Monday 23 August 2010

Lidl, the cut-price supermarket, is dipping its toes into the world of electricity trading dominated by banks and utilities



The supermarket is setting up its own power trading desk, after UK managers taught themselves how to trade using dealing platforms. It is usually the banks and major utilities that trade on the complex markets driven by oil, gas and coal prices.

However, the idea was successful in Germany, where the €59bn-revenue (£48bn) retail giant managed to reduce its bills by taking control of its own energy supply.

The project has been led by Lidl's national cost manager, Senol Kosar, who has been learning about the electricity trading for a year. "It's not our core business but the economy requires us to look carefully at the energy markets," he said. "A couple of years ago, bills weren't so volatile. We decided that we wanted to get the benefit from market movements, whether the market is going up or down, to reduce energy costs.

"We have a relationship with the supplier but we don't actually need to buy the power from them. We have been preparing for a year and will start in two to three weeks."

Suppliers have hinted that prices will rise substantially this winter, hitting domestic consumers and big commercial users. But Jeremy Nicholson, of the Energy Intensive Users' Group, said it was surprising for a supermarket to move into power trading: "I'm not aware of any wider movement to do this yet, but with power prices becoming more volatile there is more commercial incentive to get close to the market."

Ian Parrett, an analyst at the leading energy broker firm Inenco, the energy consultancy, said playing against the big traders would be difficult: "It's very unusual at the moment, but possible."

No comments:

Post a Comment