the key difference is that most of the delivery infrastructure is fully owned and operated by the same companies that do the production
That used to be the case here as well, but these companies got split up into a network company and a power company when the government decided to open up the energy market for competition.
It sounds like the Netherlands does in fact have two power providers then in the form of Enexis and TenneT, at least as I understand the term “provider” as we use it here. Or do you also maintain contracts/payments with individual power production firms that you haven’t already described? What is the benefit of maintaining a contract with any of these companies if they already sold the power to Enexis/TenneT and they don’t do any other administration services?
You misunderstand. Power companies do not sell their power to TenneT or Enexis. It’s the other way around: power companies pay TenneT and the local network owner (Enexis is just one of them) for transporting the power they generate to their customers. These are the fixed network costs that get passed on to the consumer.
TenneT, Enexis and the other network companies own the power distribution infrastructure, and they basically charge for access to their network.
Saying there is only one power company because Enexis delivers the power to my house is like saying there is only one online shop because the postal service delivers all my online orders to my door.
Just like I can order something from Amazon, or bol.com, or CoolBlue, I can also buy power from any of these 52 power companies. It all gets transported by TenneT and Enexis just like all my packages are transported by PostNL. And just like when I order something online, I don’t have a contract with the delivery service: the delivery service is contracted by the seller. Just like the PostNL shipping costs show up on my bill, so do the energy transport costs. I still only have a contract with the energy company.
The energy company either generates the power themselves (analog to Amazon shipping from their own warehouse) or they can pay someone else to generate the power they sold me (analog to Amazon drop-shipping a purchase). The company I currently buy my power from (Essent) has several power plants, but they may buy additional power on the open market, or sell it if they have spare capacity. This varies hour by hour.
Since all electricity is the same, there is no need to transport the exact energy produced by my energy company to my house. Or to use the packages analogy: imagine every online shop only sold 1, identical product. Online store A sold 3 products to customer 1, 2 and 3, and online store B sold 2 products to customer 4 and 5. Since all products are exactly the same, they don’t bother putting address labels on them, company A just sends 3 unmarked packages to the postal service warehouse, and company B sends 2 unmarked packages. Since it’s all the same, the postal service just tosses all the incoming packages onto one big pile. They then deliver a random package from that pile to customers 1 through 5, it doesn’t matter which as they’re all the same anyway. Why keep track when there is no point? The only thing that matters is that if company A tells the postal service to deliver 3 packages to their customers, they should also send 3 packages to the postal services’ warehouse. No need to keep track of individual packages, but number of packages in and out must match for each online store.
We regularly experience outages affecting people into the hundreds of thousands.
Power outages are extremely rare here and usually only affect a small group of houses. With the exception of the high-current linking network, all our power lines are underground so they aren’t affected by things like falling trees and the like.
I gotta be honest, your replies are very wordy and I’m having trouble following.
I would in fact say that you have only one (well, two) power providers. You have one mail delivery service, presumably random-online-shop.com isn’t providing you mail service right? That’s the same thing here. Your “provider” doesn’t produce the energy. They, like in the packages example you used, are simply handing off the “packages” to your power provider (the mail service) who then administers and provides you with your power (delivers your mail). They have the power at that point, it’s on their grid, and you want the power, so they give you the power. You’re still paying the other company, to pay Ennexis, to provide the power. These companies just make it.
And again, if all the packages are the same, there’s no difference and it doesn’t matter, why would you sign a contract with any of these companies specifically? Why doesn’t the entire NL just buy from the cheapest company if it’s all the same to you as an end-user of the network?
Anyway at this point I’m just happy to be able to push a new idea on other folks here. The concept of govermment-run programs is still scary for some reason, but we do public/private partnerships very well here. It could just be that we have different understandings of the word “provide”, which I’m fine with. Who am I to tell the Dutch what words mean lol. Feel free to redeem your Charity Coupon™️ if you’d like. Thanks for the chat.
You have one mail delivery service, presumably random-online-shop.com isn’t providing you mail service right? That’s the same thing here.
No, it’s not. The power company is analog to Amazon or another webshop. The network company is analog to the postal service.
Your “provider” doesn’t produce the energy.
They actually do produce the energy, the network company doesn’t. The power company owns the power plants that actually generate the electricity, or they sub-contract to a company that does (this is a simplification, in reality it’s more dynamic than that).
They, like in the packages example you used, are simply handing off the “packages” to your power provider (the mail service) who then administers and provides you with your power (delivers your mail).
You’re playing semantic games here.
The network company only transports the energy, it’s not theirs. Just like the postal service doesn’t own the contents of the packages they deliver. It’s briefly in their possession, but it’s not their property. And just like with the postal service they are only paid for transport. If I order a €10 bag of cat litter on Amazon, the postal company gets paid €5,95 to deliver it to my door. If I order a €2000 laptop, they also get paid €5,95. If I use 1 watt-hour of energy on a particular day , Enexis gets €1,16 for delivery it. If I use 1000 watt-hours on that day, they also get €1,16.
Let me put it this way: let’s say you got a new pair of sunglasses. You meet a friend and he says, “cool shades, where did you get them?”. What will you answer?
“I got them from the postal service”
“I got them on Amazon”
And again, if all the packages are the same, there’s no difference and it doesn’t matter, why would you sign a contract with any of these companies specifically? Why doesn’t the entire NL just buy from the cheapest company if it’s all the same to you as an end-user of the network?
Because while the actual power is the same, the contracts aren’t. There is no “cheapest company”, there is maybe a cheapest company for my particular situation. There are many differences between power companies and the products they offer.
I may want to contract with a company the only produces renewable energy (in fact, I do).
I may want to have a contract with a guaranteed fixed price for the next, 1, 3, or 5 years. Prices differ for these between companies due to their prediction of how their costs (to either produce or buy) will change in that period. They also change over time. So if my fixed-price contract is up today, company A may be the cheapest option to renew, but if I had to renew 4 months from now, it could be company B.
I may want a contract with variable pricing, where the price is adjusted based on the price of energy on the European market every 3 months.
I may want a completely dynamic contract, where the prices vary on an hour-by-hour basis. Even within this there are differences. For examples: some companies will just let you pay the actual market price plus a small markup. This may be risky for the consumer is there is a suddenly a huge spike in price for a few hours (which has happened in the past). Some offer dynamic pricing based different rules, e.g. an average over the last day or so. Which takes away some of the risk for spikes but also means you don’t get a lot of savings when the price is suddenly super low or even negative (which has also happened in the past).
They provide different levels of service. For example: they offer discounts on certain power-saving products, from LED bulbs to heat exchangers.
If you have solar panels, you can sell the excess power they generate back to the power company. The amount they pay also varies per power company. If you barely use any power at night and you over-produce a lot during the day, you may want to choose a company not based on how much they charge for power, but how much they pay.
Then there’s companies that offer additional stuff. For example: there was at least one that installed solar panels on your roof, and then you’d use the money you’d save in energy usage to pay for the panels in X years.
Other services that are offered by power companies are things like home inspection to see if there are areas where you cold save power, e.g. by improving insulation.
So it entirely depends on your preferences as a consumer. Do you want a guaranteed price or do you want to take a little bit more risk? How much risk? What kind of service do you want? Just the bare minimum or do you want more?
That used to be the case here as well, but these companies got split up into a network company and a power company when the government decided to open up the energy market for competition.
You misunderstand. Power companies do not sell their power to TenneT or Enexis. It’s the other way around: power companies pay TenneT and the local network owner (Enexis is just one of them) for transporting the power they generate to their customers. These are the fixed network costs that get passed on to the consumer.
TenneT, Enexis and the other network companies own the power distribution infrastructure, and they basically charge for access to their network.
Saying there is only one power company because Enexis delivers the power to my house is like saying there is only one online shop because the postal service delivers all my online orders to my door.
Just like I can order something from Amazon, or bol.com, or CoolBlue, I can also buy power from any of these 52 power companies. It all gets transported by TenneT and Enexis just like all my packages are transported by PostNL. And just like when I order something online, I don’t have a contract with the delivery service: the delivery service is contracted by the seller. Just like the PostNL shipping costs show up on my bill, so do the energy transport costs. I still only have a contract with the energy company.
The energy company either generates the power themselves (analog to Amazon shipping from their own warehouse) or they can pay someone else to generate the power they sold me (analog to Amazon drop-shipping a purchase). The company I currently buy my power from (Essent) has several power plants, but they may buy additional power on the open market, or sell it if they have spare capacity. This varies hour by hour.
Since all electricity is the same, there is no need to transport the exact energy produced by my energy company to my house. Or to use the packages analogy: imagine every online shop only sold 1, identical product. Online store A sold 3 products to customer 1, 2 and 3, and online store B sold 2 products to customer 4 and 5. Since all products are exactly the same, they don’t bother putting address labels on them, company A just sends 3 unmarked packages to the postal service warehouse, and company B sends 2 unmarked packages. Since it’s all the same, the postal service just tosses all the incoming packages onto one big pile. They then deliver a random package from that pile to customers 1 through 5, it doesn’t matter which as they’re all the same anyway. Why keep track when there is no point? The only thing that matters is that if company A tells the postal service to deliver 3 packages to their customers, they should also send 3 packages to the postal services’ warehouse. No need to keep track of individual packages, but number of packages in and out must match for each online store.
Power outages are extremely rare here and usually only affect a small group of houses. With the exception of the high-current linking network, all our power lines are underground so they aren’t affected by things like falling trees and the like.
I gotta be honest, your replies are very wordy and I’m having trouble following.
I would in fact say that you have only one (well, two) power providers. You have one mail delivery service, presumably random-online-shop.com isn’t providing you mail service right? That’s the same thing here. Your “provider” doesn’t produce the energy. They, like in the packages example you used, are simply handing off the “packages” to your power provider (the mail service) who then administers and provides you with your power (delivers your mail). They have the power at that point, it’s on their grid, and you want the power, so they give you the power. You’re still paying the other company, to pay Ennexis, to provide the power. These companies just make it.
And again, if all the packages are the same, there’s no difference and it doesn’t matter, why would you sign a contract with any of these companies specifically? Why doesn’t the entire NL just buy from the cheapest company if it’s all the same to you as an end-user of the network?
Anyway at this point I’m just happy to be able to push a new idea on other folks here. The concept of govermment-run programs is still scary for some reason, but we do public/private partnerships very well here. It could just be that we have different understandings of the word “provide”, which I’m fine with. Who am I to tell the Dutch what words mean lol. Feel free to redeem your Charity Coupon™️ if you’d like. Thanks for the chat.
No, it’s not. The power company is analog to Amazon or another webshop. The network company is analog to the postal service.
They actually do produce the energy, the network company doesn’t. The power company owns the power plants that actually generate the electricity, or they sub-contract to a company that does (this is a simplification, in reality it’s more dynamic than that).
You’re playing semantic games here.
The network company only transports the energy, it’s not theirs. Just like the postal service doesn’t own the contents of the packages they deliver. It’s briefly in their possession, but it’s not their property. And just like with the postal service they are only paid for transport. If I order a €10 bag of cat litter on Amazon, the postal company gets paid €5,95 to deliver it to my door. If I order a €2000 laptop, they also get paid €5,95. If I use 1 watt-hour of energy on a particular day , Enexis gets €1,16 for delivery it. If I use 1000 watt-hours on that day, they also get €1,16.
Let me put it this way: let’s say you got a new pair of sunglasses. You meet a friend and he says, “cool shades, where did you get them?”. What will you answer?
Because while the actual power is the same, the contracts aren’t. There is no “cheapest company”, there is maybe a cheapest company for my particular situation. There are many differences between power companies and the products they offer.
So it entirely depends on your preferences as a consumer. Do you want a guaranteed price or do you want to take a little bit more risk? How much risk? What kind of service do you want? Just the bare minimum or do you want more?