There has been discussion here lately about 'time of use' tariffs, that
allow making use of off-peak periods of electricity generation throughout
the day. However they aren't so great if you have a 'conventional' usage
profile. As the recent Texas event showed, they are also risky if they're
purely based on the wholesale cost of electricity with no price cap.

However there is another way. Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricing, but can time the market to pick the
best forward price. Due to the way the market is regulated the downside of
a bad contract is limited - you can always exit for a £30 fee.

There is a supplier who does this - Symbio Energy - although they don't
describe it like this. They issue roughly one tariff a week, that as far as
I can tell is a relatively thin veneer that roughly tracks the 1 year
forward price of electricity - over time the quotes from Symbio direct seem to
roughly correlate with the 1y forward price charts from he
https://www.apolloenergy.co.uk/news/market-analysis
(for any supplier about 8p/kWh is fixed costs not related to the wholesale
price)

Of course all suppliers who offer fixed tariffs which can be seen as forward
price speculation, but often they're on a much coarser (every 3 months or
whatever) granularity, and they're less exposed to market prices because
those suppliers take a bigger chunk of profit.

Another nice thing about this is there's no switching around - just sign up
for a new deal when your current one is up. (their default tariff is a bit
unattractive if you forget though)

Looking at the charts, Symbio actually compares fairly well to TOU tariffs
unless you can shift most of your consumption to the night or the summer,
which many of us can't.

Theo

On 10/03/2021 13:10, Theo wrote:
However there is another way. Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricing, but can time the market to pick the
best forward price.

These tend to be the companies that fail not long after a 50-year
weather 'event' because they have sold long, and cheap but have to buy
short, and expensively.

Andrew wrote:
On 10/03/2021 13:10, Theo wrote:
However there is another way. Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricing, but can time the market to pick the
best forward price.

These tend to be the companies that fail not long after a 50-year
weather 'event' because they have sold long, and cheap but have to buy
short, and expensively.

Given the market is offering a 1 year futures price, I assume that's a thing
you can actually buy - ie you agree a price to buy NNNN kWh over the next
year. Somebody who isn't you will do the financial juggling to make sure
they can cover that from the spot market, plus likely profit. If they can't
cover that it's them who goes bust, not you.

So you can insulate yourself from the short-term fluctuations if you want
to. Maybe they decide not to do that and do the sell-long buy-short thing
(a la Northern Rock), but that's their fault for not covering that risk.

(Worth bearing in mind that every energy company who doesn't own their own
power plant is playing this market too, so they're no means unique)

Theo

Theo wrote:

However there is another way. Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricing, but can time the market to pick the
best forward price. Due to the way the market is regulated the downside of
a bad contract is limited - you can always exit for a £30 fee.

There is a supplier who does this - Symbio Energy - although they don't
describe it like this.

There's another supplier, utiltypoint, they also don't describe it
exactly like that, the particular tariff charges you more for the first
few months (which they describe as covering the cost of buying energy
futures, then a lower price the rest of the contract.

To my mind, it makes them sound quite small and hand-to-mouth as a
supplier, as I'm sure all the energy Co's do that anyway?

Actually scratch that, just tried to find details of that tariff on
their website, and it seems like it's no longer available, but the
wording still exists ...


"How we calculate your starter and saver payment amounts

We start by calculating your forecasted annual energy costs then divide
this by 12: this provides your average monthly payment amount, we then
adjust it for the time of year. We take a little more during the
beginning of your fixed period (Starter Payments) which allows us to
forward buy your energy providing you with a market leading tariff and
ultimately this means we can charge you less during the second half of
the fixed period (Saver Payments), saving you money when it matters.

Your Starter Payments are taken for the first 6 months and your Saver
Payments are taken for the last 6 months."

Andy Burns wrote:
There's another supplier, utiltypoint, they also don't describe it
exactly like that, the particular tariff charges you more for the first
few months (which they describe as covering the cost of buying energy
futures, then a lower price the rest of the contract.

To my mind, it makes them sound quite small and hand-to-mouth as a
supplier, as I'm sure all the energy Co's do that anyway?

Actually scratch that, just tried to find details of that tariff on
their website, and it seems like it's no longer available, but the
wording still exists ...

It appears the Just UP 21 12M Fixed Wk09 tariff does that - March-August is
quoted as double the price of Sep-Feb, which is the opposite of the
expectation you'll use more in the winter.

It does rather sound like they want cash upfront. The tariff is also not
much good (15.9p/kWh + 17p standing charge, v 12.95p/kWh + 15p standing
charge at symbio), although it's better than they other tariff (18.2p/kwh +
24.35p standing).

Theo

"Theo" wrote in message
...
Andy Burns wrote:
There's another supplier, utiltypoint, they also don't describe it
exactly like that, the particular tariff charges you more for the first
few months (which they describe as covering the cost of buying energy
futures, then a lower price the rest of the contract.

To my mind, it makes them sound quite small and hand-to-mouth as a
supplier, as I'm sure all the energy Co's do that anyway?

Actually scratch that, just tried to find details of that tariff on
their website, and it seems like it's no longer available, but the
wording still exists ...

It appears the Just UP 21 12M Fixed Wk09 tariff does that - March-August
is
quoted as double the price of Sep-Feb, which is the opposite of the
expectation you'll use more in the winter.

It does rather sound like they want cash upfront. The tariff is also not
much good (15.9p/kWh + 17p standing charge, v 12.95p/kWh + 15p standing
charge at symbio),

I don't think that you can use the term "not much good" when comparing with
what would appear to be an outlying low cost provider

I peruse the market quite a lot because as a low user my bill is
disproportionately affected by the standing charge and I've never come
across this company Symbio, nor have I seen tariffs that low before (one
wonders how they do it, without going bust)

Unfortunately, as they don't do gas (which is where I really are the low
user) that's not much help to me

Theo wrote :
However there is another way. Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricing, but can time the market to pick the
best forward price. Due to the way the market is regulated the downside of
a bad contract is limited - you can always exit for a £30 fee.

My direct debit, fixed price for E&G contract was due to end in
November. MSE which I have set up to email me if a cheaper offer comes
along, emailed me in October and in error, to suggest I swap to a new
slightly more expensive contract with the same supplier, which I did
and for a second year, before MSE sent out a retraction email pointing
out their error.

Despite it being an error, I now find I am paying around 9% less than
I would have paid, had I waited until the end of my contract to find a
fresh contract.

Theo wrote:

Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricinga

Since they're an electricity-only supplier, can you find similar
gas-only supplier, or do you lose out there?

Andy Burns wrote:
Theo wrote:

Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption and
aren't subject to peak market pricinga

Since they're an electricity-only supplier, can you find similar
gas-only supplier, or do you lose out there?

I now live somewhere without gas so I haven't done it recently, but
previously it was always cheaper to get gas and electric from different
suppliers. Last time I did the numbers for someone else Daligas still
worked out a good deal. I didn't look to see if there's gas suppliers that
operate on a similar pricing model though.

Theo

"Theo" wrote in message
...
Andy Burns wrote:
Theo wrote:

Buy a futures contract for one year's worth
of electricity. That way you've fixed the rate for your consumption
and
aren't subject to peak market pricinga

Since they're an electricity-only supplier, can you find similar
gas-only supplier, or do you lose out there?

I now live somewhere without gas so I haven't done it recently, but
previously it was always cheaper to get gas and electric from different
suppliers.

but by the time you missed out on a dual fuel discount, the difference is
going to be pennies

and it's a PITA getting 2 bills instead of 1

Theo has brought this to us :
I now live somewhere without gas so I haven't done it recently, but
previously it was always cheaper to get gas and electric from different
suppliers.

I have always heard that generally the opposite is true, dual fuel
cheaper from one single supplier.

Harry Bloomfield, Esq. wrote:
Theo has brought this to us :
I now live somewhere without gas so I haven't done it recently, but
previously it was always cheaper to get gas and electric from different
suppliers.

I have always heard that generally the opposite is true, dual fuel
cheaper from one single supplier.

I think it depends on usage. Dual fuel discount is usually £20-30. If
you're a low user, that makes sense. If you use a reasonable amount, the
difference in unit costs outweighs that. Given typical bills can be ~£1Kpa
it doesn't take a huge difference in unit cost to outweigh that £30.

Theo

It happens that Theo formulated :
I think it depends on usage. Dual fuel discount is usually £20-30. If
you're a low user, that makes sense. If you use a reasonable amount, the
difference in unit costs outweighs that. Given typical bills can be ~£1Kpa
it doesn't take a huge difference in unit cost to outweigh that £30.

I have the place set up to be reasonably energy efficient, our combined
annual bill, despite continuous heat and occupation is around £800 all
included.

On 11/03/2021 15:16, Theo wrote:
Harry Bloomfield, Esq. wrote:
Theo has brought this to us :
I now live somewhere without gas so I haven't done it recently, but
previously it was always cheaper to get gas and electric from different
suppliers.

I have always heard that generally the opposite is true, dual fuel
cheaper from one single supplier.

I think it depends on usage. Dual fuel discount is usually £20-30. If
you're a low user, that makes sense. If you use a reasonable amount, the
difference in unit costs outweighs that. Given typical bills can be ~£1Kpa
it doesn't take a huge difference in unit cost to outweigh that £30.

It also requires that you have mains gas available!

I think you could usually do better with a dual fuel deal chosen to
maximise savings on the most heavily used fuel provided that you heat
your home in winter. If not then all bets are off.

An odd one is our VH gets its electricity from British Gas - in some
strange quirk of fate they came out the cheapest for electricity only!

--
Regards,
Martin Brown

On 10/03/2021 13:16, Jethro_uk wrote:
On Wed, 10 Mar 2021 13:10:00 +0000, Theo wrote:

However there is another way. Buy a futures contract for one year's
worth of electricity.

That sounds remarkably similar to the brainwave of annualised hours a
former employer once (briefly) used. They decided that overtime in IT
operations was far too high and forced all the employees onto an
annualised contract where the company decided how the employees annual
hours were allocated.


First (and only) year it was used, everyone had used up their hours by
September. At which point their contracts said they weren't to come in to
work. You can imagine that negotiation.

Returning to the deal in hand, I will bet there is some get out clause
for when it starts working for the consumer.


Cable and Wireless had their contractors on fixed daily rates for 8
hours, but they were happy for people to work more hours some days
to make up for those days when they worked less. If you have a stable
set of people who can be trusted it works well. Timesheets handled the
fluctuations.