E.ON owns many wind farms around the UK and you state you supply your customers with 100% Renewable Electricity. Strike prices for wind power have been below £100 per MWh, and recently below £50. This equals 5p/kWh. There are obviously add-ons to that price but even so, the price of renewable generation is way, way below that of the likely electricity price from 1 October (which is probably over 50p per kWh). I shall be seriously annoyed if I have to pay 50p+ for power you generate far, far cheaper. It may be that you have to pay the government the difference between the Strike Price and the price you are paid. I don’t really care. All I know is you should be selling me electricity much cheaper. Please do that.
A separate part of Eon produces electricity and sells it into the electricity wholesale market. The retail supplier arm of Eon buys its electricity from that wholesale market as do the other retail suppliers.
In essence you are right - but the basic point is that the electricity wholesale market rigs the prices against the interests of customers.
Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
@meldrewreborn:
You are correct in stating that the electricity wholesale market rigs the prices against the interests of customers. This needs fixing urgently. The UK Government are carrying out a review and will be looking at this topic, but proposals are not due until next year at the earliest, which is too late!
Eon may not actually produce the electricity themselves, perhaps they just purchase certificates from renewable generators. They are still able to make the claim.
A separate part of Eon produces electricity and sells it into the electricity wholesale market. The retail supplier arm of Eon buys its electricity from that wholesale market as do the other retail suppliers.
EonNext needs to buy it's electricity direct from Eon's own wind farms, at a cost of less than 10p a unit, not the 52p in the new price cap. It's ridiculous.
but it suits Eon to work in this fashion. It just allows excess profits for the generation arm of Eon.
We need market reform and perhaps the threat of nationalisation if the generators don't play ball. I'm all for a fair profit, but not to the current excess.
@meldrewreborn Thanks for the explanation. It still doesn't explain why the price cap should affect those on supposedly 100% renewable electricity-
It has been touted that the price cap was due to increase in wholesale gas prices. What has gas got to do with renewables?
Electricity is purchased from the wholesale market, and all the generators have increased their prices into that market. So eon could be making excess profits from wind generation in that subsidiary company, while buying energy from the market in their Eon Next subsidiary.
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