Decisive action to break influence of gas on electricity prices

[SteamyTea]

Don't anyone tell @Roger440

 

https://www.gov.uk/government/news/decisive-action-to-break-influence-of-gas-on-electricity-prices

 

 

[ProDave]

in 4 years the time gas sets the price will have reduced from 60% to 50%

 

Don't expect to see much reduction in your bills any time soon

 

Britain has already moved from gas setting the price of electricity around 90% of the time in the early 2020s, to around 60% today. Through the government’s clean energy mission, it is estimated gas will set the wholesale price around half of the time by 2030.

[Alan Ambrose]

One of the effects of the current mechanism BTW is that conventional generators including renewables get windfall profits every time the gas price spikes. Even with 'the levy'. I dare say they like that.

 

As long as the gas peakers are needed then the marginal price will largely be set by gas.

 

Peaking power plant - Wikipedia

 

>>> New plans include long‑term fixed‑price contracts for renewables, protecting families when gas prices spike

 

The financial markets are very quick to create new futures / forwards / options / swaps / CFDs etc if they think there's any demand - they don't need any government help to do that.

 

All-in-all the current industry players are not unhappy with the current situation.

[Roger440]

6 hours ago, ProDave said:

in 4 years the time gas sets the price will have reduced from 60% to 50%

 

Don't expect to see much reduction in your bills any time soon

 

Britain has already moved from gas setting the price of electricity around 90% of the time in the early 2020s, to around 60% today. Through the government’s clean energy mission, it is estimated gas will set the wholesale price around half of the time by 2030.

 

In other words, no meaningful change. Just a few %.

 

That not much more than background noise. They could have completely de-linked it. They still choose not to. 

 

This is another classic case of the PR and reality being worlds apart.

 

And they choose not to, as too much money is being made.

[Roger440]

5 hours ago, Alan Ambrose said:

 

 

All-in-all the current industry players are not unhappy with the current situation.

 

Indeed. and if they think its good, you can 100% sure, its not good for the consumer. And it isnt.

[Roger440]

7 hours ago, SteamyTea said:

Don't anyone tell @Roger440

 

https://www.gov.uk/government/news/decisive-action-to-break-influence-of-gas-on-electricity-prices

 

 

As above, this isnt the great breakthrough that we both know is actually required.

 

Essentially being seen to do "something" whilst allowing business as usual.

[Alan Ambrose]

@Roger440 re: They could have completely de-linked it.

 

You have a scheme for that? My understanding is that it's the gas-driven 'peakers' that provide power when everyone else is at max output (or offline) - hence it revolves around the price of gas.

[Mike]

3 hours ago, Alan Ambrose said:

You have a scheme for that?

Not Roger, but pay-as-bid is one leading proposal. In other words, if providers A, B and C offer their electricity at £60, £80, and £200 per MWh then, if they are chosen, pay them £60, £80, and £200, rather than paying all of them £200.

[torre]

7 hours ago, Mike said:

pay-as-bid

Was pretty much ruled out.

 

If you're A and bid 60 on Monday and Tuesday but look over at C being paid 200, how much are you going to bid on Wednesday? 

[SimonD]

Maybe I've missed something but that linked document appears only to outline a revised Cfd arrangement. Where is the gas marginal pricing de-linking mechanism? And for taxing extra-ordinary profits? Why not just cap the profits in the first place?