certainty, you gamble against their probability.

There's a huge moral hazard in creating pseudo-markets for services where the business can walk away once offering those services becomes unprofitable.

This is the biggest move I have ever seen in over 20 years, although the forward market dumped 12% this afternoon.

The margin calls going between trading parties and the exchanges are in the billions.  This is now a problem on such a huge scale there is a chance of a failure the size of the banking crisis.

Well, indeed, but that's the ratchet in the moral hazard. They keep betting with what is effectively someone else's money because they're too big and important to be allowed to fail. I'm sure some of these businesses made profits over the years.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #267 on: 23 December, 2021, 09:54:56 pm »
The fundamental issue is overlaying essential infrastructure with the profit motive.  If a business can simply walk away from it's debt whether it has been managed well or it's been stripped by venture capitalists the underlying issue is how does the essential infrastructure survive?

Profit is a piss poor motive when failure can have such a dramatic and wide-reaching impact.  The real issue for me though with gas, electricity, water and even BT is that the open market is essentially an entirely false construct designed purely and simply to make greedy people even richer.

Too many unaccountable risk takers.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #268 on: 23 December, 2021, 10:34:08 pm »
The fundamental issue is overlaying essential infrastructure with the profit motive.  If a business can simply walk away from it's debt whether it has been managed well or it's been stripped by venture capitalists the underlying issue is how does the essential infrastructure survive?

Profit is a piss poor motive when failure can have such a dramatic and wide-reaching impact.  The real issue for me though with gas, electricity, water and even BT is that the open market is essentially an entirely false construct designed purely and simply to make greedy people even richer.

Too many unaccountable risk takers.

I will repeat my point that it’s the suppliers that have gone bust and they are just resellers.  It is not their job to invest in infrastructure.  This bit of the market is definitely broken.  There was margin in supply but there has not been for several years.   You can see this in the performance of the challenger suppliers, Centrica’s share price or the fact that both SSE and npower sold their supply books.

The pipes and wires are now pretty much owned by National Grid or pension funds.  The amount of return they can make was regulated and linked to RPI.  They get fines from the regulator for failures of service.

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #269 on: 24 December, 2021, 08:35:19 am »
Is it therefore the lack of regulation of the infrastructure providers/owners that is another problem (unrelated to the current crop of failures) ?  Lack of aspiration or long term planning from the government ?

If so, then I guess that's been a problem ever since privatisation in the 80s, so, for once, possibly, we can't just point our fingers at the current Swirl of Incompetence.
Rust never sleeps

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #270 on: 24 December, 2021, 09:05:29 am »
Is it therefore the lack of regulation of the infrastructure providers/owners that is another problem (unrelated to the current crop of failures) ?  Lack of aspiration or long term planning from the government ?

If so, then I guess that's been a problem ever since privatisation in the 80s, so, for once, possibly, we can't just point our fingers at the current Swirl of Incompetence.

You need to break it down to 4 key areas and Ofgem licensed activities :-

Supply - This is where we have seen the recent collapses.   Question mark of whether this is regulatory tampering, high wholesale prices or a bit of both.
Generation - Privately owned assets with a range of owners.   This sector underpeformed for many years as wholesale prices were terribly low.   A lot of assets were sold, mothballed or demolished leaving the Grid without enough spare margin.   It's fair to focus on this but there has also been a huge build out of renewables during this time which is a big success story.   The upshot is on low wind/sun days we struggle to balance the system.   Market conditions currently support a lot more roll out of unsubsidised renewables which we should see in the next 2 years.
Distribution - Local Networks.   Heavily regulated with spending and charging controls.   Generally owned by pension fund type investors as returns are low but steady like water companies.
Transmission - National Grid wires.   Again heavily regulated.   National Grid is quoted and seems to generate steady returns.   The general view is that they do their job quite well.

So it depends what you mean by infrastructure.   I think a lot of the issues we are having are down to out over reliance on imported gas.   This could have been reduced with more generation build out and not allowing Centrica to close the Rough storage field.   And this is where the markets haven't provided.   For example a pension fund, when building a wind farm is looking at a 25yr financial model with a view to achieving the returns they need to make the investment.   They would prefer to do this in a regulatory environment that is secure.   Politicians, though, think in 4/5 yr cycles and everything else is down to the next person.   Long term energy policy has been sadly lacking for an awfully long time.

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #271 on: 24 December, 2021, 09:28:01 am »
One remaining story after the Secretary of State criticised 'irresponsibly run' suppliers :-

https://www.bloomberg.com/news/articles/2021-12-23/u-k-government-repeats-bulb-energy-mistake-by-failing-to-hedge

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #272 on: 24 December, 2021, 09:31:17 am »
Thank you for all of that.

One silver lining to the current surge in energy prices is surely that renewables become even more attractive as an investment vehicle. Yes ?   Or does the high price need to be baked in for many years to make that a thing.
Rust never sleeps

felstedrider

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #273 on: 24 December, 2021, 09:43:45 am »
Thank you for all of that.

One silver lining to the current surge in energy prices is surely that renewables become even more attractive as an investment vehicle. Yes ?   Or does the high price need to be baked in for many years to make that a thing.

The surge in prices is concentrated at the front.   As an example Jan was 50p, next Summer 25p and the following Winter 27p.   The forward market then drops to a bit over 10p.   But, overall, it's way higher than it was so shovel ready projects that had been parked are now suddenly running full speed.   If built these projects will be generating Summer 23.

There is now a global problem with the supply of solar panels, though.   I think at any one time you either have the money, the site or the correct power price but getting all three at the same time is troublesome.

ian

Re: Peoples Energy: any experiences and/or knowledge of this supplier please?
« Reply #274 on: 24 December, 2021, 09:56:01 am »
If fossil fuel producers were forced to charge the actual costs, the fossil fuel market would die overnight anyway as it's commercially untenable.