Wednesday
Nov222017

A state of the art deregulated water market.

An investigation by the Guardian has found that 10 of the 12 water companies are still using water diviners, a practice deemed by a leading academic at Leeds Universtity to be akin to witchcraft. 

Rumours that they also stick moistened fingers in the air to estimate bills have still to be confirmed.

 

 

Monday
Nov202017

What is the difference between an SVT, an ST and a FTDF ?

Most widely publicised energy news concerns domestic customers and today is no exception with BG announcing that they will no longer put new customers onto a Standard Variable Tariff or SVT.

This as you will know from reading ESS news (9th May, 2017) is the type of billing structure that will be capped under our oxymoronic "regulated deregulated" energy market.  The regulator will impose a Safeguard Tariff ST which will limit the worst excesses of SVTs.

So what, you may ask, do customers who for what ever reason want to exercise their free choice and remain on an SVT with ST, get instead from BG?  

Well the answer is that they will be moved to a Fixed Term Default Tariff or FTDT.

So just delete the "oxy".

Wednesday
Nov082017

SSE and nPower 

If SSE and nPower finally get the go ahead from the CMA and Ofgem we could see a new leader in the race for domestic market share in the UK energy industry.

The new group would enjoy 24% of the market. So when does a large market share start to affect competition?

One measure is the Herfindahl-Hirchman Index, a simple mathematical model whereby the market shares of paticpants are squared and then totalled. An index of 10,000 would be a monopoly of a single 100% share. and 100 particpantts with 1% each, an unlikely scenario, would result in a HHI index of 100, so the lower the HHI the better for competition.

1500 is generally regarded as the tipping point where a market could be regarded as unbalanced, so where are we now and where would we be if the SSE nPower merger goes ahead?

Today the index is at 1,378 and post merger that would rise to 1,658.

We await developments with interest.

 

Monday
Nov062017

Offshore Investments pay off

No this article does not concern Belize or the Cayman islands but the progress being made in the UK offshore wind industry and particular the expertise being developed at home that is now being exported as far afield as China.

Renewable UK has just published a report catchingly titled " Offshore Wind: regenerating regions - Investment and Innovation in the UK"    ....which just about says it all, but its main findings are that; we are very good at what we do; the cost is coming down dramatically and as well as helping the UK meet renewable targets, exporting the technology will also boost our balance of payments.  

Finding the benefit in that isn't taxing at all.

Thursday
Nov022017

Ofgem State of the Market Report - 2017

The report runs to 108 pages and was presented  at a launch event on 31st October by Joe Perkins - Chief Economist and Analysis Guru. (not his official title). His presentation ran to 12 pages so let us just report on the main findings here:

1. Those who shop around get a better deal

2. Government measures to drive decarboniastion of the electricity generating sector and for ensuring security      and resilience of future supplies, have incurred a higher cost than necessary. 

That's it really, but for those wanting a good holiday read they can find the report in its entirety here.

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