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View Diary: Why standby charges are bogus (7 comments)

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  •  Do they charge THEIR electricity suppliers? n/t (0+ / 0-)

    ''The guarding of military and diplomatic secrets at the expense of informed representative government provides no real security for our Republic.'' - Justice Hugo L. Black of the Supreme Court

    by geekydee on Fri Nov 22, 2013 at 11:23:42 AM PST

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    •  Errr (1+ / 0-)
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      I'll have to explain the UK electricity market and structure a bit more. You have to split this into four sectors.

      Generating companies own the power stations (there are also interlinks with other countries, mainly France but into a European grid which can import or export power according the national demand). The generators wholesale their generation to the retail suppliers (often their own company)

      The National Grid distribute it to local power distribution companies.

      The local distribution companies, in co-ordination with National Grid maintain the domestic supply so the voltage and frequency remain within the specified limits away from the standard (230V/50Hz). They also own and maintain the local distribution network up to the consumer's meter. They distribute the electricity to the customers of retail "power companies". The distribution companies are responsible for specific geographical areas, as a result of denationalization. I am in what was the London Electricity Board area which is now owned by EDF (Electricite de France) - even though my retailer is Scottish and Southern.

      The "power" or "supply company" is the retailer. They supply electricity to the customer and are responsible for the meter installation and reading. Consumers are free to choose any retail company - changing supplier involves a final meter reading and billing followed by the new supplier taking over. Currently the process takes about 4 weeks but plans are to considerably reduce this. These retailers are mostly ordinary companies but there are a few not-for-profits and buyers' co-operatives.

      The local distribution companies pay National Grid a "carriage fee" and in turn charge the retailers fees to cover this and their own network charges.

      Apart from National Grid, companies can "vertically integrate" the other three functions. Thus EDF generates in both its UK plants and their nuclear stations in France; acts as the local distribution company (LDC) in London and elsewhere and is a retail supplier. Some retail companies also generate (or buy in renewable energy) and just pay carriage fees and network charges to the LDC (an example being Green Energy who I notice use the "no standing charge" model). Pure retailers include Sainsburys Energy owned by a supermarket company and Virgin Energy (that Branson gets everywhere).  

      This gives a wide range of price and ethical choices which is currently being simplified to assist consumers comparing when switching. Of course electricity is not labelled as it goes into the grid so your "green" energy may have originated at a coal fired station however the retail company buys its supplies from a green generator and retails an equal amount to their customers. (All companies are responsible for and collect a government levy spent to increase the amount of renewable and reduce consumption by conservation measures such as insulating the homes of the poor or elderly - whose bills can also be subsidized from the levy). I got a set of low energy CF bulbs sent free under this scheme and companies have co-operated with major supermarkets to reduce the price of these - at one stage you could get a CF for the equivalent of 16 cents.

      Because of the historical locations and their vertical integration there is a "big 6" who tend to have the lion's share of the market due to people not switching suppliers.

      There are schemes to "buy back" electricity from home generators and there are government assisted schemes to raise a loan on the house (not the home owner) which is repaid over a number of years, like a mortgage but the balance and responsibility to pay stays with the property so the next owner just carries on. In some cases, the installation company bears the whole cost in particularly "energetic" areas, sells all the electrictiy back into the grid and shares the profit with the home owner. Such renewables get a "lead in tariff" subsidized from the levy I mentioned above to encourage installations (as do wind turbines etc).

      Well you did ask!

      We will work, we will play, we will laugh, we will live. We will not waste one moment, nor sacrifice one bit of our freedom, because of fear.

      by Lib Dem FoP on Fri Nov 22, 2013 at 12:31:53 PM PST

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