Energy Prices (Strictly NO referrals!)

Problem for the suppliers is the sheer volatility, especially recently. Chart below shows the nearest futures contract for UKGas. Was 8.3 back in 2020 and 539 today. It's up 17% today and the current price is actually towards the bottom of the daily price action. Before this year it bounced around a bit too - between approx 430 and 155
gasfutures.jpg
 
Mysterae_ said:
If it becomes so expensive to generate power many companies may just opt to stop production or the government may force it to be redirect it to essential services.
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The balancing mechanism will prevent that unless they go bust, even then the Government my step with the administrators if it was that bad.

The suppliers have to balance their outgoing electricity with incoming if they fell short it would be purchased at the spot price and the cost passed on. Likewise if the generators fell short the price would go up and it would get so eye wateringly high people would generate. The generating companies aren’t contracting very far ahead these days and will always match the price charged with fuel costs.

The bigger risk is that by being exposed to spot prices they go bust. If no one steps in immediately restarting a mothballed power station is not easy especially once you’ve lost the staff.

The eleven most expensive days in the UK balancing market history have been this winter in October and November. That trend won’t be getting better anytime soon.
 
Goodie said:
So what are we saying, the energy supplying countries are going to be absolutely raking it in over all this?
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Well, imagine being paid £539 for something that less than two years ago you'd get £8.3 for. To be fair the long term mean is around £48 but we're at over 10x that now and very quickly too.

Here's a long term regular scale chart which shows a better perspective. This is UKGas nearest contract price since 1998. Interesting thing is the current rise started well before this war, with a long term breakout occurring in approx June 2021, which pointed to possible higher prices ahead. And this huge move started off of the Covid crash low.
ukgas1998.jpg
 
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a1ex2001 said:
As the famous advert goes ‘every little helps’ and it would be nice to see the we are all in this together rhetoric actually mean something!
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I went food shopping this afternoon and several items I regularly buy have increased by around 10% since last week. Could you have a word with Tesco et al and ask them to do something about it, they're making around 5% profit compared to the 1% of the energy providers. They can afford to help out a lot more and apparently all businesses should operate at zero profit.
 
Bouton Aide said:
Well it is really. They don't need that profit but still do it anyway making any money they can. Every company is at it right now just about. As per usual.

Put more clothes on people, turn all ya gadgets off when not using them and go out to play more ;)

Here comes the massive bill butt hurts.
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Just last month 800 litres of oil for the house, was put into the tank for £560. Now today if I was to get a full tank, 1000 litres it would be over £1100.

The heating is usually kept around 20C and if it's sunny it's dialled back to 12C. Off during summer.
 
DarrenM343 said:
Well, imagine being paid £539 for something that less than two years ago you'd get £8.3 for. To be fair the long term mean is around £48 but we're at over 10x that now and very quickly too.

Here's a long term regular scale chart which shows a better perspective. This is UKGas nearest contract price since 1998. Interesting thing is the current rise started well before this war, with a long term breakout occurring in approx June 2021, which pointed to possible higher prices ahead. And this huge move started off of the Covid crash low.
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Yeah, thats what I mean. I understand that demand dictates price but there has got to be the fortunate few that are going to be getting absurdly rich off the back of all of this.
 
Surveyor said:
I went food shopping this afternoon and several items I regularly buy have increased by around 10% since last week. Could you have a word with Tesco et al and ask them to do something about it, they're making around 5% profit compared to the 1% of the energy providers. They can afford to help out a lot more and apparently all businesses should operate at zero profit.
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I never said all businesses should operate at 0 profit please point to my post that did? and yes the super markets need to be looked at as well why should profit be a percentage? If Tesco’s were happy with the 170bn they made in 2020, why should they make massively more than that this year just because wholesale prices are up? Tesco do no more work add no more value yet they make more because profit margin is a percentage, unjustifiable.
 
a1ex2001 said:
I never said all businesses should operate at 0 profit please point to my post that did? and yes the super markets need to be looked at as well why should profit be a percentage? If Tesco’s were happy with the 170bn they made in 2020, why should they make massively more than that this year just because wholesale prices are up? Tesco do no more work add no more value yet they make more because profit margin is a percentage, unjustifiable.
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Tesco aren't a public service, go to Aldi.
 
a1ex2001 said:
I never said all businesses should operate at 0 profit please point to my post that did? and yes the super markets need to be looked at as well why should profit be a percentage? If Tesco’s were happy with the 170bn they made in 2020, why should they make massively more than that this year just because wholesale prices are up? Tesco do no more work add no more value yet they make more because profit margin is a percentage, unjustifiable.
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In your world who should be allowed to make a profit and who shouldn't?
 
200sols said:
Tesco aren't a public service, go to Aldi.
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I didn’t say it was a public service and I don’t shop there anyway but why is it ok for a business to record record profits selling essential food while people suffer. The fact profits rise because whole sale prices rise is bonkers, not only are Tesco passing on the wholesale price rises they are charging extra for the privilege!
 
a1ex2001 said:
I didn’t say it was a public service and I don’t shop there anyway but why is it ok for a business to record record profits selling essential food while people suffer. The fact profits rise because whole sale prices rise is bonkers, not only are Tesco passing on the wholesale price rises they are charging extra for the privilege!
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So shop elsewhere?
 
a1ex2001 said:
Lol, please point to any post where I have said any business should not be allowed to make a profit….. :rolleyes::rolleyes::rolleyes::o
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You've suggested energy companies should give back £20 of their £30 operating profit reducing it to £10 on £3,000 of business, a slim margin easily wiped out in unstable times. That's of course before interest and taxes so you've reduced their net profit to near enough zero.
 
Surveyor said:
You've suggested energy companies should give back £20 of their £30 operating profit reducing it to £10 on £3,000 of business, a slim margin easily wiped out in unstable times. That's of course before interest and taxes so you've reduced their net profit to near enough zero.
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Tenuous much, did I say they should make no profit……. NO :)

Energy is an essential making a slim profit is still a profit and could see the suppliers making the same actual amount of money as they did last year and don’t get me started on VAT on energy bills our government is going to make a huge amount of money out of this a tax they promised to scrap!
 
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