Electricity prices - what next?

I do not see why everyone seems to think that more expensive electricity is OK, I certainly don't.

I certainly don't either - but that's where our persistant over-reliance on imported fossil fuels is surely taking us. Had we started investing in local (renewable) sources earlier we perhaps wouldn't be in such a difficult position now and could have spread the cost of investment more thinly over a longer period, but we are where we are. We either pay the Russian's price for gas indefinitely, or we invest in new plant that can generate without needing fuel - for me the long term strategic choice is obvious. Either way the short term will certainly see higher prices.

Unless energy prices are similar in all countries (they are not now) there is severe economic damage to be had for those that are more expensive. We already see this in the UK, and for countries that do not have a free market (China) there is a massive trading advantage in manufactured goods.

Direct comparisons with the like of China are difficult - as you say they don't internally have a free market and prices and, probably more significantly, exchange rates, are manipulated as much for very long term political ends as immediate profit. There will always be differences by geography of course - parts of Scandinavia have traditionally had very low electricity prices due to an abundance of hydro electricity - so have hosted aluminium smelting and more recently data centres. Regions will have to play to their individual strengths.

Because storage has to be paid for "up front" Andy, your calculation is rubbish

I'd dispute strongly that it's rubbish. It's an approximation, certainly, I could do you a discounted cash flow over the a reasonable period if you wanted, but given the current low interest rates the difference would be relatively small. There would be much more variation due to changes in the cost of the equipment - new technology always costs more initially but then declines as designs are rationalised and mass production produces savings. In the case of home battery storage, I gather there are new designs in the pipeline that use 2nd hand electric vehicle batteries, which seem likely to cut capital costs of the batteries significantly.

borrowing money in trillions of pounds is pretty much impossible by private industry (the Electricity Grid).

That's where proper organisation at government level comes in. If done cleverly it becomes a matter of persuading those that have money to invest long-term rather than expecting the tax-payer to cover all the costs directly in a single hit or private companies to borrow with no long term guarantees. While many of the details might not have been right (e.g. the actual size of subsidies), there have been successes in persuading private capital (I suspect mostly pension funds) to pay for wind farms and even individual householders to shell out around £10k a time for PV panels.

  - Andy.

I still haven't figured out how to quote in here yet. :-(

"Direct comparisons with the like of China are difficult - as you say they don't internally have a free market and prices and, probably more significantly, exchange rates, are manipulated as much for very long term political ends as immediate profit."

China may have made itself attractive to western companies, but we didn't have to put our factories there. IMHO, it has been a grave strategic error.

Back to the price of energy - Putin must be having a real giraffe.

I still haven't figured out how to quote in here yet. :-(

"Direct comparisons with the like of China are difficult - as you say they don't internally have a free market and prices and, probably more significantly, exchange rates, are manipulated as much for very long term political ends as immediate profit."

China may have made itself attractive to western companies, but we didn't have to put our factories there. IMHO, it has been a grave strategic error.

Back to the price of energy - Putin must be having a real giraffe.