Europe faces an unusual problem: ultra-cheap energy - https://web.archive.org/web/20240620151949/https://www.economist.com/finance-and-economics/2024/06/20/europe-faces-an-unusual-problem-ultra-cheap-energy
Europe faces an unusual problem: ultra-cheap energy - https://web.archive.org/web/20240620151949/https://www.economist.com/finance-and-economics/2024/06/20/europe-faces-an-unusual-problem-ultra-cheap-energy
As a libertarian, I actually disagree. Natural monopolies should be a public service because the incentives to provide ethical service aren’t there. You can’t realistically have multiple power companies, so the city/state should provide electricity service.
Power generation could be a private service, since cities can choose their suppliers. They can also generate their own, and private energy would need to compete with that.
Of course you can have multiple power companies in the city! A quick search shows that I can choose from over 10 different energy providers for my home. There’s no such thing as a natural monopoly, they only happen when legislation allows them to happen.
No, what you have are 10 different customer support companies. They probably don’t own the wires coming to your house, or the substations and power poles and whatnot. Maintaining separate infrastructure for 10 companies isn’t practical, so they either own joint ventures that do (less likely) or shift that onto cities and other government entities.
We’re doing that with our municipal fiber initiative, the city owns the infrastructure and companies provide service on that infrastructure. I think “service” is a silly thing to compete on (how often do you really need something from your ISP or power company?), especially when they don’t own the lines so they can’t do much to help, but whatever. I think it’s much better for companies to compete on extra services, like providing base power, energy storage, datacenters (going with the ISP example), etc. Then again, it works reasonably well for MVNOs, so I guess there’s a chance it’s a net positive.
You’re wrong. Different companies own different parts of infrastructure, power generation and/or distribution. The system is no different to setting up a grocery shop. Grocery shops don’t own farms (usually) or a building they’re operating in, yet they can compete efficiently with each other.
As for fibre, again - no issues here. Britain has OpenReach as the main infrastructure manager, which leases it to ISPs, plus there’s a selection of independent ISPs who have their own infrastructure.
And even trains can work successfully as proven by the EU.
So they have a monopoly on a given part of infrastructure. So if a transformer goes down, that company would need to come out and fix it? What happens if they don’t fix it promptly? Surely you can’t reroute your power lines through a transformer owned by a different company, no?
I don’t live in the UK, so I don’t know how it works. But I do know it’s impractical to have parallel electrical systems. We’ve done that historically with internet (cable, dsl, and fiber would use separate, parallel infra), and putting in a competing service gets stuck in bureaucracy because existing players don’t want competition, which is why many areas only have one or two ISPs (they block new ISPs from rolling out new infra with regulations and whatnot). So I’m guessing that’s not happening, which means there’s a monopoly at some point.
I could totally be wrong though. What I do know is that the UK has some of the most expensive electricity in the world.
Are you trolling or what?
No, why would you think that? Your response was basically, “you’re wrong, trust me bro,” and I tried to interpret what you said in a way that makes sense.
If you want to convince me that it works, I’ll need details.
I gave you a very simple example with a grocery shop. There’s not much difference between setting up a new shop or energy provider.
There’s a huge difference. You completely sidestepped the interesting bit, which is the monopoly on infrastructure (e.g. power lines in the city up to your residence). Someone owns and maintains those lines. That is the part I’m concerned about.
It’s easy to compete on energy production (e.g. farms) or customer service (e.g. grocery delivery), but it’s hard, if not impossible, to compete on infrastructure (e.g. the store itself). If there’s an energy shortage (i.e. store runs out of food), you can’t just go to another provider, they’re all using the same grid. The analogy would work if you’re assigned to a store, but you can choose the cashier, and perhaps cashiers are paid based on customers served. Or perhaps if prices are fixed across grocery stores and they somehow share inventory, but how they layout the store differs.
So it sounds a lot more similar to the municipal fiber initiatives in my area. Basically, there’s one network owned by the municipality, and companies provide “service” on that network, but any maintenance goes to the city-owned network to manage (e.g. the local monopoly). In pretty much every case, it’s a distinction without a difference, because they all just present the same underlying service with a different veneer. I don’t know if the UK has the same concept, but it’s also like an MVNO (a company offering mobile service on a major network’s hardware), but with even less variety in pricing (how many pricing tiers can you actually have for electricity?). I like my MVNO, but I get the same service quality regardless of the MVNO I select, provided they’re all backed by the same network.