Watt the ...

[Spartacus]

There's a growing movement demanding action on energy costs where they are calling for a mass boycott of paying direct debits to domestic energy suppliers (#dontpayuk) and they are liking it to the poll tax riots.

Whilst there is no doubt that prices need to come down, are they targeting the right companies in tje right way?

Most domestic suppliers are resellers buying gas and electricity from bigger companies, including the three who posted astronomical profits this week. The resellers are at their whims as they set the price based on global demand , global supplies and what the market is desperate to buy at (currently demand is HIigh as the world is trying to avoid Russian Gas)

If we all don't pay our bills, the resellers may fold like they did a year ago leaving fewer companies to provide energy directly to homes.

How do we target the big suppliers which is where the real increases come from? The amount they produce us roughly the aame as a few years ago so it's not really lack of supply.

A windfall tax is already being levied yet it won't cover some of the recent profits.

Refuse to pay and they will sell to other countries who are more reliant on Russian Gas.

There has to be a way to bring the global market back into balance and it possibly needs multiple governments working together to force the big suppliers to reduce prices.

The question is what can we, the end user, really do to influence things without cutting our own noses off ?

Oh and the OFGEN decision to review the process cap every three months (next just after Christmas) has to be the nail in the coffin here.

[malumbu]

Biggest criminals are successive governments for privatising the sector and failure to support better insulation of our homes

Good points though

[diable rouge]

Well, it would be helpful if we actually had a functioning Government rather than the PM and Chancellor both away on holiday at the same time during a major economic crisis that's about to blow-up and get out of control come the autumn.

Instead the country is being spammed daily for weeks on end by a ridiculous Tory/PM leadership contest, with the protagonists more concerned with a manufactured culture war so they can throw red meat to a selectorate that is probably one of the most insulated against the effects of the cost of living crisis.

Neither of them has a coherent plan how to tackle the crisis, and during these 'debates' not enough time or even the right questions are being asked as to how they are going to deal with it.

Before last night's latest 'debate' the Telegraph journalist Juliet Samuel suggested some questions that should be asked...

1. How will you keep the lights on, factories running and homes warm this winter?

2. What are you/the government doing to ensure we have access to enough gas imports if Europe cannot supply us with the gas we usually rely on every winter? Are we signing new supply contracts? Why not?

3. Do you believe there's a realistic prospect of getting significant gas supplies flowing from the North Sea or British shale this winter?

4. What are you/the government doing to reopen British gas storage facilities as quickly as possible so we can stock up for winter, as Europe is doing?

5. Are you prepared to reopen coal plants temporarily to see us through the winter?

6. How can the government launch an emergency insulation scheme to insulate as many homes as possible this summer/autumn/winter? Especially in social housing and private-rented, the worst-served sectors

7. Will you announce more welfare for households struggling with extraordinary energy and food bills? On what scale?

8. What will you do if the "Don't Pay UK" energy bill strike reaches scale? Will you support the bill strikers? Would you bail out our biggest energy suppliers if needed?

9. How will you stop the NHS falling over this winter, given that it's already in acute stress?

Or, of course, they could go with the usual mix of fatuous, pointless question about shoes, earrings, "quick-fire", "your naughtiest moment" and "trust in politics".

My understanding of the "Don't Pay UK" protest is that people will initially stop paying their monthly direct debits and then wait for the quarterly bill to arrive and decide how much they can afford to pay, taking into effect other bills, in particular food bills. Seems a perfectly reasonable and rational thing to do to me, if people haven't got the money to cover all their bills then they have to prioritise, and no parent is going to put a heating bill before making sure their child gets fed.

Unless the new PM gets on top of this very quickly, then yes, I can see this becoming the Gov's 'Poll Tax moment'...

[Spartacus]

There are some very good questions there DR

The interesting one is gas storage, from what I've seen a lot of the facilities that used to exist and store gas have been removed and developed on (prime real estate) which makes reopening them rather difficult.

Of course the argument should have occurred years ago over why are we closing them.🤔

As I mentioned earlier, this is a global issue fuelled (excuse the pun) by the oil and gas drilling companies selling to the highest bidder. If the government of the UK steps in and subsidises gas bills for either consumers or suppliers, then the drilling companies will be still making extraordinary profits at the tax payers expense. The real issue is how to get them to agree to cool the market down and reduce wholesale prices.

Could we nationalise the big drilling companies? possibly but at what cost to the treasury, how quickly and what happens to them when we transition away from oil and gas to renewable energy, will the nationalised companies be a millstone around the government's neck as there will be little investment in the future due to the high buyout cost.

Again, great to think of insulating houses, but how quickly realistically can it occur, obviously not in time for this winter as technicians aren't growing on trees.

It's a difficult issue to solve, and it needs to be looked either globally, or European level wise as simply saying "we will pay less per barrel" will just see drilling companies sell elsewhere to the highest bidder.

[malumbu]

UK has reasonable security of supply. The Labou to government put in additional infrastructure as our North Sea fields became depleted. Long term storage was due to our gas fields so we could fill during summer when demand was less and wholesale price lower.

Issue is global prices not supply

[malumbu]

Labour government

[malumbu]

France is an interesting case study. After the war they didn't want to be dependent on importing fossil fuels. They also wanted their own nuclear weapons capability. So went almost full on nuclear power. Planning was fast tracked. Sweeteners were no doubt handed out in affected areas.

The UK had a similar but more modest programme. Thatch was a great fan, partly due to the then power of the NUM, but maybe also as a a science graduate. Then she ditched nuclear and supported gas fired power stations. Contributing towards the mess we are in now. Her about the was also due to privatisation of the sector, due to nuclear liabilities and the large capital investment. Subsequently we lost a generation of nuclear engineers and our ability to build nuclear power stations, relying on French investment and Chinese engineering/constellation.

The Germans made even greater mistakes.

I dont just rant here, I wrote to government asking for an apology over botched energy policy. I know more about the subject than the civil servant who drafted the reply. Not that I am having a go at them, having to work with the worst government in my living memory

[Spartacus]

Here's a random thought

Cornwall insight have predicted the price cap could reach £4,200 per annum in January based on current trading prices and modelling.

Could it be that they are predicting high so that any increase below that feels like a win for the consumer "oh its not as high as predicted" sort of thing ?

In a few days we will know the Ofgem figures and whilst it will still be a shock and painful, will it be as high as predicted?

[diable rouge]

There are already millions in fuel poverty and many more will be joining them this Autumn, so for them it's a rather moot point whether it hits £3k, £3.5k, £4k etc come January.

Here are some sobering figures...

10m Britons have savings of less than £100.

The poorest 25% of households have average savings of just £2000 (scraped together over entire lifetimes)

The proposed Truss NI 'handout' equates to about an average of £60 off the fuel bill, and that excludes those who don't even earn enough to pay NI i.e. the very poorest

Whoever wins the Tory leadership better have deeper pockets than that pittance...

[TheCat]

Hilarious how i've heard not a peep from the green lobby (or any of the middle-class eco warriors who seem to frequent this forum) who have driven the reckless loss of energy security in the UK over the past 20 years or so. Forced closure of coal generation to be replaced with renewables with no proper storage solutions to ensure its dispatchible energy.

Sure...global energy (mostly gas) prices are high, but our extreme level of exposure to those high prices was completley avoidable and forseeable.

Im sorry, but there is no way possible that you can now blame global fossil fuel companies....if they had their way over the past 20 years, they would have developed a shedload more production capacity than they currently have. Which would have eased availability, which would have eased prices. But green zealots protested every time they tried to invest in more capacity....and now here we are....

Actually, i'll correct my openeing statement, the only time we now hear from the green lobby is to shriek about how the answer is 'more renewables'.....they remind me of the US gun lobby, where after every gun-based massacre, the answer is always 'more guns'.....

[Jules-and-Boo]

It's hardly the Green Party's fault that we have an energy crisis.

They are not the leading party and are not able to enforce climate changes that they have long been lobbying for.

It is the Tory government who have not initiated an increase in - eg wind farms, insulation programmes or reducing the reliance on fossil fuels.

The Tory Government is self serving, not forward looking and driven by profits.

It's hard to see who else to focus this on.

[malumbu]

Bally hell Cat. I know you like being controversial but surely you are not an apologist for the fossil fuel industry

There's being growing evidence on climate change since the 70s but the industry did their best to discredit this, helped by their neocon mates

Some have rebranded, other are still pure evil like Exxon

[TheCat]

Im a strong advocate for the need to decarbonise. I have worked professionally for a leading climate change thinktank. Im in no way an apologist for use of fossil fuels.

But I am a pragmatist, and what I said should in no way be controversial. We need to decarbonise, yes, but the truth is that the manner in which this has been delivered by govts of all colours, has been totally reckless...and cheered on all the way by green activisits and 'armchair eco warriors' who have absolutley no idea of the practical complexities of transitioning an entire generation system away from fossil fuels (outside of 'wind good, coal bad'..which is a gross oversimplification and reckless display of ignorance)

Blame fossil fuel companies all you want for climate change, sure. But they can in no way be blamed for the current crisis in which we find ourselves....their self-interest would have actually largely averted it, if left unchecked....

Sure our decarbonisation trajectory would have be slower had there been a more sensible trasition strategy.....but we wouldnt have these crisis like price moves, and (even worse) the real possibility of load-shedding come winter.....

A reminder of what I said on another thread on here nearly 12 months ago on this exact issue.....

"But the UK's reliance on Nat gas peak load style generation (as a result of closure of coal-fired base load and replacement with intermittent renewable capacity) means that the whole system is vulnerable to Nat gas price rises. The cost of Nat gas electricity generation is also far more sensitive to the price of gas, than coal fired generation is to the cost of coal, or nuclear to the cost of U308. So the increases in the cost of coal and uranium we've seen recently would not flow through to the cost of generation in the same way as they have for Nat gas.

So, you are quite correct that the changes generation mix hasn't created a gas price spike. And that is in no way what I've said. But the mix of generation that we have has created a system VULNERABLE to that gas price rise..becuase we have low proportion of coal or nuclear baseload (which CANNOT be like for like replaced with intermittent renewable capacity, as battery/storage technology is not developed enough yet to make that a sensible way to transition) which would not have seen the same rise in cost of generation as we have seen with Nat gas, despite the increase in cost of those generation fuels."

Edited August 11, 2022 by TheCat

[Spartacus]

What I'm still failing to grasp is that companies like EDF claim a large proportion of their energy is renewable yet the price they charge is dictated by the gas and coal fired energy suppliers so are they making a profit

In slight support of Cats statement, only slight, what happens when the wind drops and its dark? The renewable energy suppliers still haven't worked out how to store electricity whilst it's windy and sunny so on a still dark night when home consumption is highest, the grid needs alternative sources to keep lights on which is mainly fossil fuels.

[TheCat]

What I'm still failing to grasp is that companies like EDF claim a large proportion of their energy is renewable yet the price they charge is dictated by the gas and coal fired energy suppliers so are they making a profit

In slight support of Cats statement, only slight, what happens when the wind drops and its dark? The renewable energy suppliers still haven't worked out how to store electricity whilst it's windy and sunny so on a still dark night when home consumption is highest, the grid needs alternative sources to keep lights on which is mainly fossil fuels.

 

Its becuase the price of electricity in each market is typically set by the marginal cost of generation at any given moment. The generators do not set the price, the market does. There will be a generation cost curve..so if you line up all the available power at anyone time from lowest cost to highest cost, then at that same moment in time, draw a line where the demand for power is at that moment, then where that line cuts the supply cost curve is how much the wholesale power price will be at that moment. Any available power at a higher cost will remain unused, hence why typically higher cost peak generation is only needed at times when when demand is very high (a bit of a simplification, but hopefully makes sense). So, the lower cost generators will make margin, and the higher cost guys will make next to nothing, or will not sell any power to the grid if in excess of demand requirements as per the cost curve. And given changes in demand at different times of day, plus the mix of what power is available (I.e. no low cost solar at night, or low cost wind when not windy enough), the price will move about accordingly.

And you're correct, once battery storage becomes cost efficient at large storage capacities, then boom, job done, intermittent generators can store power and it can be despatchable (I.em available at any time on demand).

Until then....fossil fuels (or nuclear...which is zero carbon) is what what we need in the mix to ensure security of supply....

[Spartacus]

It's not easy being green

BBC News - Climate change: Drought highlights dangers for electricity supplies

https://www.bbc.co.uk/news/science-environment-62524551

Talks about the issues of green energy during heatwaves or periods of bright sun and how green generation is down at the moment across Europe as well as here

[malumbu]

Catching up on posts I'll repeat what I've said many times. The poor decision was moving to gas and neglecting nuclear. Thatch was a big supporter of nuclear, then did an about turn in 1989. Before that she had planned new nuclear build every year, Sizewell B was underway, to be replicated at Hinkley Point (approved), Wylfa, and a Sizewell C.

Involved massive state funding, and it was just too easy to abandon nuclear and build new generation CCGTs.

Energy efficiency, insulation and the like also went in the back burner.

We don't have an energy security issue, we still have too much dependency on gas in particular with the hike in wholesale prices

I never bought shares in privatised utilities. I expect we know many who did, for a quick buck.

[Spartacus]

Wow

I didn't realise that Germany has one of the highest household Gas Bills in Europe and now they are imposing a levy on households to cover the cost of replacing Russian Supplies.

Just don't tell our Government 🤣

BBC News - German households face levy of hundreds of pounds on gas bills

https://www.bbc.co.uk/news/business-62554464

[Angelina]

EU is promoting sharing of gas and reduction in usage to avoid any economic crash, which would affect all members.

Germany is the biggest user.

[TheCat]

Does anyone on this thread understand 'load factor'?

If not.... Please explore......

Then let's chat about renewables and generation mix......