Where is the kWh price heading in 2022?

[Ferdinand]

OT: I noticed the other day that my baseload had hopped up from 80W to about 150W.

 

Turns out that I had left the hall lights on, and they were still Compact Flashes, not LEDs. Time for a change.

[SteamyTea]

Listening to the news this morning, there was some German energy person on.

He was saying that they (the Germans) need to find a German solution to the energy crisis.  Will that be another Final Solution for them.

While I was pondering all this, another bit came on about how, if we had done the suggestions mooted at the beginning of the 'crisis', they would have been wrong and inadequate.  I agree with this.

Then I thought more, and wondered if we do not bail out the energy retailers (as opposed to the producers), should we give discounts to individual users, similar to what we are currently doing.

Then I thought even more.  If you get RHI, FiTs or had a grant to fit RE kit, should you be getting any help.  You have been claiming 'help' already, sometimes quite a lot.

Then, after more thinking, I realised that is way to hard to manage it all, so went back to my original idea mentioned it on here somewhere some weeks ago, that we just need to support the energy retailers.

Then a bit more thinking, to what extent do we need to support them.

The long term, auction mean price of electricity has been around £50/MWh.  So why not set the price cap at £75/MWh that retailers can pay, then the Treasury chips in the difference, which some days may be £100/MWH, other days nothing.  The records are there, accounts and bookkeepers like doing that sort of stuff, and the end users (us) have manageable bills, all be it higher than they were.

A secondary advantage is that it should encourage investment in RE.  I would include nuclear in that, but they cannot buy a £1 sandwich from Poundland without it costing a million quid, and by the time they got the sandwich it would be a decade old and more mouldy that a British Rail one.

 

Then I thought my 2 minute shower was over and I better get out, don't want to waste energy. 

No one can see your tears of pain as hot shower water goes down the plug hole.

Edited September 5, 2022 by SteamyTea

[ToughButterCup]

7 minutes ago, JohnMo said:

All they need do is delink the gas price from nuclear and renewables....

 

Exactly this argument on R4 Today just a few minutes ago.

[Onoff]

28 minutes ago, Ferdinand said:

 

Someone needs to pull the other one.

 

I don't understand the comment?

[Ferdinand]

5 minutes ago, JohnMo said:

All they need do is delink the gas price from nuclear and renewables. At the moment the wholesale price of electricity is all based on gas generated electric.

 

Why should the tax payer support extra profits for generators where it costs no more to generate than it did prior to the gas price rise.

 

Serious q: How does that affect imports and exports of electricity, and our participation in international supply pools? 

 

is that similar to the action taken by Spain and Portugal back in June?

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3550

 

Do we have to move in sync with other countries on this?

[ProDave]

2 minutes ago, Ferdinand said:

 

Serious q: How does that affect imports and exports of electricity, and our participation in international supply pools? 

 

is that similar to the action taken by Spain and Portugal back in June?

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3550

 

Do we have to move in sync with other countries on this?

If you paid for the renewable and nuclear at the "correct" rates (cost plus reasonable profit) and only paid for the gas derived electricity at a higher rate, then you would have a wholesale electricity rate of the average of all those, depending how much of each you generate.

 

I guess your question translates to, well if we have been sensible and decoupled our pricing, but the rest of the world has not, then they would all want to buy as much as they can of our "cheap" electricity to the capacity of the interconnectors.

 

Or would they see the light and decouple their prices as well?

[Ferdinand]

6 minutes ago, Onoff said:

 

I don't understand the comment?

 

You mentioned bells. It was probably me pulling the other one.

 

 

[JohnMo]

If we are selling overseas they pay market rate for importing the energy, we also pay market rate at time of import into the UK.  Just normal commercial transaction.

 

Import and gas electric will fluctuate in price the average price would be passed on to the consumer at some point.  They should be able sort that quite easily,as the system has been used for decades.

[Onoff]

35 minutes ago, Ferdinand said:

 

You mentioned bells. It was probably me pulling the other one.

 

 

 

😂 Sorry, Covid induced slow uptake here!

[AliG]

2 hours ago, Ferdinand said:

teresting moves on the continent.

 

€65bn support package from Germany for its public.

https://www.bloomberg.com/news/articles/2022-09-04/german-government-agrees-on-energy-relief-plan-worth-65-billion

 

Pro-rata that's about the equivalent of a £45bn package here to give the same support per pop.

 

Liquidity guarantees for power companies:

https://www.rferl.org/a/sweden-finland-energy-companies-guarantee/32018086.html

 

We'll see soon whether Fizz Liz is going to continue to deny support where it is most needed by adopting the wrong basic values for the time.

 

F

Interesting how politicians everywhere play with numbers.

 

In the U.K. we will presumably soon be seeing very large rises in pensions and benefits payments that are linked to inflation.  It seems like Germany is including these numbers in the help they are providing. With the pensions and benefits budget at £212bn last year increasing this in line with inflation will cost over £20bn on its own before any other help.

 

A little note on media reporting. They are all eager to talk about how much the price of gas will rise today due to Russia turning off supplies. It looks like the price is up around 25% today. However it is still around 25% less than 10 days ago. No one reported the massive fall last week.

[Ferdinand]

2 minutes ago, AliG said:

A little note on media reporting. They are all eager to talk about how much the price of gas will rise today due to Russia turning off supplies. It looks like the price is up around 25% today. However it is still around 25% less than 10 days ago. No one reported the massive fall last week.

 

Yes. Imo our UK domestic media consists mainly of attention-seeking toss-wazzocks, and the dominant priority is clicks.

 

I've heard both sides of that reported on I think the BBC WS news and the Telegraph "Ukraine latest" podcasts, which is a 1 hour conversation every weekday.

 

5 minutes ago, AliG said:

In the U.K. we will presumably soon be seeing very large rises in pensions and benefits payments that are linked to inflation.

 

In a couple of cross-party quite high quality political groups I am in, there's quite a bit of nasty hate politics around 'boomers the most selfish generation ever', 'generation theft' and so on. There was a bigger-than-usual outbreak wrt pension increases during Covid, and I'm expecting another one.

 

The triple lock is not popular ,despite having only delivered about £600 a year pension uplift over what it would have been over 12 years.

 

Actually John Major and Gordon Brown made quite good decisions around increasing pension age, and the % of our GDP spent on benefits for old people has been reducing for years. I think the numbers are 5.4% of GDP in the mid-2010s down to 4.9%, and a slow increase starting in the near future. We are actually well-positioned as a country.
 

Add in that we have about the best demographic profile in Western Europe, except Ireland, for affording pensions, and the whole thing is a monumental red herring.

 

IMO we need a basic state pension at perhaps 70% of minimum wage (that idea is from the Netherlands), roll a lot of the minor benefits into it (eg Warm Homes Grant), then perhaps relatively increase the tax levels for higher income pensioners.

 

F

[Roger440]

3 hours ago, ToughButterCup said:

 

Exactly this argument on R4 Today just a few minutes ago.

 

Agreed. Wont happen though. That much you can be sure of.

[Kelvin]

1 hour ago, AliG said:

Interesting how politicians everywhere play with numbers.

 

In the U.K. we will presumably soon be seeing very large rises in pensions and benefits payments that are linked to inflation.  It seems like Germany is including these numbers in the help they are providing. With the pensions and benefits budget at £212bn last year increasing this in line with inflation will cost over £20bn on its own before any other help.

 

A little note on media reporting. They are all eager to talk about how much the price of gas will rise today due to Russia turning off supplies. It looks like the price is up around 25% today. However it is still around 25% less than 10 days ago. No one reported the massive fall last week.

The significant fall was reported last week. 

[SimonD]

4 hours ago, SteamyTea said:

A secondary advantage is that it should encourage investment in RE. 

 

But it won't. RE investment is already too low to transition in time for 2050 and all that would be accomplished by supporting suppliers but paying the generators and extractors etc. is further transfer of wealth as it will result in bigger bonuses, happy hedge fund managers, increased dividends and more. It would merely amount to further FF subsidies over and above the existing ones. (Although Uniper in Germany has suffered over $12bn in losses and has been bailed out by the German government)

 

Capping prices and dislocating gas from electricity prices is a good start but there has to be a re-configuration of the whole energy market as it's dysfunctional.

[SteamyTea]

6 minutes ago, SimonD said:

Capping prices and dislocating gas from electricity prices is a good start but there has to be a re-configuration of the whole energy market as it's dysfunctional

That has to be done as well. But for the next 6 months we have to support the retailers.

6 minutes ago, SimonD said:

RE investment is already too low to transition in time for 2050 and all that would be accomplished by supporting suppliers but paying the generators and extractors etc

Except we have legislation and international commitments.

Still, at least I will be able to look at Grade 3 and 4 farmland without it being totally coveted in solar panels. Not sure if anyone has told Fizzy Lizzy that it won't be covered in food crops either.

Just rock, gorse and muddy now the rain has started.

Edited September 5, 2022 by SteamyTea

[JohnMo]

But we will all know what's occuring on Thursday, or so they have just stated on R4.

[joe90]

14 minutes ago, SteamyTea said:

Not sure if anyone has told Fizzy Lizzy that it won't be covered in food crops either.

Just rock, gorse and muddy now the rain has started

Well a local solar farm has just won at judicial review, 40+ acres of grade 3 land despite gov rules on using good farmland ?

[SteamyTea]

1 minute ago, JohnMo said:

But we will all know what's occuring on Thursday, or so they have just stated on R4.

The Archers?

The Curios Cases of Rutherford & Fry.

[Onoff]

45 minutes ago, joe90 said:

Well a local solar farm has just won at judicial review, 40+ acres of grade 3 land despite gov rules on using good farmland ?

 

So we'll at least have the lights on, to see what's not on our plates!

[SimonD]

1 hour ago, SteamyTea said:

Except we have legislation and international commitments.

 

The International Energy Agency Net Zero Report:

 

Commitments made to date fall far short of what is required by
that pathway. The number of countries that have pledged to achieve net-zero emissions
has grown rapidly over the last year and now covers around 70% of global emissions of
CO2. This is a huge step forward. However, most pledges are not yet underpinned by
near-term policies and measures. Moreover, even if successfully fulfilled, the pledges
to date would still leave around 22 billion tonnes of CO2 emissions worldwide in 2050.

 

Investment will have to triple by 2030 at least.In the end I suspect it's going to be governments that shoulder the burden, not private investment, even though they're likely to reap the rewards unless the governments take proper equity stakes like some sensible ones do.

[jack]

1 hour ago, SimonD said:

Investment will have to triple by 2030 at least.In the end I suspect it's going to be governments that shoulder the burden, not private investment, even though they're likely to reap the rewards unless the governments take proper equity stakes like some sensible ones do.

 

With what though? Where is the money going to come from in the next handful of years given how deep in the hole we already are with energy, the NHS, etc (etc, etc, etc)? It's the apocryphal story of asking the farmer for directions and being told "Well I wouldn't start from here".

Imagine if we'd spent all the HS2 money, and 90% of the track and trace + PPE scandal money on renewables?

[AliG]

If you build renewables in the UK you will get a decent return on investment. No need for government investment, after all they are already almost 50% of generation without the government having to invest in them. Nuclear is where risks and costs are higher so governments probably need to be involved. The issue is, something we are all well aware of here, the difficulty in getting permission to build them.

 

I did a project on this at work and it looks like we need something like a five fold increase in wind capacity over the next 20 years in the UK, I think the global figure was about ten fold. Pre Ukraine, however, you wouldn't just build lots of unneeded wind capacity, it would be built over time in line with increasing demand and the need to reduce emissions. This is what is expected if you look at the energy policy document I posted earlier. All the capacity increases come from low carbon sources (wind and solar for the next 10 years with some hydrogen kicking in after that). The work I did suggested that for some time we can reduce emissions with wind and solar but eventually you would need to use hydrogen in cases where electricity cannot be used - think boilers for stately homes and mining trucks. The expectation is that at some point in the future there will be so much cheap renewable energy that we can them use that to make hydrogen to get the last part of the ay to net zero. The most surprising thing that I found is that the price of electricity was expected to fall over time making the inefficient process of making hydrogen more attractive. Personally I felt this was a stretch but that is the industry forecast.

 

In a way Putin has made seen this coming, if you look at the percentage of electricity coming from gas it drops dramatically from 2025 onwards. The high growth in electricity demand is partly driven by an assumption that we move over to heat pumps for most heating over the next 20 years. I expect hat when our boiler gives up the ghost I will replace it with an ASHP.

 

[Onoff]

8 minutes ago, AliG said:

The most surprising thing that I found is that the price of electricity was expected to fall over time making the inefficient process of making hydrogen more attractive.

 

Does it take into account the costs upgrading the gas distribution network? Doesn't hydrogen have to be delivered at higher pressure than a lot of our infrastructure can cope with?

[joe90]

15 minutes ago, AliG said:

The most surprising thing that I found is that the price of electricity was expected to fall over time

That’s been said since the 60,s

[SteamyTea]

4 minutes ago, joe90 said:

That’s been said since the 60,s

Was 10p/kWh in the early 1990s.

A small EU made car was 7k then, about 15k now.

A pint was 1.50, now 4.

A basic desktop PC 1500, now about 350.

My neighbours house was in Aylesbury, 38k now and over 250k.

Bank rate about 8% now 2%.

 

Very hard to compare prices we all have different spending patterns and priorities.

19 minutes ago, Onoff said:

Does it take into account the costs upgrading the gas distribution network

Why would you pump it. Making on sight would be easier.