UKC

I'm sure this is just me being thick, but I cannot understand how the so-called energy market works, or is meant to work, or how it could possibly be a thing that might work.

I moved into a new flat and there was an electricity supply set up, thankfully, so I'm with that supplier by default. I thought I might switch, since that's what you're meant to do in order to make the system work and get cheaper bills, so I didn't tie myself in to a "deal" or non-rip-off tariff. The "switch electricity supplier" task on list of tedious admin jobs was fairly low priority and got not-done for ages, because it's the kind of thing that drives me up the wall, with all the being left on hold for e-ons (hoho) and hold music and all that. I presume it's at least 8 hours of work, since just paying a bill can take getting on for an hour (trying to get into online account, don't know any details, try to reset them, fail, give up, try by phone, be put on hold...).

So I get a bill and think "uh-oh, I'm on the rip-off tariff, best sort this out before winter". I decide I can't really be bothered switching (I just don't have the time, I don't have any idea how much electricity I'll use in this flat in winter, it's just a tedious task that I have no idea what the potential saving is but I doubt it's life-changing), so I'll just try to address the rip-off tariff issue with this supplier. I spend a bit of time on the phone and on the internet, and I'm presented with a bunch of options, which are getting the same electricity for various different prices from the same company. I am being asked, do I want to pay a monthly bill of £60, £66, or £71? I don't know about you, but I think the best offer out of these is the £60. I have no idea what extra benefits I'd get for the £66 or £71, but I suspect the difference with the £71 is that I would then be allowed to switch. There's probably some element of gambling involved, but I don't know what I'm gambling on and of course no idea of the odds. So I'm totally baffled as to why anyone wouldn't choose the £60, and if I wanted to know I'd presumably have to spend my leisure time reading terms and conditions of energy "deals", which is something I'm not going to do. For some reason, I'd rather spend it typing out this boring post on UKC.

What I'm saying is that this is nothing like a market. Every single buyer wants precisely the same thing: they want electricity at the lowest cost. Doesn't matter how you dress it up, that is what every single buyer wants, without exception. So it's a natural monopoly, as we all know. Since there's no variation in the product, all we have to choose is price. However, there is almost complete obfuscation of information about the price. So in this "market" a good deal of the price is actually wrapped up into the amount of work the buyer has to do to find the information about the price.

This is a barking mad system that makes absolutely no sense. It is not a market. No one wants electricity at anything other than the minimum price. The incentive for the suppliers is to collude in obfuscating information and over-charging. The greater number of people they can put off engaging in the market, the higher their profits. So the worse the service, the harder to engage, the higher the profits. It's mental.

Why would anyone ever think this would work? It's fundamentally flawed because energy is a fungible good, therefore a natural monopoly, so if you try to create a fake market, it will be full of perverse incentives and will fail.

I just want my electricity supplied by whoever's job it is to supply it. I want someone working for me - i.e. the government - to make sure that whoever is supplying it is not ripping me off. How was this "market" crap ever supposed to work?

Other than resorting to the argument: "if it's nationalised, it simply cannot work, remember the 1970s" can anyone explain how this utter catastrophe is preferable to having a single supplier whose job it is to supply electricity, which is overseen by government, on behalf of the consumer?

In reply to Jon Stewart:


I agree. The only reason that the market applies at all is due to arbitrary enforced lags (and other restraining conditions) in the system. Specifically, if we were allowed to change our supplier every *second*, say, then all that would be required is for a computer program which selects the lowest cost supplier to do that switching on our behalf. If everybody used that, then the illusory 'market' would have vanished in a puff of smoke.

In reply to Jon Stewart:

What always baffled me was how Scottish Power managed to supply Cornwall and Devon?
And don't get me started on how French state owned power suppliers manage to supply half the bloody country!!

In reply to Jon Stewart:

The whole system is bonkers. Not much of the distribution network is even British owned nowadays. Some companies distribute but don't supply, some supply but don't distribute. Money that could be used on upgrading the network is being sent abroad to parent companies. It's crazy.

If your supplier isn't a distributor and your meter packs up on Good Friday, best of luck getting a new one before the following Tuesday. The utility companies should have never been privatised IMO. Too late now though.

In reply to Jon Stewart:

Re monthly bills, isn't that just a guess at your usage? If you go £71, won't you slowly accumulate credit and potentially a debt if you go for £60? Incidentally, we pay £45 for gas plus electric in a large house, so you might want to ask again!

Not sure everyone wants the same. Eg.amount of power, renewables, time of day, certainty vs changing bills etc. But agree the hassle and time involved in knowing which way to jump is disproportionate

In reply to Gone for good:

Long wires

In reply to MG:


No, they're different tariffs.


Eg.amount of power,

So there are bulk discounts for household electricity? Nope. Not a thing.


So having electricity produced sustainably isn't a policy, it's a commodity that those who can afford it can buy so they feel better? Nope, not a thing.


But the rate you pay is the rate you pay. You don't get different "deals" for using "peak time" energy do you? How would such a deal work? Surely the way to manage the supply is using off-peak electricity to do useful non-domestic stuff, and for the production system to deal with spikes in domestic usage when the adverts come on in X Factor? This isn't something that people want - it's a problem for the suppliers to solve. As far as the "market" is concerned, this is not a thing.


Nope, that's obfuscation of the price and gambling. What we all want is the lowest price. Not a thing.

In reply to Jon Stewart:

The whole system relies on creating confusion through needless complexity as a way of screwing the consumer out of more money by making it fiendishly difficult for them to find and then keep a good rate.

You may enjoy reading this paper - https://www.cl.cam.ac.uk/~rja14/Papers/JSAC-draft.pdf

In reply to Jon Stewart:

Effectively yes


Google.GoodEnergy


Google.economy 7

You seem to want convenience, so do.nothing. Others want things as above and change supplier. It works. Sort of.

In reply to Jon Stewart:

I broadly agree with your point but there are a handful of actual priorities to juggle:
- If you're on an Economy 7 meter, as I am, the ratio between night and day prices can vary. You can choose a tariff that suits your particular ratio between night and day usage.
- Some tariffs offer a low standing charge but high unit prices, which would suit customers that use less electricity.
- Some tariffs claim to be selling you only renewable electricity, though I'm sceptical about the veracity of that claim. I suspect the justification is legally watertight but would fail a common sense sniff test. Apart from anything else, the premium over the standard tariffs is normally tiny.

Having said that, you're right, it's a ridiculous system.

I would recommend making the effort to actually switch. I've done it several times and it's mostly been fairly painless. The only real effort has been sending a few meter readings, which you have to do from time to time anyway. Using uswitch can make it even easier.

In reply to MG:


There are incentives for using *more* energy? Bonkers?


What I'm saying here is that what is being traded as commodity is the "good feeling" you get from buying "good energy". It's a completely ridiculous way to manage the transition from carbon to renewables. You can't rely on the consumer to voluntarily pay more for "good energy", you have to have a policy that brings about the transition from carbon to renewables. Getting vain rich people to pay extra for "good energy" - effectively charging them for being able to brag at dinner parties about their green credentials before they drive their 3L diesel BMW to the airport is just a total joke, it's not selling a thing in a market.

I'm not saying voluntary extra tariffs for "good energy" don't exist, I'm saying it's not a real thing anyone should ever be able to bring to market. It's not a sensible way of making the transition away from carbon, it's a stupid idea.


The idea of differential tariffs to incentivise more efficient use of electricity could be useful. But this is really just another way of obfuscating the price and asking the consumer to gamble. How will I know whether it's better to go for this rate where I put the kettle on after everyone's gone to bed, or I just choose a supplier with a cheaper averaged out rate? You can't make a sensible decision on what "product" you want because all the information is obfuscated.


It doesn't work, it's a load of bollocks, because the things being sold in this so-called market aren't real things. People don't actually want these things, they just seem like good options in a sea of confusion and nonsense. Everyone wants the same thing: electricity, an actual thing. And they want it at the lowest price. Everything else is fake, made-up commodities and gambles with insufficient information about the odds. These aren't things anyone should be selling, they're nonsense.

In reply to Luke90:


Thanks, I just did. You're right, uswitch was incredibly easy, although I have a strong suspicion that it won't actually work, because I couldn't provide all the info I was asked for.

In reply to Jon Stewart:

If/when the government get round to it you'll have all this fun with your water supplier as well - https://www.theguardian.com/business/2016/sep/19/uk-water-regulator-backs-p...

As an added bonus, the maximum amount you can save is probably about £8 a year. Obviously prices will need to go up though as all the water companies will have to spend millions of quid implementing retail competition and separating their wholesale and retail functions so you won't actually save £8 but who really cares? The important thing is that an entirely pointless market in a natural monopoly is created for ideological reasons.

In reply to Jon Stewart:
P.S. Did you go through a cashback site? One of the reasons I switch fairly regularly is that every time I do Uswitch pay me £30, which makes up a bit for having to do such a boring task.

In reply to climbingpixie:


^^Everything I've said in far fewer words, thanks Although "pointless" doesn't quite express just how much I loathe the current state of affairs: with all the admin, and the call-centres, and the hold music, and the slogans and jingles and logos, every time I'm prompted by a bill to "engage with the market" I feel like I'm drowning in a lake of capitalist diarrhoea.

In reply to climbingpixie:


I just went to uswitch. I dread to think how this £30 thing works, if it's that easy to give it away it probably originated in the public purse to begin with!

In reply to Jon Stewart:

What if you want premium, organic superfast electricity?

moneysavingexpert.com has a handy "cheap energy club": you tell it how much gas and/or electricity you're currently using (you can get this from your bills) and it will give you a list of tariffs from the cheapest to the most expensive. Some of the energy providers they list offer cashback when you switch. The site also outlines the pros and cons of each supplier, including their customer feedback ratings.

It's similar to uswitch except that the system keeps an eye on your tariff and sends you alerts if it spots a cheaper one coming on the market that might suit. You do have to take early exit fees from your current provider in to account yourself. (Note that AFAIK it's a rule that providers can't charge exit fees if you switch within 50 days of the end of a fixed term deal.)

I've used this service to switch to a new fixed price deal every 12 months for the past three or four years. It's always been very little effort and if cashback was part of the offer then it has always magically appeared.

I think switching energy providers is vastly simpler than shopping around when it comes time to renew the car insurance (especially since, these part few years, after all that hassle I've found that my current insurer is offering as good a deal as anyone else).

In reply to Jon Stewart:

It worked well for me using websites that request the switch for you, I used to switch every year and it saved me a lot of money.

In reply to Martin W:


Who are you with?! I've never found an insurer that doesn't tack an extra £100 on the renewal offer just to see whether I'll be lazy. You've found the holy grail!

In reply to Jon Stewart:



To me, varying pricing through the day would be the best way of spreading the load, and was a complete missed opportunity with the roll out of smart meters (which I still don't see the benefit of)

In reply to Jon Stewart:


I disagree, and take exception to being called vain and rich. I may be vain, but I am definitely not rich!

More seriously, we get our electricity from a renewables only supplier, and did so with one of the first such suppliers when living in the UK. I think it is essential to create a demand for such energy, as it is the demand that drives changes in the market (which mainly works above individual consumer level). Only if you have a buyer for wind generated electricity, will there be an incentive to generate more of it. In that respect it is essential to buy from a supplier who will source the energy from the producers accordingly. A renewables only contract from, say, EON, will just shift he energy mix for all regular customers to non sustainable sources.
I totally agree, though, that state intervention is required on top of subsidies, e.g. by strictly limiting the amount of coal that can be burned for energy, or by directly shutting down coal plants: Germany is in dramatic danger of missing its climate targets. However, largely that is due to cheap coal generated electricity that is largely produced for export!

CB

In reply to Jon Stewart:

The crux of your argument is correct:

Electricity actual costs = cost of production + transmission + distribution + maintenance + investment in renewing assets + reasonable profit

The current system is built around maximising profit by having people on a tariff which isn't suitable for their needs. When questioned about spiraling costs, distributors always shout about the wholesale cost, neglecting to mention that those wholesale costs are driven by a legally separate arm of the same company as themselves, i.e. EDF distribution pointing to wholesale costs over which EDF production have a large influence. "Rigged" isn't far off explaining it in my book.

Add to this that the so-called "green crap" is charged disproportionately against the first units of electricity that consumers use and frugal energy users actually end up paying a higher percentage of their bill towards taxes which are supposedly meant to encourage less energy use.

It's a load of bollocks. A publicly-owned company should run it from front to back.

In reply to bouldery bits:


Vegan electricity?

In reply to Jon Stewart: i work for an energy supplier and you’re right - the market is fecked. But not just by the energy companies (though as an industry we are years behind others in the way we think about customers, partly because of ancient infrastructure and partly because it is, as I frequently describe it, “the industry that thinks it knows best”. It’s run by engineers who think they’re now retail geniuses because they’ve been to a focus group).

There’s a few things to be aware of: the main on being until you get a smart meter the supplier doesn’t know how much you use unless you tell them, or you have a meter reader round (which legally only has to be every two years). So we have to guess your consumption which is pretty much always wrong. Customers switching very often provide duff info on their consumption anyway, so we get it wrong again. So the cost of £70 a month might really be £100 - and the supplier gets the blame because “you said it would be £70” - but it never was £70.

The other thing is that whilst i’d agree people want the commodity for as little as possible, the way energy is hedged means that a one year fix is generally cheaper than a three year one - but lots of customers would rather pay a bit extra for longer term price certainty (as they do with mortgages). Green energy does cost more and our licence condition says our prices have to be cost reflective. You also might get a lower price for paying by DD (less debt risk) or having gas and leccy.

The final thing to remember is that successive governments have f*cked up the “market” with ill-advised the nterventions (read Dieter Helm’s report out last week - the reason for increasing energy bills is government’s fault, which is not what they were expecting him to say).

In reply to Jon Stewart:

It's a fairly dysfunctional market but there is genuine choice in one respect, we can choose how the energy we buy is 'generated'.
jk

In reply to Jon Stewart:

Shamefully it is a thing though it isn't presented as a bulk discount. Many tariffs have different rates for base and additional units and different thresholds at which the rate changes. If you're a low level consumer then the additional unit rate is basically irrelevant, if you're a heavy user then the additional unit rate is much more important. The 'best deal' differs with the amount you consume. Not by much but enough to give the companies a figleaf of competition to hide behind.


My renewable supply costs no more than my old fossil fueled contract and Good Energy aren't a bunch of hopelessly incompetent fuc*wits who take three years and ten+ hours on the phone to issue a bill so that's 'a thing' too.


You can and it will become more of a thing as the renewable fraction and available storage increases. This can be made mutually beneficial for supplier and customer and I suspect it's where we'll see the majority of the meaningful competition in the coming years as suppliers seek some access to storage and control over consumption in exchange for discounts.
jk

In reply to cb294:

The problem is that you can't really source it in that way. It needs to be sourced from a mix of supply types depending on peaking demand.

It's really a political matter. One supplier (privatised and run under contract if preferred) with one tariff would be absolutely fine.

It's not like supermarkets where there are several different ones you can go to. It makes as much sense as on-rail competition does, i.e. none.

In reply to Neil Williams:


Depending on your circumstances you increasingly can. If you have the roof area and are willing to spend on the order of £15k you can source your own demand by entirely battery-load-shifted Solar PV (grid connected) for about 8 months of the year, and at least chip in for the rest of the year. Specifying a system to work around the equinoxes leaves one a net exporter over the year.

Tesla’s battery offering is well cheap compared to other lithium batteries intended for this sort of thing, so I think it’s going to get cheaper yet.

This is less eco friendly than going without load shifting (more stuff to manufacture) but gives more independence from the grid and isn’t as expensive as you’d think because of the difference in consumer import and export tariffs.


Don’t forget Directory Enquirees. I recall when it was a simple to use, almost free service that didn’t bombard me with advertisements on the telly and didn’t leave me trying to find which of 10 different providers was least expensive...

In reply to wintertree:


Fair point, but on a wider scale (i.e. supply rather than producing your own) that is more difficult.


Quite. Though TBH Google has replaced it near enough entirely.

In reply to Jon Stewart:


Many (most?) people can provide that information.

Are you suggesting that they should lose the ability to tailor their tariff to their usage just because others might have just moved house?

In reply to DaveN:


Many of us do get cheaper rates overnight and run washing machines etc on the low rates using timeswitches.

In reply to Jon Stewart:


I'm going to come out of the closet and admit I subscribed to Good Energy about 10 years ago. It wasn't something I ever mentioned and, at the time, on a <£25k a year salary in London I could barely afford to upgrade my bicycle, let alone drive a BMW.

Their credentials were what I valued in that market and as such I was happy to pay the marginal extra cost, in the same way as buying free-range or considering ethical suppliers for any other purchases. Judging by their branding and marketing, far from aiming at wealthy home owners in Southwest London they were more appealing to yoghurt weavers living in shacks of recycled materials. Their circulars tended to focus on how customers had gone a step further and built their own micro hydro or wind turbines.

A certain degree of personal accountability or responsibility when it comes to environmental sustainability and a willingness to pay the full cost for services is not something to be sneered at. In that sense the market works; you have the choice of paying for what you value. Perhaps its an English thing to expect all the direction to come from government edicts. The Japanese, as one example, seem to require less in the way of government policy or coercion to voluntarily buy renewables or sort their recycling.

And far from "not being a thing", Good Energy of course couldn't guarantee the electron flowing down your wires came from a spinning windmill. What they did pledge was to match every kW/h you consumed with an equal amount pumped in to the grid from their renewable sources.

Part of the problematic thinking is a belief that a market compels you to choose the cheapest possible option. Why not instead research the companies, choose one that has policies (environmental, CSR, salary-setting, HR, or simply has a colour scheme and branding that you like) and go with them? The extra £70 a year it costs you might be worth it.

In reply to MG:

The problem, or the immorality, is that the ability to pay the least for one's energy depends on having the time, and familiarity with internet use, to be able to get the cheapest deal by researching, and phone round too perhaps.

If bulk buying can make energy cheaper - per unit of energy, why not have the country buy it in bulk and pass any savings onto the general population?

It can happen that the poorest and least connected - digitally speaking - pay more for their energy than others do, I think there's no way that this can be right.

With how a home's energy rating can be find-able online, and how the authorities know how much people earn (on the whole), if the energy came from a nationalised and state owned company, a system could be created where people could pay an amount for their energy which meant that they still had enough left to eat, and wouldn't have to choose between heating and eating, by using information which is already available.

In reply to Neil Williams:
Electricity is bought and sold at exchanges like EEX in Leipzig. Demand will thus be matched with supply, and of course, if my supplier Lichtblick asks for a certain quota of wind generated energy some wind farm or hydroelectric plant will crank up their turbines, while a coal plant next door will not increase the amount of electricity it generates. Of course, both will feed into a shared grid, so you do not buy the electricity directly from the wind farm, but there is no need for this to achieve the desired effect on emissions.

I agree that rail competition is a doomed form the outset, as it makes no sense to separate tracks from trains, which is of course a prerequisite for competition. However, for electricity competition can be a driver towards more eco friendly business models.

CB

Last I read, Lichtblick was able to source almost 100% of the electricity it sold to its customers from renewable producers.

In reply to Timmd:

if the energy came from a nationalised and state owned company, a system could be created where people could pay an amount for their energy which meant that they still had enough left to eat, and didn't have to choose between heating and eating.

Wouldn't that mean the state would be deciding if you get heat or eat?

In reply to Timmd:

There’s no problem or immorality in that.

If people want help, they can ask.

The problem with society is that people are too proud to ask. I’m not buying all this nonsense about poor people not having internet access, or people with low intelligence not having the ability to understand things.

Regards bulk buying, it’s the electricity companies that bulk buy, not the consumer. You switch to a supplier who has a long contract to bulk buy electricity but they don’t have enough consumers to buy those units, they drop the price to attract more consumers. That’s exactly how supply and demand works and works well, otherwise you have a government monopoly who decide for their own ends how much to tax people for energy usage. That would really hit the poor unfairly.

In reply to FactorXXX:


Rather than private energy companies which have no democratic accountability, who provide energy more cheaply to those with the time and resources to find a better deal? It's either one or the other, it seems to me. I think it could be made to work.

It's either one or the other, it seems to me. If some people can pay less for their energy, why can't more people?

In reply to Timmd:


It's a pain in the arse. Not hard or immoral(!).


As I understand it, essentially that happens - the people we pay a bill to buy large chunks of energy from the generators. It's cheaper I would guess if you use a lot because the cost of billing, websites etc. is pretty much fixed per person regardless of usage.


Or we could just pay benefits that are sufficient, which would be simpler all round. Also energy ratings are nonsense - I am writing this wearing a jumper under a blanket. If I tried to heat the house to 20C as the energy rating expects, that would be absurd

In reply to Timmd:

It's either one or the other, it seems to me...

and you're quite happy for the state to make those decisions on your behalf?

In reply to MG:

There are people who can't afford to have broad band at home, who work enough hours that they struggle to/don't have the time to access internet elsewhere (especially since libraries are closing), who pay for their energy by paying into a meter at home, which makes their energy more expensive than the energy which people who have more time, more money, and have access to the internet at home, do. To me, this is immoral, something which shouldn't happen in 21st century Britain.


The ratings could be made more accurate?

In reply to Timmd:
I have some sympathy with the coin meter people, that doesn't seem fair but they are a tiny minority. It wouldn't make sense to arrange the entire energy market around them.

In reply to Timmd:

Probably not without huge effort but anyway, the point of the ratings is to encourage people to insulate buildings and use less energy, not to subsidize their energy so they use more or don't bother with insulation!

In reply to MG:


It wouldn't just be for them, though, as the pensioners (and others) who aren't so internet savvy, could benefit too. If it's true that it's cheaper to buy energy in bulk, I can't think of anything 'more bulk' than one national company buying it in bulk. Potentially, it could free up the time people spend looking for the best deal, and nobody would end up paying more for their energy.

In reply to cb294:
And Germany has had that kind of competition since way back - you could have Oeko-Strom (i.e. eco-electricity, namely from renewables) or "gelbe Strom" (the latter being cheap coal-produced electricity) back in 2000 when I lived over there for a bit.

But isn't the scope for that bigger in mainland Europe than within the UK which has a natural disadvantage being an island?

In reply to Timmd:


Experience shows that if you have just one company doing it, it becomes very unresponsive and costs increase. The idea of many companies is they are forced to compete and try to reduce costs so everyone wins. Whether this is true for energy is debatable, but assuming a state monolith would be better is naive to say the least, i would say. Anyway energy generation is likely to become much more local in the future, nuclear aside.

In reply to MG:

Why wouldn't people still want to make their homes more efficient and pay less for their energy bills?

Most people want to pay less in life...

In reply to DancingOnRock:




Or why not let those people keep self-respect by using those funds to create jobs and increase pay at existing ones so they can actually live off their work?

In reply to Timmd:


But in your scheme what they pay is linked to the rating. Insulate your house and improve the rating, and the cost of power goes up!

In reply to MG:
It's not particularly expensive at all to heat my (smallish 3 bed terrace) house to 21 degrees, never mind 20. Perhaps you need better insulation?

There are grants for that, maybe there should be more. And new houses really need to be better designed in that regard.

In reply to MG:

It'd be linked to income, too.

In reply to cb294:

if my supplier Lichtblick asks for a certain quota of wind generated energy some wind farm or hydroelectric plant will crank up their turbines

How does a windfarm or hydroelectric plant crank up their turbines at will?

In reply to Neil Williams:

I don't. I am wearing some insulation and have some more draped over me. And have some feline insulation on top of that right now. All good. This makes much more sense to me that heating an entire house -particularly the stone built Victorian one that I live in that couldn't be effectively insulated without destroying a lot of what I like about it.

In reply to Neil Williams:

AFAIK the UK is not part of the synchronized, continental European UCTE grid. However, there are DC connections between the UCTE and teh UK grid, with offshore wind generated electricity going one way and French nuclear electricity going the other way.

CB

In reply to DancingOnRock:




So, the people I've read about, and heard talking about this, would have been fictitious then? :-/

In reply to Timmd:


Rather than trying to micro-manage people's lives by giving them free TV, travel and in your scheme variable energy costs, why not just say there is minimum income everyone gets - the government are very clumsily aiming at this, of course

In reply to FactorXXX:

Turn turbines into the wind, or move the blades out of neutral? If you look at most wind farms, not all turbines will be running at max speed. As for water, increase the flow from the dam? Hydroelectric power from pump reservoirs are actually the quickest plants to respond to surges in demand, which is why they are crucial for any grid supplied by lots of renewables.

CB

In reply to MG:

And that's fine if you're happy with that - what isn't fine is people who live in houses the same but want to heat them to 21 degrees (or hotter in the case of older people, often - my housemate, who isn't even old, is forever whining about it being too cold), because that's (a) environmentally unfriendly and (b) really expensive.

Therefore there's a solid argument that whacking energy prices up to pay for insulation is a good idea, which can't be done in a free market to the same extent. (I suppose it could be introducing a tax). If you choose not to heat or heat very little, that's your choice. If you do heat...well, have some insulation, or it's going to cost you.

(My house is 1970 built, double glazed and well insulated though I will improve the loft insulation at some point to make it even cheaper - it'll probably hold temperature for a day or so by then - at present it already only drops a couple of degrees a day when it's empty in winter)

In reply to cb294:


There are, but the capacity of the links and the practical quantities transferred are very limited in scope compared to those between comparable neighbours on the synchronous European grid. France is currently exchanging about 6 times the quantity of power (magnitude sum of in and out) if the UK, for example.

We are building more DC links but our island nature will keep us relatively weakly connected for the foreseeable I think.

In reply to Neil Williams:


Absolutely agree. Which is part of why I think energy ratings highly dubious. They assume everyone lives in a houses heated to 20C throughout (or similar), which is a ridiculous way to run many old houses -heating small spaces and individual people is the way to go. Further people then expect all houses to be heated like this which actually increases energy consumption.


Yep. (I do in fact have a stack of insulation in the loft where it is easy to fit and full double glazing), but 2 foot thick stone walls are never going to be anything but cold.

In reply to MG:

I see the latter point, but the former...if you're looking to buy a house, if it has a low energy rating and you don't like i being say 16 degrees with a jumper and slippers on, don't buy it! If you want to heat to 20 degrees (or thereabouts, 20-21 makes very little difference to cost in mine from observation) you need to buy one with a good energy rating, which probably means one built in the last 40-50 years at most, and ideally even newer (though some wooden framed 1990s houses lose heat like there's no tomorrow, my old flat was terrible, it cost far more to heat a one bedroom flat badly than my present 3 bedroom house well).


It is possible to put 8 inches of polystyrene insulation (Celotex/Kingspan) on the inside and board over it (rather like the panelled bit under my front window, the proper insulation of which saves me a fortune compared with before) but that, as you say, will remove a lot of the character and make your rooms smaller. So I can entirely see why you have not chosen to do that.

An increase in energy price might well force people into that choice rather than just wasting energy on heating the back garden.

On another note, I'm glad that aircon has not become common in UK houses (not least because it's completely unnecessary, but I hate it anyway as it dries me out) but we need to start building office buildings so they are naturally well ventilated, warm in winter and cool in summer, like well-designed houses, rather than building greenhouses and wasting energy on air conditioning them. I'd actually go so far as an outright ban on air conditioning in new office developments, so wasteful this is. Then they'd have to design them properly.

Hotels too, if you don't have it in your house you don't need it in a hotel room either. First thing I do on getting into one is switch it off and open the window.

(Vehicles are different - it can be the case that air-conditioning a moving vehicle is cheaper (in energy terms) than having windows open because they cause airflow disruption along the bodyside and thus increased energy used to move the vehicle forwards).

In reply to Timmd:


Yes that issue needs tackling, but is it sensible to allow it to change the way that absolutely everyone purchases their home energy?

In reply to Timmd:


You’ve read about and heard people talking about not being able to get cheap electricity because they don’t have high speed broadband 24/7 to compare a few electricity providers once every 12 months?

I don’t buy it. It’s another excuse.

If you can’t read and write you haven’t lost your self respect if you ask someone to help. You lose your self respect when you don’t ask when you need help.

In reply to DancingOnRock:

But asking for assistance with self improvement is VERY different from asking for charity.

In reply to DancingOnRock:




There are some people who don't switch because they are confused or don't have internet access (though all the price comparison sites have telephone lines who'll switch you), but the vast, vast majority of people don't switch, or only switch infrequently, because the saving isn't actually that significant compared with the perceived hassle (or risk of making a duff choice - the service experience is "variable" to say the least, mainly due to ropey systems). I meet customers every week that say "why would I switch? I can only save six quid a month - I'm happy with what I've got."

But politicians and the regulator believe that the ONLY measure of an efficient market is rampant switching - but that's because, just like the energy industry, they think they know best.

In reply to Jon Stewart:

The baffling part for me is what the energy companies are actually providing. All consumer power comes from the national grid, so it should be the national grid that negotiates deals with energy providers. But are the energy companies even providers? Do they generate the power that feeds the grid? Surely some of them must be, but are others just leech middle-men sucking money from consumers in return for providing good marketing and bad service?

In reply to Neil Williams:


Why is Britain at a disadvantage by being an island, I presume you mean in sourcing renewable energy? There can't be many other nations that have three big tides nearly perfectly out of phase and all geographically close enough together to network energy extracted from them or quite so much relatively shallow water offshore wind potential and a pleasant enough climate that solar forms a viable balance to wind and hydro.
jk

In reply to jkarran:


I agree, but we need to set all that up here, so it makes more sense for it to be done on a single-supplier basis even if we subcontract installation, operation etc like we do the railways.

Where Britain is at a disadvantage is the ease or otherwise of buying energy on an open European market due to the limited scope to move it across the Channel.

In reply to Neil Williams:


Who said anything about charity?

If you need help with finding low prices and switching, ask someone to help. I don’t see how that’s losing self respect.

In reply to andy:

Are you sure that’s what they believe?

Who rampantly switches between supermarkets?

The only measure of an efficient market is prices that are nice and stable while company profits increase. And government tax revenue consequently increases.

In reply to Neil Williams:


Some of it (the tidal part especially) certainly requires some bold strategic planning and investment that has been sorely missing. I don't actually agree electricity needs to be single supplier, I believe there can be a properly functioning and meaningful regulated market in consumer electricity but the hands half on half off approach of government at present isn't going to achieve the changes needed to really clean up our generating infrastructure.


It's not currently, pun intended, sorry *that* mobile. There are significant costs in transporting energy across continents and not much infrastructure in place to facilitate it at large scale yet.
jk

In reply to Neil Williams:


I'll make a wild assumption that many folk spend more time looking through holiday brochures than they do looking at loans, mortgages, insurance and utilities totalled up. They could write a thesis on the airport flight supplements and car parking, but couldn't tell you what their current electric tariff is. It's down to motivation to plough through the detail.

In reply to summo:

This isn't surprising - electricity isn't interesting. Most people just want it from one supplier at the cheapest price possible. It would better serve the country to have only one regulated supplier per area, in the manner of water.

In reply to Neil Williams:

I'd guess that it is more a case of people being bone idle and complacent about the essentials in life.

In reply to Neil Williams:


In theory, but prices would then vary from region to region? Without national price fixing.

In reply to timjones:


We don't have to arrange, on a domestic basis, policing, nor having the bins emptied, nor having our street swept.

The idea that energy and water should be similarly simplified doesn't seem odd to me, given that there is limited scope for *actual* competition and considerable benefits to *not* having it.

In reply to summo:


I'm sure it does for water too, based on relative costs plus a regulated profit margin (in effect).

In reply to Neil Williams:


It's kind of like that here with pricing fixed in regions. https://en.m.wikipedia.org/wiki/Electricity_price_area it is competitive though.

Plus you pay a connection fee monthly of £40ish and tax on the kw unit cost roughly doubles the price. But it's pretty clear and annually you get letter telling you the fixed or variable tariffs and you have a couple of months to decide.

In reply to DancingOnRock:




Yep, i have reasonably frequent meetings with the regulator and there’s HUGE pressure to increase switching. They have basically taken the barriers to entry down completely (there’s now over 80 suppliers in the UK lots of whom have insufficient resources to withstand any market volatility - see GB Energy), they want switching to take 24 hours (despite there being no evidence that’s what customers want - they want it to be reliable - and consumer law meaning people have to have a 14 day cooling off period) and they report gleefully on increased levels of switching (it’s up 20% year on year) as evidence of what a great job they’re doing.

It’ll be interesting to see the response when the Ofgem set cap for prepay customers goes up next April (which by their published formula it will). “Government increase energy prices for millions of families” headlines, anyone?

In reply to Neil Williams:

I can't recall any benefits, considerable or not, from the time when we didn't have any choice.

What do you think we stand to gain by reverting to single regional suppliers?

In reply to timjones:
Less faff. The competition isn't genuine anyway, not how it's set up in the UK. What they're competing on is who can bill you more cheaply. That could be achieved by just tendering the billing infrastructure operation every 5 years or so.

In reply to timjones:

Yes, but that's economy 7/10 isn't it? This all existed before "smart" metering. This could have been used to address inbalance in the market,but missed. Instead you get your fixed unit rate. I don't have economy 7 so just do my washing when it's convenient for me, whereas the network could probably benefit from further load spreading.

In reply to Jon Stewart:

Struggle to believe this thread.

Switch every year through uswitch. Save money every year. 15 mins max.

The thought of just one supplier, prices would just go up.

In reply to andy:

Nobody cares about you those on prepay, doubt there will be a fuss.

The charging structure is completely unfathomable anyway.

In reply to Jon Stewart:

" I feel like I'm drowning in a lake of capitalist diarrhoea."

Lol

In reply to ian caton:


Nobody is saving money though. Some people are being deprived of less money than others.

Think about all the redundant levels of staffing and infrastructure, the extra marketing and also the extra regulatory oversight that comes from having this “market”. That’s costing us all money...

In reply to wintertree:

Well. In a perfect world we would all sit at home all day doing nothing. That would save trillions.

In reply to DancingOnRock:


I’m not sure that excuses wonton inefficiency and corporate profits on a core/essential piece of infrastructure.

It’s not about saving trillions - it’s about spending them in ways that enhance the future for us and our descendants, not spinning them round in circles of corporate waste that don’t enhance the future and contribute to a low level annoyance of the people who get drawn into playing silly games driven purely by the confusionist pricing of the beast.

Rant rant rant rant rant.

In reply to wintertree:

My bills are two thirds what they used to be. So I, for one, am saving money.

You describe the capitalist system succinctly. I am happier with it than central planning, however messy.

In reply to DancingOnRock:


I do.

By regularly shopping online using a mixture of Asda, Morrissons, Waitrose, Sainsburys etc, there is always a deal that I can take advantage of, enabling free delivery plus significant savings.

It would cost me about £10 extra a week on the same shopping if I did all my shopping at one supermarket, regardless of which one I used.

I can understand some people not bothering to put in the tiny amount of effort required to do this but it is a significant time and money saver over physically going in to any of the shops (unless you shop exclusively on yellow labels).

In reply to john arran:


Correct, most of them are not providers.

However, far from being leech middle-men sucking money from consumers, a lot of the newer, smaller companies actually manage to be significantly cheaper than any of the big 6 and they manage to provide far better customer service.

There seems to be a lot of people who hate the practices of the big 6, yet they continue to blindly pay them excessive rates while suffering shocking customer service. When switching takes so little time, I don't understand it.

I recently moved home, having not been responsible for utilities previously. By default, the house was on E.on's extortionate standard variable. It took 10 minutes to research my expected energy use and fill in my details on 3 different comparison sites (they don't all cover all companies). Then a further 5 minutes to review the reputation and customer reviews of the cheapest companies, then 5 minutes to signup to my new provider and provide meter readings.

~£250 a year saved for the time it took me to finish my cup of tea and I never even had to deal with E.on's 'customer service'. As it turns out, the cheapest provider for my use also purchase 100% of their electricity energy from renewable sources so I can also feel I am doing a tiny bit to help push the demand away from fossil fuels.

My only gripe is that with the current switching rules, I was not able to switch until I had already moved home, meaning I had no choice but to pay the thieving barstewards at E.on for the first few days.

@Timmd:

There are some people with no access to broadband. But other than pensioners who have never learned to use it, the number is vanishingly small. The number of people these days with no access to broadband, no access to a single smart phone or other wifi enabled device (there is free wifi all over the place), no library or internet cafe (yes they still exist, especially in less affluent areas) etc etc is tiny. Switching is just as possible for most poor people as for everyone else. I just don't buy the lack of access to switching argument. Without access to the internet, there are plenty of phonelines people could use to do it.

If someone won't spend a couple of quid to access savings of hundreds, there really isn't much you can do to help them.

People on prepaid meters are in a much worse position but that is a separate issue.

Everybody knows there are savings to be made by switching (you can't escape the adverts) but if people can't be bothered and would rather pay more, that is their choice.

In reply to Neil Williams:


It's very little "faff", it probably takes me little more than 20 to 30 minutes each time I go through the process which is never more frequent than once every 2 years.

The price differences are far too big to be down to billing costs alone, the competition is real if you are prepared to work the system.

In reply to DaveN:


Unfortunately I can't have a smart meter as our meter is situated on a thick old stone wall and has no mobile phone signal.

however as I understand it a smart meter would make it easier to monitor our usage and both spread the load on the grid as well as saving money on our bills.

In reply to Jon Stewart:

I heard it was a Conservative conspiracy, solely brought front and centre, to upset you Jon. It's a Terminator scenario, where the Tories send back energy ministers to make sure you, being the sole remaining socialist that hasn't touched up a party member, are driven insane and can't lead the Labour party to 150 years of unbroken rule.

In reply to Ardo:


Where did you hear that?

In reply to David Martin:


The market doesn't compel you to do anything, which is the point. It opens up what is done to *rational* market forces; and it opens up opportunities to use *psychological* market forces based on poverty of information and manipulation of demand to influence behaviour: this is the industry known as marketing.

I'm all for using market forces - the real kind, where the desire to make more money brings about productivity and innovation - to improve our energy supply: to make it cheaper, and to make it greener. I don't know enough about the economics to say how this is best done, but I would guess that if you have different *producers* of electricity competing to sell their electricity to the grid, then competition can drive up efficiency. They're selling a real thing which is a limited resource, so a market is a good way to get people producing that commodity the most efficient possible way and selling it to the consumer (the grid) at the lowest price.

But the most efficient way to produce it isn't renewables, just now. To harness market forces (real ones, not psychological ones) to drive up renewables, by far the most effective way would be a policy about how much of the grid must come from renewables, and how much that must increase each year. Then you get competition amongst the suppliers to get that share of the market, and innovation bringing prices down.

Trying to harness the desire of consumers to have green energy is stupid. It's not something people naturally want - they want electricity, that's the good that's being traded and it's all the same once it comes out of the socket. So the game here is to create demand - you've got to convince people that they want this special electricity, because it offers no rational advantage. Something as flimsy as this is not going to take off. It's all very well to say that consumers *should* "take responsibility" for enormous global issues like climate change, but it's meaningless. Who cares what you think people *should* do. If you want to market forces to drive behaviour that's good for the world, then the market has to work on the basis of demand for real things that people need, like actual electricity.


Because that would be incredibly boring and I don't believe a word any of them say. You think I should review some sickening blurb some hair-gelled wanker in a suit has written to convince me that ElectroFlange PowerSlurp's "values" are something that I connect with spiritually, and then give them my money on that basis? I hope you're joking.

I've used uswitch to get the cheapest electricity. But I think it would be cheaper if there was no fake market in the distribution to the consumer: the vendors have nothing real to offer the consumer except electricity, a fungible good. All the marketing that is required to make psychological non-products to trade, all the call centres, all the shite, created hundreds of times over to sell the same thing which everyone needs, costs money. And people have to do these atrocious meaningless jobs in marketing products that don't actually exist, living and eventually dying with the knowledge that their work brought nothing to the world but misery. Or just mild irritation, which is probably more humiliating.

In reply to SDM:



You have to remember though, if a 90 yr old, blind, deaf, lesbian, Somali immigrant, with no phone, no broadband, no children to help them switch, cannot use the system then what use is it?



Apart from complain on the internet to anyone daft enough to listen.

In reply to Jon Stewart:

That it is a Conservative conspiracy or that you haven't touched up party members?

In reply to ian caton:

Why? If the producers were in competition to sell to the grid, but the distribution was a single infrastructure with no competition at the consumer level, and the company running the distribution was regulated (being a monopoly, it would be a bit silly to let a private company charge whatever they liked, wouldn't it), what would force prices up?

Why wouldn't the fact that we have all the bullshit that the fake market entails (the marketing, the call centres, the services to help the market work, etc) make it cheaper?

In reply to Ardo:

Both are true. Although it's not really a conspiracy, just a shit policy.

In reply to Jon Stewart:

It works for some, so why deny them it?

In reply to Big Ger:

I'm saying that everyone's electricity would be cheaper, and there would be much faster transition to renewables if the fake "market" was scrapped and electricity was supplied by a state regulated distributor at a single rate, and there were targets for renewable proportion of the electricity in/on the grid that could actually be worked to systematically.

I'm saying it doesn't work. The fact that some people like being able to choose "good electricity" or that people who switch regularly save money compared those who can't be arsed and get lumbered with a rip-off tariff doesn't show that anything's working. It just means that many people don't question the ridiculous idea of introducing fake markets into natural monopolies, and are happy to believe that a price is good just because it's cheaper than an artificially created comparator.

In reply to Jon Stewart:


Interesting. What makes you so certain of this? Are you guaranteeing there will be no strikes? That management will strive to be efficient knowing they have no one to be compared too?


But, obviously, it does work. Just not the way you want it to be run, as a socialist monopoly.

In reply to Jon Stewart:

Do you think the Scottish Governments plan to set up a state run, not for profit supplier will help cut bills?

http://www.bbc.co.uk/news/uk-scotland-scotland-business-41579842

In reply to Jon Stewart:

Maybe, but I can't see anything in your model to keep the costs of the distribution company down, and regulation down.

The opportunity for corruption would be high.

Nothing to force prices up but nothing to make them go down.

There is no Darwinism in your model. Different retailers have different models of buying, spot/ forward, different cost structures. Some work better than others.

Over and out

In reply to Jon Stewart:

I don't think electricity would be cheaper, everyone would pay the same price. At present those who have never switched or fixed at a higher rate, subsidise those who annually switch at the lowest rate.

The electricity companies have their margin, know historically lwhat proportion chase deals or do nothing and set their rates accordingly. There might be a slight admin cost saving which will be negligible compared to their overall business costs.

That said it doesnt mean it couldn't be better. A standardised price system that everyone has to follow, so you can compare easier etc..

In reply to Big Ger:


That's how National Grid operates. OFGEM sets the regulatory framework which dictates the rate of return. No reason it wouldn't work with generators and distributors.


Is that how you view the motorway network, or the police? A socialist monopoly?

In reply to MonkeyPuzzle:



All public sector organisations are horrendously inefficient.

Look at the state of the NHS. We can’t let the government run the power networks, power has become far too important now.

Imagine if there were the power cuts we had in the 70s nowadays. There would
Be rioting in the streets and the banks would leave London by the end of the year. Hospitals would be in severe problems and cancelling operations left, right and center.

We have one of the most robust well engineered power networks in the world, it needs to be run privately for a profit.

In reply to DancingOnRock:


Why?

And anyway, isn't there a difference between the companies who sell us energy and the people who actually run the system it's transmitted/transported through?

In reply to DancingOnRock:

Due to coal rationing because the Tories wouldn't offer the miners a decent pay rise.

A legacy of the CEGB!

With all the profits going to Germany and France.
It needs to be run publicly for a profit, with all the profits going to the UK Treasury.

In reply to DancingOnRock:


I've worked in both the public and the private sector. When I moved to work for a huge company, part of a massive transnational, interested only in profit despite lying about how much it cares about healthcare, I expected ruthless efficiency. What did I get? Exactly the same as the public sector. I work on an IT system from the 80s (white on black, DOS type thing), I hand-write forms in triplicate, I see resources wasted left right and centre every working day...it's not worse than the public sector, it's exactly the same.


It's underfunded, yet still delivering, albeit on goodwill. Look at the market model of the USA: far less efficient. And all the quality healthcare, all the hard stuff, the training, the cutting edge procedures, brilliant people making advances in healthcare: all done by the NHS while the private sector does a few hip replacements and cataracts because they're easy.


Other than resorting to the argument: "if it's nationalised, it simply cannot work, remember the 1970s" can anyone explain how this utter catastrophe is preferable to having a single supplier whose job it is to supply electricity, which is overseen by government, on behalf of the consumer?


Why? All you've done is regurgitated a list of cliches that you think are evidence that the private sector is better but are nothing of the sort, they're just cliches. But for some reason, they are cliches that people believe, because they can't be bothered to think.

And anyway, the argument here isn't about nationalising energy production, I think there may be market forces which work in favour of energy production, but not distribution - see my response to Big Ger.

In reply to Big Ger:


Why would there be strikes? Are there strikes in the water companies? The inefficiency in the fake market model is all the marketing, all the duplication of administration across every company. Why would a regulated supplier be more inefficient?


No. You haven't followed the argument. I'm saying that there may be good reasons to run the production of electricity by a market, because something real is being traded. If you're buying electricity for the grid, and you have to achieve reliability and cost and green targets etc, then there can be genuine competition between suppliers. But in the distribution, all the electricity that comes out of the sockets it is the same, so it is a *natural* monopoly, not a "socialist" monopoly. The so-called market at the distribution end is fake.

I am not in favour of imposing a state monopoly in an area where the market does a better job. For example, in food, I don't want government issued food parcels delivered to everyone, I want to be able to choose the food I eat and buy it in a market (although I'd like it to be heavily regulated so it's not a race to the bottom of who can produce the shittest chicken nugget for a fraction of a pence). Not so electricity, the reason I don't want a market is because there isn't any place for one. I don't want a choice of electricity, because that is meaningless. The market is market in obfuscated information, it's fake, and it's shit.

In reply to Jim C:



Don't know enough detail. Sounds good on the surface.

In reply to MonkeyPuzzle:


History would suggest otherwise.


I hardly consider the police socialist, and the motorway is provided by a number of companies.

In reply to Jon Stewart:

History mate, history...

https://en.wikipedia.org/wiki/Three-Day_Week


Opticians?

In reply to Jon Stewart:


Check the regulated company and regulated company owner on the relevant websites.

Once you have a licence energy, anyone can do it. So you may be buying it from someone who has very little experience of either energy or running a company. How long has Ltd firm been in business has Co Director got industry experience.

If you can't be bothered with that then just go for a brand you know or can check via TP review sources.


In reality how much to expect the "efficiency of sale and distribution" (as opposed to production) expect to actually save you? If your tariff is recent you may save 5% if lucky, if an old tariff then perhaps 10-15%. As a single person I was on a tariff over 10 years old and was looking at 1-2% savings as I don't use enough energy for anyone to discount what I buy.

I think usage has a far greater effect than many other things.

It's just something to distract you and keep your eyes away from matters that really concern you and stop you getting off your arse to do something about the inequities of modern life and society...

In reply to Big Ger:


I'm not proposing that the same system and conditions as the 70s are recreated. You're just regurgitating a cliché, it isn't an argument in favour of the fake market in electricity distribution.


The optics market makes no sense either. Would you go to a doctor who was on commission for prescribing drugs? On the other hand, you do want a market in glasses, just not eye tests, so the functions should be split with the clinical function under the NHS to get rid of the corruption. (Or you could have a private eye test if you wanted, but I wouldn't choose to go to an optometrist whose salary was paid for out of glasses sales).

In reply to Jon Stewart:


How would you, as supreme controller of the UK Energy monopoly, ensure that the same conditions are not recreated within the provison?

Would you ban unions? Strikes?




Ah, so you do not want a market in electricity, but want to remain free to play the capitalist running dog optical market yourself?

In reply to Jon Stewart:


I was thinking that if they are going to sell renewables 'at cost' ( or as near 'at cost' as possible, then I will not get the cheapest energy from them .

In reply to Big Ger:

This is frustrating. For the nth time, I'm not proposing a state monopoly in electricity, because it makes sense to me that market forces are useful in stimulating innovation and efficiency in the *production* of electricity. If you're buying electricity for grid, it's a limited resource, and you need to consider lots of different qualities such as reliability, meeting renewable targets, and of course price. This market involves competition and the associated pressure to force innovation up and prices down. I am not making an anti market, state control argument. Is that clear now?

However, when it comes to distribution, it's not a real market, it's a fake market and as such it doesn't drive down prices by competition, because there is no real competition. Unlike in the production market, once the electricity is on the grid, it's all the same. There's nothing to compete on, if the market was real (i.e. If there was adequate information) then all the prices would be the same. But what we have is a bizarre nonsensical sham market in which some people pay more for the same thing to subsidise lower prices for others. That's not a market, that's a load of shit.

Are you completely unable to comprehend that it's not markets that I'm against, it's fake markets which I think are ridiculous because they introduce perverse incentives (to obfuscate information about prices and deliver poor service to put people off engaging). They drive prices up because the consumer has to pay for all the duplication of admin functions, and the endless marketing. Because it's not a real market and the incentives are all to collude in ripping people off, the regulation is also a nightmare.

You would have to be a complete idiot to believe that you can make a natural monopoly more efficient by introducing a fake market that relies on obfuscation of prices to operate - how else can you get different people to pay different amounts for the same thing?

As for the optics market, you don't appear to have read my response. I said I did not want a market in eye tests.

In reply to Jim C:

Agree. That's exactly why you shouldn't rely on the consumer's altruism - to do their bit on an enormous global problem on which they will feel they're having no impact - to create demand for renewables. To do so is to completely ignore everything we know about human psychology. The demand for renewables isn't a natural feature of the energy market, it's something that the human race needs to cooperate on for future generations. This is not the kind of thing that markets deliver: markets deliver the things we need (and want) now as efficiently as possible (and screw everyone else, including your own children). That's why you need to harness the power of the market to get efficency, but it needs to be subservient to higher long term goals. In the case of electricity, that means imposing renewables targets from international agreements, harnessing market forces to meet them.

Capitalists often seem to believe that markets will naturally deliver the higher, long-term goals. But this seems ridiculous to me, when all the incentives are to make money in the short term. If these two things are not aligned, then the short term will always win out. This is a fundamental problem with capitalism, not a reason to scrap it, but a reason for markets to be subservient to higher goals.

The problem of course is who sets and enforces the higher goals, which is where the flaws of democracy (i.e. the natural inability of human beings to plan for the long term and see the big picture) stop anything working properly and you're left praying for that benign dictator who never seems to show up...

In reply to Jon Stewart:


I actually disagree on this point. It's the cost of wholesale energy that has been driving costs up and up (or more used as the excuse for it). A lot of that is due to having the same companies in generation and distribution leaving the market liable to fixing, but I don't think that's completely solved by having these private-owned producers selling to either a majority state-owned company or purely nationalised industry transmission/distributor. That interface; private selling to public, or private selling to regulated monopoly, is one notoriously open to inflated prices. With the right targets set for it, I don't see any reason why a majority state-owned generator couldn't find the right efficiencies, safety and environmental performance, and yet be more easily influenced into investing in the kind of new generation that is demanded at the time. You don't need to be at the bleeding edge of innovation either - let other countries test technology out and find the bugs before adopting what works.

In reply to MonkeyPuzzle:

All sounds fair to me. The only part of the system I have experience with is the distribution non-market, which I've argued is obviously bullshit (I say "argued", all I've done is re-stated the same thing several times to people who said "remember the 70s?" even though I indicated in the OP that I was already perfectly aware of this irrelevant cliché). I'm quite prepared to believe that there are ways to use market forces in the production of electricity, but I'm not particularly wedded to the idea I've given of private producers selling to the nationalised/monopoly distributor.

There must be countless decent models that have different advantages and disadvantages. But having a plethora of different distributors who rip-off customers on pre-payment meters and those without the will or nous to switch, in order to subsidise "deals" for those who do, entailing millions spent on duplicating identical functions and offices full of prats thinking up slogans for nauseating TV ads is a shit one.

In reply to MonkeyPuzzle:


Wholesale costs are generally falling - Dieter Helm's report, published last week, placed the blame squarely at the government's door for confused, inconsistent and ill-informed policies.

For example - mandating Smart meters in every property for both gas and electric. For example in Germany they only install electric meters (as consumption is easier to influence) and for people consuming over a certain threshold. We've got to install them in EVERY house for both fuels (quite apart from the fact the business case is bullshit).

In reply to andy:


Indeed they are. However consumer prices never seem to track them downwards, only ever when they go up.

In reply to andy:

Gas consumption is really easy to influence - turn your thermostat down.

In reply to MonkeyPuzzle:


Well, apart from the cuts that all suppliers made in early 2016, which was the first change since late 2013 - memories are remarkably short when it comes to energy price changes. Plus the price of fixed price deals absolutely tanked in 2015-16 - as suppliers chased falling wholesale prices down.

In reply to Neil Williams:


Yes, sorry - what I meant is you can see the instant effect with a smart meter of switching off electrical appliances etc - other energy efficiency measures (turning thermostat down, insulation etc) don't show instantly on the display, so require education rather than illustration.

In reply to andy:


When I switch a light off I notice the effect instantly.
I just don't get 'it' with these smart meters.

In reply to Lusk:



Me neither, to be honest - but the government's business case assumes everyone's consumption will reduce by 11% as a result of having one.

In reply to andy:


Ah yes, it would appear I talking bollocks. Whoops.

In reply to Jon Stewart:



Turns out the government have been advised the same by their own review: http://uk.businessinsider.com/uk-energy-cost-fees-high-2017-11?r=US&IR=...

In reply to Lusk:
TBH I'm less bothered about the pretty pictures and more bothered about being able to pay monthly actuals without having to be bothered crawling around reading meters myself.

I really dislike the payment plans and prefer to pay for what I have used each month and manage spreading it myself.

In reply to Neil Williams:



Yep, I think that accurate bills and not having to read your meter is the main benefit for most people.

In reply to Jon Stewart:

The energy market simply doesn't work.
Customers bills are designed to be illegible, because if we could all understand them, everyone would simply go with the cheapest provider.
When it was a nationalised system it " just worked" you could see how many kilowatts you had used plus the total price and the price per kilowatt.
Some systems work better on a national scale and publicly run.

In reply to MonkeyPuzzle:


Bravo!

In reply to Jon Stewart:


Best if they introduce real competition then.


Want the best bits for yourself eh?

In reply to Big Ger:

I don't even know what you're on about.

In reply to Jon Stewart:

Ah, you're playing that old "get out of jail free card" eh?




(I was pulling your leg old son, relax a bit.)

In reply to Neil Williams:


And put on a sweater ( or two) even the priciest sweaters pay you back on energy bill savings in a very short time.
(the clue is in the name as I often point out to my wife , and also helps if you put a lid on cooking pots and turn the gas down , that works wonders too, as does just boiling the water you need for a task, not a full kettle all the time)

In reply to MonkeyPuzzle:

Any article that has a title "Steam rises from the cooling towers of a coal power plant. " and then shows water vapour coming out cooling towers, and waste gases coming out of the chimneys , is probably not worth reading.
( maybe someone should tell them steam is invisible , but at least a good place to try to take a picture ( of an invisable target) might be in the turbine hall.

In reply to andy:


Nothing like spending £12 Bn as a result of pulling a figure out of ones bottom. That’d be like going to war over evidence of WMDs plagiarised from the movie “The Rock”...

In reply to Jim C:

Yes, that's a wonderful reason for not reading analysis of the findings of a government-commissioned study undertaken by a respected professor of both energy policy and economics. Because the picture has the word "steam" under it.

In reply to andy:


To me that seems achievable, modest even over a reasonable time frame despite the relatively gentle nudge. There's a lot of stuff in our homes consuming 24-7 at relatively low levels but always on. 'Smart' meters and the curiosity they seem to inspire in people will see a lot of these little leaks (unused chargers, always on computers, standby electricals) hunted down and eliminated which surprising as it seems will get many (gas/oil heated) households a good way toward that 11%. The rest of the saving comes from adding value to a more efficient purchase when the time comes whether it be different bulbs, a better insulated fridge or a more efficient dishwasher. Of course some of these savings are not quite all they seem, for example gas heated water can dramatically cut washing machine electricity consumption and in winter parasitic thermal losses from electricals top up central heating when it's in use but in summer and when the house is empty they're still real losses. I'm more skeptical about the longevity of the effect, whether wasteful old habits return once the novelty wears off.
jk

In reply to Jim C:

Water vapour is 'invisible'. If you're going to be pedantic get your facts right. While arguably inaccurate 'steam' is very clearly commonly used and understood when describing billowing white clouds of warm/hot condensate.
jk

In reply to Root1:



You do know that the information on energy bills is dictated by the regulator, right? Nonsense like “tariff comparison rate” and a potential switching saving based on a forward projection that may bear no resemblance to reality is all specifically required by Ofgem.

In reply to Jon Stewart:


The counter argument to this is that the supply of electrons is only one aspect of the supply relationship, the other aspects of supply include quality of communications, responsiveness etc. These are the differentiated services that you are paying a margin for. The same as when you get on a plane - fundamentally you are paying to transport from airport A to Airport B - the difference in price between business and economy seats are the ancillary services that sit around the primary product/service.

Regards
Dave

In reply to Lurking Dave:

The reasons this counter argument isn't compelling are that
A. The same company charges different rates with no additional services
B. There's no difference between the companies in the level of incompetence (because they make money out of people *not* engaging with them and being left on default rip off tariffs)

In reply to Jon Stewart:



I agree with a lot of what you say, but there are cost differences with tariffs that mean they are set at different rates.

Generally the shorter you fix your prices for, the cheaper it is, as it’s cheaper to hedge shorter terms. Ofgem’s insistence on only comparing one year costs can hide this, but if you want certainty of prices for longer, it costs more.

If you’re prepared to have your bills etc online then that’s cheaper, and if you pay by direct debit then the risk is lower so you’ll get a discount. And if you have both gas and power it’s cheaper because the supplier makes more money.

In reply to andy:


I see no reason why it's a good thing to be forced to gamble on my electricity bill, especially with no information about the odds. In a real market, the price is the intersection of the supply and demand curves, and it moves over time. That is the price I want to pay for my electricity, I have no interest at all in gambling.


Discounts for these things make sense and aren't what I'm arguing are fake and perverse.

In reply to Jon Stewart:


Don't hedge your prices, then. It is not compulsory, I don't bother either.