Where do the energy suppliers buy their energy from

[The Moose]

Idle Friday morning musings - where do the energy suppliers purchase their gas from.

I'm aware that some companies both produce energy and sell it to end users (be it domestic or commercial), but I'm sure some just act as a middle man.

Who do these middle men buy from?

Is it simply a case of just paying x per unit and charging x + y, or is it more complicated than that with different infrastructure components being paid for etc?

[Mr Overheads]

The energy suppliers buy the energy in the wholesale market (much like buying shares or oil) they then add a margin dependent on the contract length and other risk factors (bit like insurance) and then also add to your bill various standing charges whcih are simpyl pass through costs from the likes of Northern Power, Northern Gas Networks etc for maintenance of "The Grid" etc.

It's extremely complex

[The Moose]

Mr Overheads said:

The energy suppliers buy the energy in the wholesale market (much like buying shares or oil) they then add a margin dependent on the contract length and other risk factors (bit like insurance) and then also add to your bill various standing charges whcih are simpyl pass through costs from the likes of Northern Power, Northern Gas Networks etc for maintenance of "The Grid" etc.

It's extremely complex

It sounds like you've been involved in this game before?!

[Chrisgr31]

Mr Overheads said:

The energy suppliers buy the energy in the wholesale market (much like buying shares or oil) they then add a margin dependent on the contract length and other risk factors (bit like insurance) and then also add to your bill various standing charges whcih are simpyl pass through costs from the likes of Northern Power, Northern Gas Networks etc for maintenance of "The Grid" etc.

It's extremely complex

It shouldn't be that complex though! You bay it for x, pay y to transport, pay z for admin and other costs, sell it for x + Y + Z and some profit. Job done.

The bit that is complex is the cost of generation of the electricity in the first place, due to variables in cost of gas coal etc. But of course energy companies like having a generation to consumer supply line as it makes the work of the controlling bodies that more difficult as all the profit is of course at the generation end!

[camelot1971]

I've never understood why their buyers are so st at their job.

When prices go up, it's because the wholesale gas/electric price has gone up. When wholesale prices come down, the price stays the same or goes up because "we bought the gas/electric on a long term contract and the prices are fixed"

[Some Gump]

Since it's such a simple task, and any monkey could do the job in their sleep - why don't you get a job as an energy buyer then?

[The Moose]

The Moose said:

Mr Overheads said:

The energy suppliers buy the energy in the wholesale market (much like buying shares or oil) they then add a margin dependent on the contract length and other risk factors (bit like insurance) and then also add to your bill various standing charges whcih are simpyl pass through costs from the likes of Northern Power, Northern Gas Networks etc for maintenance of "The Grid" etc.

It's extremely complex

It sounds like you've been involved in this game before?!

Out of interest, have you?

[Mr Overheads]

The Moose said:

The Moose said:

Mr Overheads said:

The energy suppliers buy the energy in the wholesale market (much like buying shares or oil) they then add a margin dependent on the contract length and other risk factors (bit like insurance) and then also add to your bill various standing charges whcih are simpyl pass through costs from the likes of Northern Power, Northern Gas Networks etc for maintenance of "The Grid" etc.

It's extremely complex

It sounds like you've been involved in this game before?!

Out of interest, have you?

yes - been involved for last 7 years see my profile....