Regional energy pricing

[Alan Ambrose]

https://www.theguardian.com/money/2024/oct/07/ive-fallen-out-with-people-the-bruising-debate-over-uk-zonal-energy-pricing

 

Anyone understand why all regions seem to have generation capacity much higher than peak requirements?

[Crofter]

2 hours ago, Alan Ambrose said:

https://www.theguardian.com/money/2024/oct/07/ive-fallen-out-with-people-the-bruising-debate-over-uk-zonal-energy-pricing

 

Anyone understand why all regions seem to have generation capacity much higher than peak requirements?

Because the generation assumes all renewables are going at full capacity. 

If you remove renewables, the remaining generation capacity is about the same as peak demand. Exactly what you'd expect.

[Alan Ambrose]

Oh I see - that’s kinda dumb surely - capacity should be real world capacity no? i.e. what could be generally be generated if nobody was told to throttle back?

 

I guess the economics makes a bit of sense - pay generators less if the grid has to spend lots on that part of the grid to make their electricity viable? Make electricity cheaper around the generators for those who have to put up with the infrastructure?

[SteamyTea]

4 hours ago, Alan Ambrose said:

guess the economics makes a bit of sense - pay generators less if the grid has to spend lots on that part of the grid to make their electricity viable? Make electricity cheaper around the generators for those who have to put up with the infrastructure

I don't think it works like that at all.

 

The CfD (contract for difference) caps maximum payout, while guaranteeing a minimum amount.

This is to draw in investment just as much as making power cheaper.

 

Part of the problem/challenge is to supply reliably, the only way to do this is via overcapacity.  Everyday large thermal plants are disconnected from the grid for a variety of reasons, it is not just RE generation that has variable output and downtime.

 

4 hours ago, Alan Ambrose said:

Make electricity cheaper around the generators for those who have to put up with the infrastructure?

That is a recipe for disaster and would stop major investment pretty quickly. 

No one saw the need to offer lower rates to those living near existing plants, or a pylon out up in the 1940s.

[Crofter]

9 hours ago, Alan Ambrose said:

Oh I see - that’s kinda dumb surely - capacity should be real world capacity no? i.e. what could be generally be generated if nobody was told to throttle back?

It's not a case of being told to throttle back, it's planning ahead for what happens when there is no wind and no sun at the same time as peak demand.