UK Electricity Prices

[Paul KempParticipant @paulkemp46892]

Idly speculating this evening I did a bit of research trying to find a reliable source of info that explains the current price point. I took screen shots of some of the graphs but this infernal apple device saves them as PNG so they can’t be uploaded to this thread! So will try to summarise without!

From trading economics.com which shows spot electricity prices for the last 5 yrs until roughly the end of Q1 2021 since 2018 the spot price wavered a bit but averaged around 52p/mWh. From that point it rose until December 21 where it reached 550p/mWh, that was to my recollection a point before the Ukraine crisis? Through 2022 it was very volatile with the highest peak being around 580p/mWh but probably through the year averaged around 300p/mWh dropping in December to around the current level of 150p/mWh albeit there has been some fluctuation between December and now. So ignoring 2022 for a minute electricity is now around 3 times the previous steady price 2018 – 2022.

Gas prices using info from the Clifford Talbot partnership from 2006 to 2021 were pretty steady at around 30p/mWh, peaked at around 200p/mWh in 2022 and have now settled back to around 50p/mWh. So currently gas is 0.6 times more expensive today than the previous long running average.

National grid figures for 2022 suggest 43% of electricity came from gas, around 40% came from renewables (around 23% of that was solar and wind) and the balance was other sources which I assume was mainly imports.

So we are being told that the massive rise in electricity prices is due to the high cost of gas and yet only 43% of electricity came from gas and the current differential between the cost of gas and electricity is not proportionate?

So what is the truth? Is it driven by the way our electricity market is run that wholesale costs cannot be passed immediately to the consumer and energy companies are still trying to recover huge losses? However when you look at the difference between the wholesale cost of electricity and the cost it is sold to you and me there is currently a difference of around 3 times wholesale to retail! Is the difference disappearing into network, transmission and infrastructure costs or is it going into someone’s pocket?

Anyone got any pearls of wisdom?

Paul.

[Paul KempParticipant @paulkemp46892]

Are we being ripped off?

[Michael GilliganParticipant @michaelgilligan61133]

Posted by Paul Kemp on 07/02/2023 00:46:19:

Idly speculating this evening I did a bit of research trying to find a reliable source of info that explains the current price point. I took screen shots of some of the graphs but this infernal apple device saves them as PNG so they can’t be uploaded to this thread!

[…]

Anyone got any pearls of wisdom?

Paul.

.

Studiously ignoring the political [small p] issues … My pearl of wisdom is

Go to the AppStore and buy this: **LINK**

https://apps.apple.com/gb/app/cropsize-photo-resizer-editor/id742846888

It is simply superb.

MichaelG.

.

Bonus ‘Pearl’ __ Check your Units of Measure

​​​​​I find mWh unconvincing 

Edited By Michael Gilligan on 07/02/2023 07:10:51

[Michael GilliganParticipant @michaelgilligan61133]

[Robert Atkinson 2Participant @robertatkinson2]

52p per milliwatthour (mWh) seems very expensive never mind 550p….

Robert.

[not done it yetParticipant @notdoneityet]

Paul,

Your prices should, perhaps, read in £/MWh?

Big ‘M’ denotes ‘million’ Watts whereas little ‘m’ indicates 1/1000 of a Watt. Only a differnce of 1000 million!🙂

Renewable energy generators used to receive payments for all generated energy. They were guaranteed an increasing subsidy for 25 years of operation. Market price of the generation was not controlled, so generators were ensured of income to pay for the installation, eventually.

For instance, early adopters of solar panels on their roof (and commercial enterprises) were paid about 50p for every unit generated. That payment is increasing yearly, but the ttal amount of generation, at that level of payment, is not that great in the whole energy sector. It was paid to encourage installstions which were a lot more expensive, back then.

That ‘feed in Tariff’ was terminated about three years ago. Commercial investors now are paid by “Contract for Difference” where the ‘strike price’ (price per unit at the time) is determined by ‘auction’ for the permission to build the project and sell the generated electricity. Early contracts were, at tops, about 12p/kWh (£120/MWh) but now (as installation/operation costs fall) seem to be around 4.5p/kWh. These latest projects appear to be expected operational from 2024/2025.

With this system, the generator will be paid the ‘strike ‘price plus increases according to agreement. If they sell at over that price, they pay the difference to the government; if the market price falls, the government will pay the generator the difference to the strike price (at the time) to ensure the generator will survive market fluctuations. I think these contracts will likely last 15 years?

As most of the renewable generation (under this system) is not yet operational, the actual price being paid to generators is fluctuating according to other energy pricing – fossil fuels. This has made the pricing of energy very volatile, particularly this last year . Energy suppliers are cashing in (and may be charged a ‘wind-fall tax’ later).

Government may be claiming they are subsidising energy costs – but it is really the current tax payers and future tax payers who will need to repay the capital amount and the interest on that borrowing.

Do remember, the strike price for hinkley point was almost 9p/kWh (for 35 years of operation) but has now risen to 10.6p/kWh. That was necessary for the project to go ahead. Recent strike price for renewables is now less than half that (and will be operational before that nuclear generation).

The whole energy retail system is a problem. People want more energy at lower prices and retailers want more money from all of us. Pukin is a current problem – but that goes a long way back, because europe has been relying on fossil fuels from there.

Diversification and economy of use of energy is the way out of this problem, but it will require time, money and patience (with dithering government policies). Climate change may well make the whole thing irrelevant within a few years.

[SamsarandaParticipant @samsaranda]

I think it’s fairly clear that consumers are being ripped off by an industry that is set up to service shareholders ! Dave W

[Ady1Participant @ady1]

Privatisation of utilities is always a disaster, it was never done to help people, it was done to gouge people

Britain was energy independent until recently when they stopped coal burning and the oil wells started running dry

Non energy independent countries always suffer in the global system and most end up as "poor"

Knowing the system is out to diddle people means I don't bother looking closely at it anymore but my last good look showed EDF raising French prices by 3% at the command of the French government while in the UK EDF hiked prices by 10%, and that was one single year

You'll will note that our wonderful free press don't talk about these things, they only babble on about "climate change". The people who run and own the media also have vast investments in our dodgy utilities

Edited By Ady1 on 07/02/2023 09:44:03

[BazyleParticipant @bazyle]

I once calculated that in the peak of the home PV installation boom all that PV over several years did not cover more than 25% of the increase households in one year, let alone the pre-existing bulk. The Green Lobby target is just 10KWh per house per day. Have a look at your consumption including gas heating and see where you stand.
It doesn't help that the permitted ground based domestic PV installation is just 9m2 which is enough for a 1KW array or 100W in winter (midday peak).

[not done it yetParticipant @notdoneityet]

Posted by Bazyle on 07/02/2023 10:53:33:

I once calculated that in the peak of the home PV installation boom all that PV over several years did not cover more than 25% of the increase households in one year, let alone the pre-existing bulk. The Green Lobby target is just 10KWh per house per day. Have a look at your consumption including gas heating and see where you stand.
It doesn't help that the permitted ground based domestic PV installation is just 9m2 which is enough for a 1KW array or 100W in winter (midday peak).

Sorry, Baz, but you need to do your maths again. About 50% higher and maybe as much as 80%, for current decent panels, l would suggest.

Depends on type, of course. Higher output panels tend to cost more. Mono- or poly-crystalline cells just for starters.

Agreed, one would need a fair bit more than that, to reach the permitted 3.68kW export limit (currently applicable to most domestic properties).

[BazyleParticipant @bazyle]

NDIY you have to allow for spacing to prevent shading. It is not just the area of the panels themselves but the area of the installation including gaps. The export limit is a side issue as it is not financially viable to use the overpriced panels required for a connected system. The real point I was making is that each house needs a 10KW minimum set up.

Edited By Bazyle on 07/02/2023 12:02:54

[Chuck TaperParticipant @chucktaper]

Paul

Posted by Paul Kemp on 07/02/2023 00:46:19:

I took screen shots of some of the graphs but this infernal apple device saves them as PNG so they can’t be uploaded to this thread!

This may be of use. In terminal type:-

   defaults write com.apple.screencapture type pdf (or gif, tiff, jpeg or whatever)

This will change default file type etc.

Regards

Frank C.

[Paul KempParticipant @paulkemp46892]

All, fair cop on the units, for the record it was Mega and not milli that was intended, rushing as just before bed and fed up scrolling between tabs on the browser but poor excuse for sloppiness, shall endeavour to do better. As per the IT stuff, good tips I am sure but I am not much for computing and as tight as the proverbial duck’s bottom so unlikely to be investing in a paid utility that I will rarely use, thanks for the tip though. As for Chuck Taper terminal type I would be clueless where to insert in an iPad lol.

More seriously though I saw a passing headline today that the Chancellor has millions more to play with, due to fall in gas prices – electricity it seems is still immune as my personal energy cost forecast from the supplier just keeps going up

Paul.

[duncan webster 1Participant @duncanwebster1]

Posted by Samsaranda on 07/02/2023 09:06:27:

I think it’s fairly clear that consumers are being ripped off by an industry that is set up to service shareholders ! Dave W

Maximising benefit to shareholders is what private industry is legally obliged to do. It's called capitalism. Not nice but better than most of the alternatives.

[VicParticipant @vic]

Posted by Chuck Taper on 07/02/2023 12:25:13:

Paul

Posted by Paul Kemp on 07/02/2023 00:46:19:

I took screen shots of some of the graphs but this infernal apple device saves them as PNG so they can’t be uploaded to this thread!

This may be of use. In terminal type:-

   defaults write com.apple.screencapture type pdf (or gif, tiff, jpeg or whatever)

This will change default file type etc.

Regards

Frank C.

There is no Terminal application on an iPad.

And there’s no need for an additional app either. I upload screen shots to this site to post images on here and it doesn’t seem to mind png’s.

**LINK**

But, even if it did, even a minor edit using the photos app on a iPad saves the result as a jpeg.

On a Mac desktop it’s easy to open a png with the photos app and once again resave it as a jpeg, with or without an edit.

It always surprises me how many folks blame software and/or hardware when in fact it’s often operator error?

[James Hall 3Participant @jameshall3]

Simple answer: YES.

Not to mention the sheer stupidity of making Russia richer and damaging ourselves through these misbegotten sanctions.

[Harry WilkesParticipant @harrywilkes58467]

Down to the two 'G's' green and greed

H

[SillyOldDufferModerator @sillyoldduffer]

Posted by Harry Wilkes on 08/02/2023 14:57:12:

Down to the two 'G's' green and greed

H

Greed maybe, but only if you have an alternative way of trading. The global system depends on generating wealth, which is risky, and profit is a good way of rewarding risk takers.

We're all guilty. I bet no-one critical of the massive profits being made by energy wholesalers at the moment gave them any money when they struggled during the Covid slump. Or financially supported any of the 30+ UK energy suppliers who went bust after agreeing to sell energy to customers for less than it cost them.

Truth is there's no loyalty between customers and suppliers. Their job is to sell us what customers want at the best price they can get and our job is to buy at the lowest price we can find. Prices oscillate. Some days you're the statue, other days you're the pigeon. There are no fairy godmothers!

Green isn't driving any of the three major factors behind the current problem. Green isn't responsible for the economic turbulence resulting from the Covid Pandemic. Or for Mr Putin's aggressive foreign policy, and the West's decision to draw a line over his latest adventure. Nor was Green responsible for the cost and ongoing impact of Brexit.

Blaming green is a bad mistake. There's a strong argument Green is the answer rather than the problem, because renewables reduce the UK's dependence on foreign fuels. Times have changed since the UK had plenty of our own coal, oil, and natural gas, from now on we rely ever more heavily on imports. Cosy ways of doing things based on having cheap fossil fuel reserves are coming to an end in the UK, making the need to find alternatives is urgent. The need to go green isn't down to a few trendy lefties incorrectly believing fossil fuels are polluting, it's because Britain's place as a world power and the standard of living of future Brits depends on it. It's not about forcing poor old grandad to change his ways without good reason; it's about making sure the UK economy isn't trashed over the next 30 years by wishful thinking.

Dave

[Paul KempParticipant @paulkemp46892]

Why would we have supported energy wholesalers and resellers when they had to sell it at less than cost? Surely that is a problem with regulation and the “price cap” with regard to electricity. Plain fact is their costs rose but they were prevented in passing those costs on immediately to the customer. That is not exactly a capitalist model? The little guys that folded would have recovered their losses in time but they didn’t have the capital (cash) to ride out the trough. I don’t think any of the big oil and gas producers or wholesalers went bust during covid? Sure they had a tough time with negative profits over a longer period than they have ever endured before but the rebound ably boosted by the Russian situation gave them returns way above their dreams only to have their wings clipped by mild weather this winter! Overall though they have recovered handsomely.

Neither do I believe green will magically make electricity cheaper. The UK is not doing badly in the renewable stakes with around 40% of electricity in 2022 generated by renewables but it has made zero impact so far on the price to the end user! The advantages for householders are purely to those able to generate their own and they can’t even sell anything surplus back to the grid at spot price!

As far as I can see the mechanism of regulation and the way the market is set up is a primary reason why those with a plug in their hand are ever destined to be poor. Wind and solar farms can disconnect from the grid and sell direct and cheaper to hydrogen production for example – but why would they when they can get better returns from the grid?

Paul.

[blowlampParticipant @blowlamp]

The world will consume 8,000,000,000 tonnes of coal in 2023, which is the highest ever figure.

The 'green', Net Zero agenda is a con and those promoting it, know it, or are hugely naive.

I only had to read this document to see it as the work of fantasy that it really is.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1033990/net-zero-strategy-beis.pdf

Martin.

[SillyOldDufferModerator @sillyoldduffer]

Posted by blowlamp on 08/02/2023 22:37:55:

The world will consume 8,000,000,000 tonnes of coal in 2023, which is the highest ever figure.

The 'green', Net Zero agenda is a con and those promoting it, know it, or are hugely naive.

I only had to read this document to see it as the work of fantasy that it really is.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1033990/net-zero-strategy-beis.pdf

Martin.

The fantasy is that humanity can carry on burning 8,000,000,000 tonnes of coal per year indefinitely.

What's your alternative to burning fossil fuels forever Martin? Hope it's more rational than ignoring the evidence and choosing to believe there isn't a problem!

Dave

[blowlampParticipant @blowlamp]

Posted by SillyOldDuffer on 10/02/2023 15:26:45:

Posted by blowlamp on 08/02/2023 22:37:55:

The world will consume 8,000,000,000 tonnes of coal in 2023, which is the highest ever figure.

The 'green', Net Zero agenda is a con and those promoting it, know it, or are hugely naive.

I only had to read this document to see it as the work of fantasy that it really is.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1033990/net-zero-strategy-beis.pdf

Martin.

The fantasy is that humanity can carry on burning 8,000,000,000 tonnes of coal per year indefinitely.

What's your alternative to burning fossil fuels forever Martin? Hope it's more rational than ignoring the evidence and choosing to believe there isn't a problem!

Dave

Did you read the document? There is nothing specific in it – it's a word salad of generalisations and fanciful notions with no evidence that they are achievable.

That document pushes Heat Pumps for home heating, so presumably you can show some proof they can be manufactured, installed and maintained without the use of fossil fuels and will be powered with electricity that isn't generated with fossil fuels.

What's your practical alternative to using fossil fuels for the steel industry, plastics industry and any other industry that relies on them exclusively?

Martin.

[Paul KempParticipant @paulkemp46892]

To drag this back on topic! I have read the linked document plus others like the UK hydrogen strategy and I agree with Martin they are mostly containing fanciful possibilities rather than solid deliverables and are smattered with captions like “for illustrative purposes only”. But don’t forget documents like this have great value as they distribute significant funds between the various consultants employed to assemble them.

I agree with SOD, whether you have interest or belief in the climate change argument or not, generating electricity from renewable sources as opposed to depleting finite fossil based deposits makes perfect sense. However we must not lose sight of the fact that if coal mining reduces other forms of mining will still be increasing to provide the ingredients for all these green machines. Copper doesn’t grow on trees, it is recyclable but recycled copper, lithium, graphite etc will go nowhere near supporting demand – but again that is a different argument.

Where I fundamentally disagree with SOD is green electricity is cheap or is ever likely to be cheap! It might be cheap(er) to generate but the way the market is structured (which is supposed to ensure low prices by competitive bidding) it’s never likely to happen until the last expensive nuclear generator is decommissioned. Within 3 miles either way from my house are 2 solar arrays of reasonable size and within 10 miles as the crow flies a large offshore wind farm, the latter having been on stream for well over 10 years. Last year around 40% of electricity in the UK was renewable, that’s a pretty decent inroad, anyone seen their electricity bill drop, even by a penny?

Paul.

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