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ALERT, are you looking for billion dollar market disrupting startup opportunities? Well here you are, the UK electricity retailing market, all you have to to is

ALERT, are you looking for billion dollar market disrupting startup opportunities? Well here you are, the UK electricity retailing market, all you have to to is take a reading from a UK electricity meter, work out a bill and take payment from the customer!! If you can do this without taking the wrong reading, without your online portal crashing and failing and generally avoiding muddling all the details so much that you can never untangle the mess no matter how much the customer begs, then you Sir will be a winner head and shoulders above all the existing companies!!! Go on, you can't really do worse than those who have gone before you.

IshKebab 7y ago
My girlfriend works for an energy middleman company like this. It's actually way more complicated than you'd expect because everything is based on an 80s (cough Thatcher cough) text-based data interchange format (she calls them "flows", not sure of the actual name). Also there are a hell of a lot of weird and legacy stuff around electricity meters. Did you know some properties share meters for example? Also since these companies are fungible middlemen, margins are very narrow.
tialaramex 7y ago
The _actual_ business is a bit trickier than this would suggest, which is why loads of outfits go bankrupt. The tricky part is that you need to buy long term energy supply contracts. Nobody will sell you 40MW of electricity right now, they want to sell you 40MWyears of power in 2020. But you only get paid by consumers for instantaneous power used, and only after they've used the power (very poor customers pay up front but they make negligible difference to your profitability although it wastes a lot of their money). If I buy £4 billion of energy, and bring in £5 billion over ten years selling it to consumers, then I'm up £1 billion but I needed to borrow that money for ten years! Worse, if I buy £4 billion of energy, but meanwhile markets change and I can only sell it for £3 billion over ten years I'm going to _lose_ a billion pounds and my investors can see what's happening long in advance. Ouch. You need a LOT of capital to get into this business safely. If you don't have that capital you will go bankrupt the first time consumer prices fall and you can't absorb the difference. This is happening in the industry right now in the UK. E.On owns a lot of generators, which is both a capital intensive business (they own these very expensive wind turbines and stuff) and also a potential hedge against the consumer side losing too much money. If consumer prices fall, E.On's consumer side can share the pain with its generator business.

IshKebab 7y ago

My girlfriend works for an energy middleman company like this. It's actually way more complicated than you'd expect because everything is based on an 80s (cough Thatcher cough) text-based data interchange format (she calls them "flows", not sure of the actual name). Also there are a hell of a lot of weird and legacy stuff around electricity meters. Did you know some properties share meters for example? Also since these companies are fungible middlemen, margins are very narrow.

tialaramex 7y ago

The _actual_ business is a bit trickier than this would suggest, which is why loads of outfits go bankrupt. The tricky part is that you need to buy long term energy supply contracts. Nobody will sell you 40MW of electricity right now, they want to sell you 40MWyears of power in 2020. But you only get paid by consumers for instantaneous power used, and only after they've used the power (very poor customers pay up front but they make negligible difference to your profitability although it wastes a lot of their money). If I buy £4 billion of energy, and bring in £5 billion over ten years selling it to consumers, then I'm up £1 billion but I needed to borrow that money for ten years! Worse, if I buy £4 billion of energy, but meanwhile markets change and I can only sell it for £3 billion over ten years I'm going to _lose_ a billion pounds and my investors can see what's happening long in advance. Ouch. You need a LOT of capital to get into this business safely. If you don't have that capital you will go bankrupt the first time consumer prices fall and you can't absorb the difference. This is happening in the industry right now in the UK. E.On owns a lot of generators, which is both a capital intensive business (they own these very expensive wind turbines and stuff) and also a potential hedge against the consumer side losing too much money. If consumer prices fall, E.On's consumer side can share the pain with its generator business.