The French nuclear corrosion debacle is keeping spot prices quite high right now, and the uncertainty there is hammering gas futures as that the ‘replacement’ power source come winter. Every windy day over summer will reduce the gas risk slightly as would a windy and warm autumn.

 

If the gas storage is full it will only keep Germany going for about 2months without input in winter?

I just dont see how UK energy prices can reduce unless we can stop our supplies going abroad or the world market price drops and i dont see either happening any time soon.

I only hope that these high fuel prices encourage people to look at their consumption. My son visited friends recently and they had 2 televisions permantly on during the day with nobody watching.

 

I read somewhere that a single BASF chemical plant in Germany uses as much gas as Belgium each year.

 

I liked the: "Electricity Prices set to fall" title!

The fact that it seems so out of place now reminds me of how dramatically things have changed in the last few months. When that thread was started we were in an unusual position with a few nukes offline and little-to-no wind. Prices had risen dramatically but this was assumed by everyone to be temporary.

Then Putin rolled into Ukraine and it now appears that the high prices are here to stay.

I've been saying for many years that energy was too cheap. The price didn't reflect the damage caused to mankind in the form of climate change. If something is expensive we conserve it and use it carefully. That said, we need to ensure that the low-paid, sick, or disabled can afford to get about and keep their houses warm. I've long argued for a negative standing charge paid for by a higher unit price. (I'm sure there are some people on here who are bored of me banging on about it). However the powers that be seem to be marching in the opposite direction.

 

I think whether prices stay as they are, increase or decrease, what we should all take away from this is awareness of how much energy we waste as a society. Lights on in shops even when they're closed, TVs left on (as someone mentioned in an earlier post), can't be bothered to switch to LED bulbs, electric heaters on to keep feet warm, refusal to layer up so people just stick the heating on, the list goes go. For a start maybe big supermarkets should be mandated to turn down lights, have enclosed refrigerators rather than the open chest version that are common across all supermarkets.

But rather than waste money on heat pump grants, why doesn't the government actually subsidise solar panels - or do they need us to be totally dependent on the grid?

 

We could have much lower energy prices if we didn't care about consistency of supply. We could also keep our spaces cooler, but we need to increase capacity in the health care sector substnatially. The consumer price cap is either completely meaningless or it increases the long-term expected cost of energy. There are no simple solutions. Yes, we have allowed sectors to get by without paying for externalities for years, both consciously and unconsciously.

The problem with the grid is keeping it stable. The cost of this is going to rise substantially as we add more intermittent and local generation. Batteries solve the shortest cycle problems, but not the week-on-week issues in the winter. Again, if you don't mind no heating for 5-7 days when it gets down to -10 at night, then not a problem.

 

I'm disappointed that the self-appointed thread police seem to have succeeded in their attempt at disrupting a perfectly reasonable long-running thread that many people have made good contributions to. And why? For no purpose other than their sense of "order".

Have we become such sheep that we bow to every request to regulate our behaviour?

 

I couldn't see it mentioned but Eleclink (the channel tunnel 1GW link to France) went live commercially yesterday.
No fanfare as far as I can tell over here and the only article stating it actually happened as planned is in French but the data suggests it is alive! See Here

 

I have a concern that if the Chancellor ( under extreme pressure from all areas) offers some kind of enhanced “package” of support, this will, like the plug-in grant and the heat-pump grant and the solar-grant……just disappear into the wrong coffers…and actually PROLONG the pain rather than tackling the real problems, many highlighted above.

 

Why can't they just send money directly using the winter fuel payments system?

 

@Anahata you can only buy LED bulbs nowadays… (not completely sure for GU10’s..).

 

Agreed!

 

At the present price of PV and leccy then subsidies are not required and thats why its very difficult to find an installer.

 

Except PV is subsidised, though fossil sources get an even greater subsidy. The VAT differential is a direct subsidy. Not that this subsidy is inherently a bad, or good, thing. Technically not having to pay income tax on the self-consumed PV generation is a subsidy (falls under the tax expenditure area).

 

The price cap is to stop cos milking the system from captivated customers. Before the throwing the doors open the price was pretty stable and cos would make big profits some years and lower next but those days went particularly when we became dependant on overseas suppliers of primary fuel.

Nowadays if there was no cap then all those gone bust companies would increase their prices to way above the cap to make ends meet so as is the case if operating on the spot market with very little edging.

 

.....'Electricity Prices set to fall".....

You need to put a "when" on that too 😉:

Energy prices to remain significantly above average up to 2030 and beyond - Cornwall Insight

Research from Cornwall Insight looking at Great Britain’s (GB) Power Market out to 2030 has shown energy prices will remain in excess of £100/MWh annually.

www.cornwall-insight.com

 

If we, as a society, accept this sort of report at face value we are making it harder than necessary to make the transition away from fossil fuels (it says, e.g. "Prices are expected to rise to £150/MWh in Winter 2025 due to closures of nuclear power stations, delays to Hinkley C, and increasing high-cost peaking capacity. Renewable generation capacity will rapidly increase to meet targets and will help meet rising demand; however, marginal gas-fired generation sets power prices. ").

As long as marginal gas-firing sets prices then people will see no benefit in switching from gas central heating to an ASHP because leccy priced based on gas will cost more to heat a house than by just burning gas, regardless of the gas price.

To break the link we need to do something like pricing gas generation separately (because it will be needed for firming during wind lulls) and only allow them to cover their costs. The rest of the market can work however it works just now, just with gas excluded. Then, if the general wisdom is true, the cheaper leccy with its price unlocked from gas, will be a true incentive for us to make the switch.

 

https://www.renewableuk.com/news/606445/-New-project-launched-to-boost-number-of-women-working-in-offshore-wind-.htm

Will this help bring prices down?

 

Picking up on the point of security in premises where lights are left on, why not stipulate that lights must be off, and fit motion detectors to activate lights and alarms.

 

Businesses aren’t really efficient, but if they were and are stilling doing this, then they expect this is ’better’. Forcing them to switch in that case is a tax, much better to just tax their electricity in that case.

 

How much electricity is used by businesses unnecessarily? Offices, shops, warehouses and factories lit without any activity, heating and machinery left on?

If everyone turned off unnecessary energy consumption, would this save 10% 15% or even 20% of power. And therefore at what point would we be chased to buy more power with cheap prices?

 

Our office was designed to be very energy efficient and all the light and hvac zones are on motion sensors so they turn off if nobody is present. There are a small number of staff on shifts in the office (some call centre staff and the cyber SOC centre) but I imagine its pretty decent and that is the benefit of zones. Everyone pretty much is on laptops too so no PC’s left on overnight either. it does have one of the gold ratings too but I can’t remember the certification.

I really wished I’d pulled the trigger on solar a few years ago now. As me and my wife are home based we’d definitely benefit from it during the day.

 

I'm a fan of motion sensor operated lighting, we had it at work and I fitted it here when I built this place. Lights that are only needed for a short time, like the hallway, utility room, toilet, services room, walk in wardrobe and a couple of big cupboards, as well as all the outside lights, are all on motion sensors. Also makes things a lot easier at times, for example our back door leads into the utility room, so having the light come on as you come in, is handy. Same goes for the hall lights and the front door. Also means we can't accidentally leave any of these lights on.

 

We did one better in our house in NZ, I pointed out to the architect that he had created a long dark corridor in the sleeping zone. No problem we’ll put in a solar tube! Not only do you get light when the sun shines bur also when the moon shines too!
There was a story of an electrician who having isolated the CU then walked round trying to find out why the light was still on in the corridor…..

 

Yeah we had one fitted to our cleaning cupboard at home and apart from the odd random activation from what I can only assume is the heat from the UFH (all the pipes converge in here for the manifold) it works great. Most of the other lights in our house are hive/hue and come on at sunset and go off at the set period which also works well. Never used the geofencing as ironically got them just before Covid and now we hardly Leave the house these days except for leisure so never set it up.

 

You forgot the pumped storage at Coire Glas, although that will take a little while, and the payback mechanism isn't clear. I think your price forecast is optimistic but the divis are decent. I've a good multiplier of your holding too ;-),

 

There are projects offshore Ireland on the back burner and stuff in the latest Scottish tranche. And of the 25 GW of new Scottish, SSE own the majority of the wires on which it will arrive on the mainland!

 

Can they rework the current pricing schemes? Cheaper renewable providers don’t seem to get benefits from high wholesale prices as they have to pay it back under contract for difference, so why not allow each provider to be paid what they’re bidding, rather than ‘a rising tide raises eveyrones prices’ that they have now? Wouldn’t that significantly reduce the overall cost of energy if the majority of generation is sold in at a lower price?

 

Not as long as you have a near single price spot market*. All it does is redistribute the surplus from one producing part to another (there is some benefit if it moves to the party with a lower temporal discount and/or closer to risk neutral approach).

The contracts that are in place were done to reduce risk at the time. They were likely ‘inefficient’ but even efficient ones will reduce your expected future value. The fact that they gave up some of the upside at the start is part and parcel of what was ‘needed’. if renewables are cheaper, and the barriers to entry are low (not the case right now in much of the UK) then they only become more attractive as the price rises. You don’t invest in the what you expect will be marginal production point unless you can get regulatory capture to charge rents.

*my understanding is that there are actually two independent spot markets, which means there won’t be truly single prices.

 

So this article seems quite hopeful in tone. Is it just gobbledygook, or is it the way forward?

Wholesale market design ‘no longer fit for purpose’ for rapidly decarbonising system – National Grid ESO | Current News (current-news.co.uk)

The favoured option for wholesale market reform is a nodal location-based wholesale market with central dispatch, according to National Grid ESO's report, which analysed over 1,500 individual stakeholder interactions.

Nodal pricing divides the national network into different nodes, each of which has its own wholesale electricity price which reflects the cost of supplying electricity at that location.

When coordinated by central dispatch, this could help unlock efficiency savings and provide an easier route to market for small, flexible assets, the ESO said.

Indeed, it found that found that real-time, dynamic, locational signals are needed to inform how both supply and demand assets dispatch in operational timescales, with neither national nor zonal pricing able to deliver efficient locational signals as GB transitions to a net zero energy system.

 

Looks like they’re drawing up plans now for blackouts in winter that could hit 6m people according to The Times. The modelling is suggesting a worst case scenario that our imports from Norway could half and we get no gas over the Netherlands and Belgium interconnectors meaning we’d have to shut down gas using industry as well as any gas power plants. Having no major gas storage could really come back to bite us in the backside if the worst is realised. And that’s not even the worst case scenario if Putin turns off the taps to Europe entirely then massive blackouts across the entire eurozone including the U.K.

I know this is The Times and this is modelling is coming from the current government but these scenarios has crossed my mind as well as a pretty obvious way things could play out. Having battery storage to get through the power outages could be a wise investment if you can get them installed before winter.

 

How many of the LNG tankers currently clogging up Milford Haven (@Brian G ?) would we have to commandeer to make a dent in the amount of storage we'd need?

More seriously, and back to the topic, I'd like to say a big thanks to whoever posted this link a few weeks back in another thread:
PowerPoint Presentation (nationalgrideso.com)

This is National Grid's take on how to manage wholesale electricity pricing as we move to ever-higher levels of renewables on the grids. Basically the current model of one single national wholesale price causes inefficient allocation of generating resources, resulting in double subsidy payments when under a different system no subsidy would be needed. The best model to address this, according to National Grid, is a hyper-local (nodal) system where prices are determined at the most local level possible (a "node" isn't actually defined in the presentation - anyone got a definition?). Now, in principle I'm sure this sounds fine, but a couple of aspects of it may be scary from the consumer's perspective:

1. The document talks of "how much should the consumer be exposed to the locational price variations"
2. The preferred model seems to be the ERCOT system of Texas - you know, the one that charged people up to $9,000 $/MWh ($9/kWh or about £7.20/kWh when the normal UK wholesale price is more like 10-20p/kWh) in the middle of unseasonably cold weather back in Feb '21.

So it would seem we need to be alert for proposals to "deregulate" the pricing model and get complaining if it seems they are going that way - Octopus Agile as we know already exposes people to the rollercoaster of the wholesale price, but they do at least have a cap of 35p/kWh. I would hope that sort of consumer protection stays in place as a minimum - it's unfair to expose vulnerable consumers to the extreme prices we can see in the middle of winter when the companies serving them should have broad enough shoulders to soak up the seesawing wholesale price.

 

The sheer arrogance in the statement just drives me nuts. Just can’t avoid the opportunity to have a dig or put the boot in. Cant simply be humble or constructive

A Whitehall source said: “As a responsible government it is right that we plan for every single extreme scenario, however unlikely. Britain is well prepared for any supply disruptions. Unlike EU countries, our North Sea gas reserves are being pumped out at full pelt, Norwegian rigs are directly connected into the UK, and we have the second-largest LNG import infrastructure in Europe — whereas Germany has none. Given the EU’s historic dependence on Putin’s gas, the winter could be very hard for countries on the Continent.”

 

Part of the issue which may not be clear is that internal fighting in Germany is the cause of the problem. At least 2 LNG terminals were proposed up near Hamburg years ago but the Greens said no; gas is not the future. At the same time they have been closing nuclear plants which had some years of life still in them. The Nordstream 2 was to provide them with cheap Russian gas. That reliance on Russian gas has now become the problem. LNG is a very flexible source of power as far as I can make out. It has to be made i.e. refrigerated under pressure, but given that it reduces the volume of the gas by 600 times it can be the source of stored power. Germany's VTG, a company that makes rail wagons has proved that you can ship LNG by rail and that the trucks can store the gas for some time (forget the timescale but it was at least 6 weeks) so it is possible to unload ships directly into rail cars and take it to the end user, power plant or process factory. A train of 20 trucks carries an awful lot of gas. I don't think this press release carries full details but you get the idea.

Pipeline to go: LIQVIS and VTG test rail-based LNG transport in cooperation with Brunsbüttel Ports

- Successful trials carry LNG from Brunsbüttel Ports to Uniper power plant in Ingolstadt in special tank wagon - Sustainable transportation of this alternative fuel will boost the energy transition

www.vtg.com

Lithunia's new terminal is featured here:

I believe they use older LNG carriers and convert them as floating terminals. It can be done in months. You cannot say that Germany doesn't have the wherewithal to do that surely? Given that we are in a war situation it could have happened in months. The site in Bruensbuttel is there and has been for years waiting for development.

There is also the Gate terminal in Rotterdam which can ship gas to Germany by pipeline. Whether there is constraint on that I don't know but according to reports I have found it is still working only at quarter capacity. That may be more to do with getting contracts for the shipping organised but it does show lack of foresight somewhere.

The US dropped out of the LNG market but has come back into it big time and is shipping it to the UK and Europe now. The ships come from the gulf of Mexico so it is a rather long trip though some do come from Carolina I believe saving many days. So whilst the US can't fill the full gap of Russian gas it can go a long way.

The European gas storage data is here (don't rely on the UK data which hasn't changed for weeks) but Germany has a lot of storage and it has gone from 32% as at the beginning of May.

KYOS - European Gas Storage - Home

The press release isn't helpful it would have been better to speak the truth to say the UK has been supporting Europe and the potential power shortage by running our gas and electricity interconnectors hard to support the Ukrainians and Europe against the Russians.

 

I wil come back to the question of gas tankers supplying uk later. Need to get plenty of fingers and toes for that. There are so many zeros involved.

 

To answer the tread title:-