It is that time of year again.

OldCoals said:
Good luck with the fist one, how will you pay for the second one?
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With you here.

I don't understand why everyone is jumping on the renationalise the energy companies bandwagon. As mentioned earlier, energy companies make 5% profit on personal customers, so at best energy bills would reduce a whopping 5%. This is assuming that the government could run it as efficiently (which is not guaranteed), this is ignoring the costs to renationalise in the first place.
 
Part of the reason they only make 5% profit is the additional cost of attracting customers - the cost which get's passed onto the customers (but isn't profit).

Competition creates customer churn & additional costs which don't exist within a nationalised industry.

Plenty of nationalised industry's are efficient - the NHS ranks highly on the global tables for efficiency (despite the lies you will read in the media).

Finally, good luck with the first one? - the highest rate rates are the lowest they have been for some time, as is corporation tax - increasing these would not destroy the economy (like those in business pretend it does) unless of your you have some evidence to suggest it would?,
 
Narj said:
I'm going to guess that there are many more petrol stations than shale gas wells in the US. so that isn't surprising. Fracking just makes me a bit nervous - I have mental images of a major collapse and most of the surrounding area collapsing into a big hole. :p

I don't really agree with "Hey, it's been polluted a bit already anyhow, so a bit more won't hurt", either.
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I'm also willing to be there are major more spills per thousand petrol stations than shale gas wells... Contrary to belief the oil and gas industry is one of the (if not the most) heavily regulated industries in the world...

That's just not going to happen, as much as Greenpeace/FOTE/random campaigners that have "read about it"* would like us to believe. It also shows a fundimental misunderstanding of what fracking actually is and how it differs from conventional hydrocarbon extraction. That's pretty common for most members of the public. :)

I totally agree with you there, just because we are polluting the world with billions of cars and coal burning (not to mention deforestation and desertification) doesn't mean we can do something else because it won't pollute as much. The main argument against shale gas should be climate change, however that doesn't seem to have reached the antifracking brigade yet... On the other hand that is also an argument for it, displacing coal power for much cleaner gas...**

* real quite from a campaigner who organises anti fracking meetings...
**but you also need to stop coal becoming cheaper and burned more in other nations as well, a problem with our renewables industry as well. Basically the while things a mess, the real solution is to reduce our energy needs, which means reducing the population increase and eventually reducing population...
 
Sigh... these threads. you often find those shouting the loudest in these know nothing about the industry other than "my bloody prices are going up t' roof!"

A few simple things to bear in mind.
Most of the UK power stations are something like 20 years old minimum, outdated, inefficient and costly to run.
The entire national grid is HUGELY outdated and costs an absolute bomb to maintain let alone upgrade.
Wholesale gas and elec are bought over 12 months in advance and most of the UK gas supply is piped from Russia and forma soviet block states.
A private business is there to make profit and with some of the big 6 its only 5% from residential customers

My own personal opinion is everyone in the UK is a sodding NIMBY who moans about prices but doesn't want a wind turbine on the horizon from their house and Doesn't want to fit solar panels or a personal turbine.

We all waste millions of £ worth of Elec and gas a year yet think nothing of it and ***** money away without thought yet we love to complain if prices go up on anything because someone is screwing you over dont forget!
 
HybridX said:
Sigh... these threads. you often find those shouting the loudest in these know nothing about the industry other than "my bloody prices are going up t' roof!"

A few simple things to bear in mind.
Most of the UK power stations are something like 20 years old minimum, outdated, inefficient and costly to run.
The entire national grid is HUGELY outdated and costs an absolute bomb to maintain let alone upgrade.
Wholesale gas and elec are bought over 12 months in advance and most of the UK gas supply is piped from Russia and forma soviet block states.
A private business is there to make profit and with some of the big 6 its only 5% from residential customers

My own personal opinion is everyone in the UK is a sodding NIMBY who moans about prices but doesn't want a wind turbine on the horizon from their house and Doesn't want to fit solar panels or a personal turbine.

We all waste millions of £ worth of Elec and gas a year yet think nothing of it and ***** money away without thought yet we love to complain if prices go up on anything because someone is screwing you over dont forget!
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It's purchased in both the long & short term, a certain amount will be hedged up-to 3 to 5 years in advance, another percentage 2 years in advance with a remainder up-to a year (with smaller quantities traded in the very short term).

How these are split is entirely dependant on the risk appetite or trading strategy of the energy company in question.

Essentially the customer takes the cost of this risk, but doesn't benefit from a price reduction when it turns out fine (ie, not worst case) - it's also expensive & time consuming to constantly adjust prices (which is part of the other reason they don't constantly go up & down to match the market changes).

Not that I'm defending them, just I've worked in that very field (so I'm familiar with the mechanics) & energy companies will try to make as much profit as they are able (like any company would) - ultimately the shareholders are the primary concern.
 
elmarko said:
It's purchased in both the long & short term, a certain amount will be hedged up-to 3 to 5 years in advance, another percentage 2 years in advance with a remainder up-to a year (with smaller quantities traded in the very short term).

How these are split is entirely dependant on the risk appetite or trading strategy of the energy company in question.

Essentially the customer takes the cost of this risk, but doesn't benefit from a price reduction when it turns out fine (ie, not worst case) - it's also expensive & time consuming to constantly adjust prices (which is part of the other reason they don't constantly go up & down to match the market changes).

Not that I'm defending them, just I've worked in that very field (so I'm familiar with the mechanics) & energy companies will try to make as much profit as they are able (like any company would) - ultimately the shareholders are the primary concern.
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Doesn't seem to be such as issue when they price goes up.
 
Energy companies are cutting their own throats, it's at the point now that people won't pay ther bills because they simply can't afford it, people can't pay what they have not got, what a greedy country we live in:rolleyes:
 
Currently work in the industry and was surprised to hear that one of the big-6 I'm currently at earns, on average, just £65 per household per year in profit (backing up the 4-5% profit margin quotes being suggested).

They have even been running at a loss for the past quarter.
 
Jas1975 said:
Currently work in the industry and was surprised to hear that one of the big-6 I'm currently at earns, on average, just £65 per household per year in profit
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'Just'? It's a high volume business, each has millions of households to which they supply. You don't need enormous margin to generate large profit when you are a volume seller.

Where you expecting a 50% margin or something?
 
[TW]Fox;25135775 said:
'Just'? It's a high volume business, each has millions of households to which they supply. You don't need enormous margin to generate large profit when you are a volume seller.

Where you expecting a 50% margin or something?
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:D

Fox has a subtle point here... some national/international companies operate on far lower margins than that, especially with a captive market. Some analogy about fish in a barrel being shot springs to mind...

We need to claw back the basics back to the power of the country and not privatisation.
 
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iamtheoneneo said:
that average bill price seems like a bargin tbh...Dont know how much energy thats for but I pay way more then that at present for my two bed house.

Miliband is a fool, but it would be nice if a more sensible politician maybe at least attempted to rain this in a little.
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Chances are your house (or its occupants :p) aren't very energy efficient, you live in an area that needs a lot of heating/lighting (e.g. Scotland) or on a bad tariff. I don't think I've ever paid more than about £900/year in either 3-bed house I've lived in. Have you put your heating back on for the winter yet?
 
Part of the increases have been because of the green deal..

Wind farms and free boilers, we're all paying for it, obviously some with their lives.
 
If the only way they can remain profitable is by passing on 10% price rises every year then that leads to serious questions about their supply chain that need to be addressed. I'm sceptical this is in anyway related to wholesale prices though.
 
[TW]Fox;25135775 said:
'Just'? It's a high volume business, each has millions of households to which they supply. You don't need enormous margin to generate large profit when you are a volume seller.

Where you expecting a 50% margin or something?
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Not at all. Just wondered if people could perform basic math and realise that the supposed 'billions' made in profit aren't from people's bills.

If they offered to halve their profits they are making on your bill - what good would a 2.5% reduction be? In fact, if they scrapped making a profit on your bill, what difference would a 5% reduction really be to your pocket? A £1 a week.

The profits energy companies make are inline or under that of which supermarkets make.

On the flip side, they have shareholders who expect a return on their investment, shares that have been purchased by pension funds that will support people's retirement. They are a PLC and have a right to make a profit.

But don't let the above ruin a good headline right?
 
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[TW]Fox;25135775 said:
'Just'? It's a high volume business, each has millions of households to which they supply. You don't need enormous margin to generate large profit when you are a volume seller.

Where you expecting a 50% margin or something?
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You seem to be missing the point.

A reduction in profit to 2.5% will only take £32.5 off the annual bill (which doesn't even cover a singular price increase).
 
[TW]Fox;25135775 said:
'Just'? It's a high volume business, each has millions of households to which they supply. You don't need enormous margin to generate large profit when you are a volume seller.

Where you expecting a 50% margin or something?
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This is a thread about power companies, not Supermarkets.
 
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