Having worked in the energy industry for several years I will be voting NO for Derril Water for the following reasons:
1) I chose this investment to reduce bill volatility and reduce my carbon footprint. The downside risk of losing protection from another price shock far outweighs the upside benefit in a low energy cost environment.
2) we are entering a geopolitical atmosphere with a reversal of globalisation, this will make price shocks all the more common over the next 15 years as countries become more self-centred. This will be exacerbated as the energy transition progresses and our reliance on electricity increases.
3) government forecasts are an indicator but I don’t see them as the investment case for this, as we’re not a financial entity trying to smooth returns. Also how wrong were they recently? That led to the collapse of 30+ energy companies. This could be deemed a “black swan” event, but the reality is that historically these happen every 10-15 years (although in fairness not as dramatically)
4) the 4.1p saving per kWh at a potential £66/mwh strike price isn’t attractive. I’d place my bets on energy prices being higher in the long-term
5) if I wanted a guaranteed return I’d buy a zero coupon 15 year gilt offering a 4% yield and capital return.
some useful resources for people to make their own decisions.
https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators