Don't shoot me, I'm only the piano player. I DON'T work for or on behalf of EON.Next, but am willing to try and help if I can. Not on mains gas, mobile network or mains drainage. House heated almost entirely by baby dragons.
Gas and Electricity prices are on the floor
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Level 9210-01-23
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Level 9110-01-23@Mailman
its up to the suppliers how much they hedge and how.
the failure of so many suppliers in 2021 was due to insufficient forward purchasing, and high spot prices unable to be passed by on because of the price caps.
the position now is different but suppliers ability to take advantage is limited by physical limitations - where can you keep the stuff at short notice?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. -
Level 6010-01-23
I'm almost sure that most of these hedging futures probably don't involve firms like Eon Next storing anything at all - it is just the equivalent of people pre-ordering 'Spare' months in advance of getting the thing. i.e. a contract to be supplied with something (like gas) in the future at a certain price/therm. -
Level 9110-01-23@Mailman
spot prices are usually for quick delivery but can the utilities take advantage if there is no storage possible? -
Level 9210-01-23@meldrewreborn
When I worked for a hospital, we had to order heating fuel and generator fuel. Sure, you can buy it spot price if you need it in a hurry for small quantities, but when you are trying to ensure you have a constant supply all year round and not too much variation in price, we always ordered a year ahead, depending on current price charts to pick the optimum time. We'd order a hundred thousand litres of kero a year and 2000 litres of red diesel, but certainly couldn't store that much on site.
We'd buy ahead, but on a call-off basis. Each month we'd have a delivery of each, at 1/12th the order quantity and 1/12th the contract price. More than once, the spot price dropped against the contract, but it worked the other way too. We'd buy in on forward pricing, and the spot price would often go up.
When you are an energy company supplying two million domestic customers, I would imagine trying to procure guaranteed quantities at spot prices is just too risky, as Igloo and Symbio found out, to everyone else's cost.
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