Gas "Market" ?

[Observer II]

How many gas supply pipes do you have to your property ?   I ask this, because there were multiple companies out there bidding for your custom by ever cheaper prices; but assuming you switch, how does the new company get it's gas past the existing gas in your supply pipe ?    The answer of course is, it doesn't, it's the same gas, from the same supply chain, but with the addition of notional competition between suppliers.  How they achieve this is open to question, but I can only assume they can reduce costs within their organisation through efficiencies , but it's the same gas that's flowing through your pipes.   So, I have to conclude that the whole concept of a privatised market to introduce competition is a totally notional construct, designed to create competition that doesn't really exist.  With energy supply to your property being a fundemental  requirement, it would seem necessary to guarantee that supply to all, which suggests one single supplier, which in turn suggests a State owned system, with the possibilty of State control of prices.  The other question with this issue is why our Government doesn't safe guard supply by developing National self sufficiency in energy, which may mean a switch from gas to electricity, and some major developments of reliable alternate supply options, which don't depend on the sun shining or the wind blowing.    

[Confused52]

Obs, You are over simplifying and falling back on nationalisation as you often tend to.

There is a system whereby the country is split into gas supply regions, each can have a different mix of gas sources depending who wants to sell their gas. Retail companies buy gas from suppliers to put into to the distribution network and be used by their customers. As a consequence each region has a different calorific value foe each "gas day".

The storage facilities are much reduced these days following the failure of the Centrica North Sea reservoir so there are only medium term storage facilities most have 20 or less days capacity and can only supply a fraction of the demand in addition there are three LPG terminals which can store and supply gas. The current problem is persuading tankers to come here rather than Japan where the price paid is higher.

The lack of a national plan is all down to the Green lobby. If we had continued with fracking the prices would not now be as high. If Trump had won the prices would not have been as high. Youth and green lobbies are taking a massive toll on us all.

[Observer II]

Well it's me that's confused,  as the system is clearly one of smoke and mirrors, designed to give the appearance of competition, which in reality can't survive a rise in global supply charges.   I agree with your last paragraph though, the green lobby are making a rod for our backs in the future.     

[ninearches]

We used to have national energy companies that were sacrificed on the altar of privatisation ,profits & shareholders.

[ninearches]

Let's not forget though ,the higher the energy prices the bigger the taxes  to offset covid costs ,& i notice Boris removed one of the pension locks just before these price hikes were announced.

[Confused52]

2 hours ago, Observer II said:

Well it's me that's confused,  as the system is clearly one of smoke and mirrors, designed to give the appearance of competition, which in reality can't survive a rise in global supply charges.   I agree with your last paragraph though, the green lobby are making a rod for our backs in the future.     

In a competitive market consumers are expected to behave responsibly too. If you went to a small company you were going to be taking a risk. Why because the large companies have fixed price contracts for most of their gas so when the spot price goes up only a small fraction of their gas goes up which means that the losses they are exposed to can be managed. That would be thinks like buying futures which guarantee a maximum price. Smaller companies can't afford that as they are trying to undercut the safer players. This is the same in pretty much every market and the problem is that telling consumers to shop around as the media do constantly isn't enough if you do not also educate consumers how to choose. "If it looks too good to be true then it probably is!". The system is capable of providing real competition in truth but real competition isn't the same as no risk for consumers.

[ninearches]

Competition for custom by cutting prices is eagerly championed by price comparison sites who are doing the  championing as much for their own benefit as for the consumers.

[Confused52]

49 minutes ago, ninearches said:

Competition for custom by cutting prices is eagerly championed by price comparison sites who are doing the  championing as much for their own benefit as for the consumers.

I quite agree that they are part of the problem. They do not usually have comparisons of all the competitors either; you can often detect a bias which varies by comparison site - they do indeed slant it for their own benefit as you suggest.

[Evil Sid]

I'm sure Together Energy will be just fine and be able to weather the storm with a little help from the redwood bank......🤭

[Observer II]

With the prospect of a dystopian future, perhaps solid fuel central heating is a safer bet ?        With doom laden laden predictions of a "Winter of discontent" in our liberal media, I think Joe Public needs to think where their votes are best placed, as imo, none of the range of Parties and politicians in Parliament really have a clue on steering our ship of State; and another hung Parliament would make matters even worse. 

[Confused52]

2 hours ago, Observer II said:

With the prospect of a dystopian future, perhaps solid fuel central heating is a safer bet ?        With doom laden laden predictions of a "Winter of discontent" in our liberal media, I think Joe Public needs to think where their votes are best placed, as imo, none of the range of Parties and politicians in Parliament really have a clue on steering our ship of State; and another hung Parliament would make matters even worse. 

So what do you suggest, beyond thinking. Mass abstention doesn't work as you get the zealots choice!

[Observer II]

We need a reformation - so Reform looks about right.   😉

[Evil Sid]

5 hours ago, Observer II said:

another hung Parliament would make matters even worse. 

Depends on how long you hang em for......🦥

[Confused52]

7 hours ago, Observer II said:

We need a reformation - so Reform looks about right.   😉

Good luck with that -they want PR so you will actually voting for the Greens policies which I thought you were against! I must have been mistaken.

[Observer II]

Blocked in then !    

[Observer II]

Looking like HMS UK is heading for the ice berg -  with a possible energy crisis this winter, due to premature ditching of fossil fuel supplies in favour of green alternatives, which are proving inadequate for the task, add to this the nonsense of EVs, which will still cause pollution to manufacture and the threat of having our gas boilers ripped out; and the future looks quite bleak.   Just hope they have enough gas for my cremation, as I'm beamed up out of the mess.     😉

[Confused52]

Gas is being uses for over 49% of Electricity production as I write, wind is managing 10% or so. That results in a daily rate of gas use for electricity of 82 million cubic metres per day. 119 mcm/day being used for heating, 4.8 for industrial uses and 15 being exported to Europe.  The exports are lower than yesterday but we get 71 mcm per day delivered from Norway. Only 25 mcm/day from LNG tankers.

Hence what we are told, we will not run out of gas we just turn off the exports for Belgium, Netherlands and France. What we are short of is LNG tanker loads, because the Chinese government told their nationalised power generators to buy enough LNG to keep the lights on at any price. If we have a problem then we will make the EU's problems worse but cutting them off but the price is determined by what the EU are paying for our gas I think. We are not importing by pipeline other than from Norway at the moment. That should allay your concerns!!

We need to consider the amount of gas for which the market price is applicable because it is not obvious that it is all of the supply even if firms do not have futures guarantees. 

As small firms fail the large firms take over and the average price of gas goes up by a smaller fraction because a large percentage is gas the own from the fields or from Norway of long term agreements. That is why the Government will not step in to prop up small companies; it is worse for consumers to do so! So our problem is that the risk for Together energy falls on Council Tax payers in Warrington as neither the Government nor private investors have any incentive to keep it going as far as I can see.