You are reading a single comment by @C4r1s and its replies.
Click here to read the full conversation.
-
This is one of those once in a decade events, don’t think there’s been a price rise this steep in a very long time from data I’ve seen going back to 2008 ish.
@cozey that’s why many energy companies have very large trading teams to look at exactly that. As @Dammit said earlier there’s very much twin parts, the physical to someone’s home and the engineers needed for that to happen, plus the market trading to make sure they remain viable and can buy energy at a good price to allow them to offer competitive tariffs to consumers
C4r1s
Aah - thanks for the explanation. The cap was a piece of information that I was missing.
However, I'm still surprised that the regulator didn't force them to hold the capital to cope with this. For example, the price rises are significant, but it's not unprecendented (for example, post Fukushima in Japan, gas prices rose 80% or something insane as the nuclear plants were all turned off).
I'd just assumed that regulators wouldn't allow them to given that their role is to supply an essential service, or would insist on them holding sufficient capital. Maybe they do and this is one of those 99.99th percentile events that they can't cope with. Maybe the holding of capital isn't even a thing the energy regulator can insist on - it's not something I know a lot about.