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Fossil fuels, price caps and long term trends...

mapj1

So from today's (3-2-2022) announcement ew now know that the upper cap prices for gas and electricity are to change so from 1 April costs  to the nearest pence for a typical customer paying by direct debit will be 28p per kWh for electricity customers and 7p per kWh for gas customers.

Looking at the wholesale prices the suppliers pay shows not much for them to live off. (from this website)

Beware the 3 sets of funny axes, orange for oil in dollars per 200 liter barrel, and gas and electricity in UK pence per kWhr

Last year at this time the cap prices were 2/3 of their April values approx, but the wholesale costs were about half. It seems far from clear to me that even the now reduced set of suppliers will all survive another year if trends continue.

Against this the UK derived about 25%  of it's electricity from wind farms last year, and for some of these the guaranteed "strike price" that once looked like a govt subsidy  is now below the market price, so the turbine owners are actually paying the difference back to the govt. , something that was not expected for many more years.

But while the North Sea is if not exaclty empty of oil and gas, certainly  well over it's heyday, and we do not really have the national strategic storage reserves that importing countries usually have.

So to me it seems we have perhaps painted ourselves into a corner, and short term sales of thermal underwear may well have increase to compensate and all that means for the future birth rate ;-)

Should we be building more nuclear plants, coating old houses with spray foam  and generally being more careful than in the past, when the power was more or less free-issue ?

Are the politicians right to talk of 'blips' or is this the beginning of a bigger change ?

Mike.

Parents

  • More nuclear is obvious and even rehab existing nuclear stations ASAP.   

    Oil costs can be converted to kWh costs if the refinery costs are included in the 200 litre barrel charge, because one litre of oil will produce about 10 kWh of heat but if power plant is only 50% efficient then 5 kWh seems more realistic or a megawatt-hour per barrel.

    The idea that burning imported wood is zero carbon is really misleading as CO2 gas is definitely produce and worst still we are causing deforestation elsewhere in the world. 

    We still have huge coal reserves and need to develop these and most importantly a way of secreting the carbon dioxide somehow into the ground possibly as calcium carbonate or some other carbonate.

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  • More nuclear is obvious and even rehab existing nuclear stations ASAP.   

    Oil costs can be converted to kWh costs if the refinery costs are included in the 200 litre barrel charge, because one litre of oil will produce about 10 kWh of heat but if power plant is only 50% efficient then 5 kWh seems more realistic or a megawatt-hour per barrel.

    The idea that burning imported wood is zero carbon is really misleading as CO2 gas is definitely produce and worst still we are causing deforestation elsewhere in the world. 

    We still have huge coal reserves and need to develop these and most importantly a way of secreting the carbon dioxide somehow into the ground possibly as calcium carbonate or some other carbonate.

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