Is your energy supplier going bust?

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lpm
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Is your energy supplier going bust?

Post by lpm » Sun Sep 19, 2021 9:53 pm

1) Invent silly fake "competition" between 55 companies

2) Make the public waste their time swapping around every year for a better rate

3) Impose price cap

4) See global gas and electricity prices soar above the cap

5) Watch while a dozen companies go bust, with someone in the FT predicting 49 of the 55 could be bust within a year
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sheldrake
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Re: Is your energy supplier going bust?

Post by sheldrake » Sun Sep 19, 2021 11:17 pm

But renewables.

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lpm
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Re: Is your energy supplier going bust?

Post by lpm » Mon Sep 20, 2021 6:59 am

Yes, exactly. The UK is paying a heavy price for not having enough renewables.

The rise in electricity prices is blunted, being lower than the rise in gas. But still well beyond Ofgen's price cap. And even the restricted rise to the price cap is enough to add over £100 to the amount frugal customers will pay in 2022 (coinciding with the increased tax rate).

We urgently need to be free of energy imports. Long term the higher prices obviously makes investment in offshore wind, nuclear and even tidal more attractive.
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plodder
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Re: Is your energy supplier going bust?

Post by plodder » Mon Sep 20, 2021 7:25 am

yup, our reliance on gas isn’t helpful right now.

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Re: Is your energy supplier going bust?

Post by plodder » Mon Sep 20, 2021 7:43 am

although it sounds like a good idea to mend the Big French Extension Lead and not let it get all frayed up next time.

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lpm
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Re: Is your energy supplier going bust?

Post by lpm » Mon Sep 20, 2021 8:08 am

We burn that down every year or two. We've still got the Norway ones, wonderful country, best people in the world, please send us some electricity.

Amusingly, I'm on a 100% renewables tariff. Which is, of course, a sham. My provider puts prices up because gas prices have gone up, but obviously can't admit that, so has to invent a little fake explanatory email saying it's due to overall market conditions. And now it's going bust.

Less amusingly, yet again we've privatised profits and handed executives huge bonuses for a few years for their genius in making their energy company highly profitable, then when it goes bust we socialise the losses.
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Re: Is your energy supplier going bust?

Post by Bird on a Fire » Mon Sep 20, 2021 8:37 am

plodder wrote:
Mon Sep 20, 2021 7:25 am
yup, our reliance on gas isn’t helpful right now.
Entirely predictably. We've known for decades that fossil fuels tend to come from countries that aren't our friends. Investing in renewables would be a much more sensible use of national security money than buying aircraft carriers with no aircraft, nukes we can't use, etc etc.
You can shove your climate crisis up your arse!

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Re: Is your energy supplier going bust?

Post by lpm » Mon Sep 20, 2021 8:45 am

It's almost as if powerful vested interests have manipulated governments into continuing a destructive status quo.
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Re: Is your energy supplier going bust?

Post by Sciolus » Mon Sep 20, 2021 11:09 am

lpm wrote:
Sun Sep 19, 2021 9:53 pm
1) Invent silly fake "competition" between 55 companies

2) Make the public waste their time swapping around every year for a better rate

3) Impose price cap

4) See global gas and electricity prices soar above the cap

5) Watch while a dozen companies go bust, with someone in the FT predicting 49 of the 55 could be bust within a year
Isn't this exactly what the tories said would happen if Corbyn introduced a price cap?

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Re: Is your energy supplier going bust?

Post by noggins » Mon Sep 20, 2021 12:04 pm

Is there any logic to the proliferation of energy suppliers? Seems all they can really do to differentiate themselves is gamble differently on future prices. And if you were a genius at energy futures, why bother with consumers, just be a trader/speculator.

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Re: Is your energy supplier going bust?

Post by lpm » Mon Sep 20, 2021 12:32 pm

Time frames, I think. You can gamble knowing you'll win for 9 out of 10 years. Get a good run of luck and you're raked in enough bonuses before you go bust.

Same model as Northern Rock. Give customers attractive rates, while borrowing wholesale at cheap but potentially volatile rates. Look like geniuses for 10 years while the wholesale funding stays secure and ever cheaper. Go bust when the shock to the system eventually hits, but pick up a gig as a climate denier in The Telegraph and the GWPF.
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Re: Is your energy supplier going bust?

Post by noggins » Mon Sep 20, 2021 1:34 pm

Yes - but is there a cover story ?

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Re: Is your energy supplier going bust?

Post by lpm » Mon Sep 20, 2021 2:00 pm

The cover has been "innovative green tariffs" for the last few years. The big six trapped in their old ways, clever new companies saving the planet.
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Re: Is your energy supplier going bust?

Post by El Pollo Diablo » Mon Sep 20, 2021 2:07 pm

My energy supplier is bulb, so yes, my energy supplier is going bust.
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Re: Is your energy supplier going bust?

Post by IvanV » Mon Sep 20, 2021 2:22 pm

lpm wrote:
Mon Sep 20, 2021 8:08 am
We burn that down every year or two. We've still got the Norway ones, wonderful country, best people in the world, please send us some electricity.

Amusingly, I'm on a 100% renewables tariff. Which is, of course, a sham. My provider puts prices up because gas prices have gone up, but obviously can't admit that, so has to invent a little fake explanatory email saying it's due to overall market conditions. And now it's going bust.
Utterly delicious how these sham 100% renewables tariffs get exposed when the gas price goes up. I read the other day that the Dutch railways run 100% on wind power. But I haven't noticed the trains stopping when the wind stops blowing.

The 1.4GW North Sea Link Norway-UK electricity interconnector is more or less built but not open yet. First trial operations expected next month with full operations expected in Q2 2022.

But links to Netherlands, Belgium, and a 2nd French link are all up and running at the moment (3.0GW). Also 2 links to Ireland (1GW), which is managed as an all-island single electricity market, but those mostly export.

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Re: Is your energy supplier going bust?

Post by IvanV » Mon Sep 20, 2021 2:23 pm

Sciolus wrote:
Mon Sep 20, 2021 11:09 am
lpm wrote:
Sun Sep 19, 2021 9:53 pm
1) Invent silly fake "competition" between 55 companies

2) Make the public waste their time swapping around every year for a better rate

3) Impose price cap

4) See global gas and electricity prices soar above the cap

5) Watch while a dozen companies go bust, with someone in the FT predicting 49 of the 55 could be bust within a year
Isn't this exactly what the tories said would happen if Corbyn introduced a price cap?
Certainly (3) to (5).

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Re: Is your energy supplier going bust?

Post by headshot » Mon Sep 20, 2021 2:46 pm

When we moved house in May we notified our small supplier about the move. They didn’t respond to any of my three emails and continued to take the direct debit in June until I cancelled it.

As far as I know, we owe them about £180, but they haven’t contacted us to settle the bill…

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Re: Is your energy supplier going bust?

Post by IvanV » Mon Sep 20, 2021 2:54 pm

headshot wrote:
Mon Sep 20, 2021 2:46 pm
When we moved house in May we notified our small supplier about the move. They didn’t respond to any of my three emails and continued to take the direct debit in June until I cancelled it.

As far as I know, we owe them about £180, but they haven’t contacted us to settle the bill…
Suppliers can object to you taking out a contract with another supplier if you haven't settled their bill. And generally will. So they were completely asleep on the job.

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Re: Is your energy supplier going bust?

Post by El Pollo Diablo » Mon Sep 20, 2021 2:58 pm

I'm in the opposite problem, which is that I have £350 credit sat with bulb and if I ask for it back, I'll just help them go bust faster. I've seen It's A Wonderful Life, I know how these things work.
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Re: Is your energy supplier going bust?

Post by El Pollo Diablo » Mon Sep 20, 2021 3:05 pm

As long as I don't end up with either Co-op energy or nPower, I'll be happy. Okay, I'll be content. Fine, apathetic. Minimally hostile then, whatever.
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Re: Is your energy supplier going bust?

Post by discovolante » Mon Sep 20, 2021 3:16 pm

El Pollo Diablo wrote:
Mon Sep 20, 2021 2:58 pm
I'm in the opposite problem, which is that I have £350 credit sat with bulb and if I ask for it back, I'll just help them go bust faster. I've seen It's A Wonderful Life, I know how these things work.
But will leaving the credit in STOP them from going bust?
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Re: Is your energy supplier going bust?

Post by sheldrake » Mon Sep 20, 2021 3:19 pm

What is the mix of sources this panel believes is optimal ? (I assume nobody here believes 100% renewable is viable, but I could be wrong. Obv I'm not including nuclear power within 'renewables')

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Re: Is your energy supplier going bust?

Post by sheldrake » Mon Sep 20, 2021 3:26 pm

lpm wrote:
Mon Sep 20, 2021 8:45 am
It's almost as if powerful vested interests have manipulated governments into continuing a destructive status quo.
This is a conspiracy theory. Every big corporation in the western world is tripping over itself to try and prove how green it is. The *tory* party want the last new fossil fuel car to be sold in the UK 8 years and 3 months from now.

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Re: Is your energy supplier going bust?

Post by IvanV » Mon Sep 20, 2021 5:49 pm

El Pollo Diablo wrote:
Mon Sep 20, 2021 2:58 pm
I'm in the opposite problem, which is that I have £350 credit sat with bulb and if I ask for it back, I'll just help them go bust faster. I've seen It's A Wonderful Life, I know how these things work.
These days, the government protects consumer credit balances with energy suppliers, and has the power to charge a levy on other energy suppliers to fund it. I don't think it is necessarily completely 100% protected, but you are probably OK. There would certainly be a huge scandal if loadsa suppliers went bust and lots of customers lost their credit balances. I think back in the days, a small number lost a bit of money, but not enough for it to be noticed above the parapet.

Five years ago, when you were still at risk, I would have said, reduce your credit to the minimum as fast as possible. Your supplier is required to refund the part of your credit balance which is in excess of something or other, but I forget the details and can't be bothered looking them up. Though there is the risk that they would just ignore you when they were on the point of going bust anyway,

In the days when you were just an unsecured creditor if your energy supplier went bust, I was employed by Ofgem to advise them on this. They wanted a financial indicators they could monitor, once a year, taken from published accounts of small suppliers, to assess if such a supplier was at risk of going bust. I built a little model with both explicit scenarios and monte carlo elements to prove that was no such magical indicator. I tested it with scenarios similar to the current large input price shock. I showed that such companies could arrange their affairs such that almost anything happened to any plausible financial indicator you chose, based on published accounts, until it was too late. If they wanted an indicator that would actually work, they would have to do something similar to what Dept for Transport does with the train companies - require data from management accounts and monitor it monthly - and train companies have large bonds on top of that, for example to protect season ticket funds. Though they would have to use a somewhat modified indicator than is used for train companies, to take account of the fact that energy supply businesses their own distinctive seasonality patterns.

Since they didn't want to get into that detailed financial viability monitoring, I suggested a variety of models for protecting customer funds instead. Fortunately, they believed me, and soon implemented such a system just in time for the next rash of supplier failures, which I think was around about 2016 or so. Though I'm far from convinced that the model they have chosen - a levy on all other suppliers to fund shortfalls after the event - is the fairest. Whilst they have recently upped the minimum financial strength requirements for suppliers, it remains the case that supply companies taking excess risk can dump the cost of their failed risk-taking on everyone else.

While I was doing this, I discovered - using publicly available information - that the owner of a medium-sized energy supplier had a variety of other interests, including Formula 1 racing cars. I was not able to satisfy myself - at that point in time (we are talking early 2015) - that the energy supply company was insulated from the risk of these other much more risky businesses. In fact it looked rather that he might in effect have been using the strength of the balance sheet of the energy company - ie credit balances of customers - to enable himself to finance these other interests. After all, he did infamously have to sell some shares in the energy company to finance his house. So I definitely did not use them as an energy supplier, at least at that time, and would happily tell anyone who asked the situation. In fact, other energy suppliers were making complaints about their antics, because of the risk of bringing the sector into financial disrepute. The Formula 1 business went bust, and there are now other major investors, like Mitsubishi, who I think would insist on sufficient segregation from the risk of his side interests.

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Re: Is your energy supplier going bust?

Post by Gfamily » Mon Sep 20, 2021 7:09 pm

El Pollo Diablo wrote:
Mon Sep 20, 2021 2:58 pm
I'm in the opposite problem, which is that I have £350 credit sat with bulb and if I ask for it back, I'll just help them go bust faster. I've seen It's A Wonderful Life, I know how these things work.
Reminds me to submit our meter readings today - having been away for the last couple of months I'd rather we were assessed on our actual consumption rather than an estimate
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