Energy prices /profit

Hfd Cattle

Member
Mixed Farmer
Location
Hereford
It's probably been discussed but can someone explain to me in simple terms ....
How is it energy prices are escalating when the suppliers are making huge profits ?

To me it seems their costs aren't escalating but our costs and their profits are ......or have I got it wrong ?
 

DaveGrohl

Member
Mixed Farmer
Location
Cumbria
But it sounds too simple even though it's right ......
....I still struggle to understand why GVT can't or won't sort it out .
The payments we get for our excess solar energy isn't going up !!
You prob aren’t generating enough solar to be able to justify a meter. Anyone generating sufficient leccy with a meter is seeing big increases in prices. As long as they look of course. Inertia is the enemy of profit.
 

DaveGrohl

Member
Mixed Farmer
Location
Cumbria
It's probably been discussed but can someone explain to me in simple terms ....
How is it energy prices are escalating when the suppliers are making huge profits ?

To me it seems their costs aren't escalating but our costs and their profits are ......or have I got it wrong ?
Energy supply companies or fossil fuel companies? Some are both of course.
 

Goweresque

Member
Location
North Wilts
The energy suppliers (ie the people who send you your bill) are making no money at all. They have to buy it on the wholesale market and sell to you subject to a price cap, so the profit margins are thin to non-existent. If energy supplier were making a killing why have so many small ones gone bust?

The energy generators on the other hand are raking it in hand over fist......which includes all the renewable generators as well.
 

fudge

Member
Arable Farmer
Location
Lincolnshire.
The retail energy market doesn’t work in the current circumstances. Small companies contracting to supply stuff they haven’t yet bought leaves a huge amount to chance. Whether it’s renewable, fossil fuel or nuclear there’s not enough capacity for generation in the UK. That leaves the smaller suppliers and therefore their customers between a rock and a hard place. Yet there is still considerable nimby opposition to any of the above forms of generation. Something has to give, a more self reliant UK would have both more nuclear and renewable generation IMO.
 

Steevo

Member
Location
Gloucestershire
It's probably been discussed but can someone explain to me in simple terms ....
How is it energy prices are escalating when the suppliers are making huge profits ?

To me it seems their costs aren't escalating but our costs and their profits are ......or have I got it wrong ?

It costs little more to dig oil out of the ground that is worth £200 a barrel than oil worth £20 a barrel.

Unlike farming where when output prices increase the profit is swallowed up by increased input prices.
 

renewablejohn

Member
Location
lancs
The retail energy market doesn’t work in the current circumstances. Small companies contracting to supply stuff they haven’t yet bought leaves a huge amount to chance. Whether it’s renewable, fossil fuel or nuclear there’s not enough capacity for generation in the UK. That leaves the smaller suppliers and therefore their customers between a rock and a hard place. Yet there is still considerable nimby opposition to any of the above forms of generation. Something has to give, a more self reliant UK would have both more nuclear and renewable generation IMO.
You basically have a cartel of large electric energy producers who can now dictate the electric price as they have suceessfully put out of business the small suppliers who were becoming a thorn in the big energy suppliers. side. It was easily achieved by putting up the gas price over the winter period and because ofgem were so weak they caved in with the energy price cap despite the gas price being manipulated. The gas price is now lower than last September yet another 42% increase in the price cap has been announced. Its an even bigger con as only 40% of electric is generated by gas and of that gas 50% is extracted from UK gas reserves. As for capacity there is massive overcapacity the demand for electric has dropped dramatically over the last decade with a further massive drop since the price increase on the 1st April. If it was not for the 5GW of export through the interconnectors to Europe a lot of generating plant would now be starting to be mothballed.
 

Steevo

Member
Location
Gloucestershire
You basically have a cartel of large electric energy producers who can now dictate the electric price as they have suceessfully put out of business the small suppliers who were becoming a thorn in the big energy suppliers. side. It was easily achieved by putting up the gas price over the winter period and because ofgem were so weak they caved in with the energy price cap despite the gas price being manipulated. The gas price is now lower than last September yet another 42% increase in the price cap has been announced. Its an even bigger con as only 40% of electric is generated by gas and of that gas 50% is extracted from UK gas reserves. As for capacity there is massive overcapacity the demand for electric has dropped dramatically over the last decade with a further massive drop since the price increase on the 1st April. If it was not for the 5GW of export through the interconnectors to Europe a lot of generating plant would now be starting to be mothballed.

And even worse than that….

If you switch suppliers OFGEM are now considering making your old supplier pay your new supplier 85% of the difference in tariff! 😲😵💫

There will be no incentive to switch at all!!

See my post from last week.


After the comments in the River Lugg thread today, comments about Red Tractor recently and corruption/collusion I thought I’d flag this up too…


 

BrianV

Member
Mixed Farmer
Location
Dartmoor
The energy suppliers (ie the people who send you your bill) are making no money at all. They have to buy it on the wholesale market and sell to you subject to a price cap, so the profit margins are thin to non-existent. If energy supplier were making a killing why have so many small ones gone bust?

The energy generators on the other hand are raking it in hand over fist......which includes all the renewable generators as well.
They are but then they made large losses when Covid struck & with our tax system those previous losses can be used to put against & offset more recent profits, changing tax rules to cream off money when profits are being made is far more popular than making them when losses are being suffered by companies!
 

oil barron

Member
Location
Aberdeenshire
It costs little more to dig oil out of the ground that is worth £200 a barrel than oil worth £20 a barrel.

Unlike farming where when output prices increase the profit is swallowed up by increased input prices.
The day rate to hire in a deep water drill ship has gone from $150,000 a day to $500,000 a day. I would say that’s a little bit of an increase there.
 
Hi All, although I am in renewables we are a full consultancy so I am very up to date with the energy market and the current struggles.

There are a lot of issues within the energy market and I'll answer the questions as briefly as I can.

1. some suppliers are still making large profits while a lot of residential suppliers have gone bust? This is due to the price cap - residential suppliers hands were tied as to what they could charge compared to the buy price. commercial suppliers can charge in line with the market

2. There’s not enough capacity for generation in the UK? Not at present, there is enough space but it takes time to plan and build and needs to be private financial backing (that's where I come in)

3. Is the government creaming off the top? That's politics which I don't get involved with

4. If anyone would like the commodity forecasts, I can talk about the commodity market for the next 2 hours until you are all bored to tears
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 79 42.5%
  • Up to 25%

    Votes: 65 34.9%
  • 25-50%

    Votes: 30 16.1%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 6 3.2%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,287
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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