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Electricity prices - what next?

Electricity prices look to be soaring. Seemingly the tariff I'm on isn't one of those covered by the government's price cap and it looks like the price per kWh for this coming year will be over 80% higher than a year ago. Presumably everyone else will see similar increases soon - when the price cap is next revised in April if not before - or even higher increases as the delay means their suppliers are even more out of pocket. Presumably gas prices will increase by even larger proportions.

It seems the recent inflation is primarily down to demand exceeding supply in the international wholesale gas market causing the price to rocket.

Because of the way the UK wholesale electricity market is organised, if I've understood it correctly, the most expensive generator needed at any point in time effectively sets the price for the entire market. One interesting consequence of this seems to be that those renewable/nuclear generators who have agreed a fixed 'strike price' with the convernment (which for recent wind was lower than the typical price for gas generated electricity) have to charge their customers the full market price, but can only keep the 'strike price' and have to return the remainder to the government/regulator. Effectively renewable customers are in a way subsidising fossil fuelled generation, rather than the other way around - which presumably wasn't the intention.

Hopefully things will stabilise a bit as winter passes - but what's the long term outlook?

"Reforms" to the wholesale electricity market to better protect the whole from changes in price of just one fuel?

An acceleration in the move from using imported fossil fuels for generation to more locally sourced energy (mostly renewables)?

A greater emphasis on demand reduction (more efficient appliances/lighting, significantly better insulation for buildings)?

More "time shifting" of demand - to times of day were there's non-gas generating capacity available?

Another look at minimising distribution "losses" - look again at BS 7671 appendix 17 perhaps?

   - Andy.

Parents
  • Clearly fossil fueled power production is much the cheapest, so why would anyone in their right mind stop it?

    How do you come to that conclusion? Even before the current hike in gas prices, new off-shore wind was coming in cheaper than gas-fuelled generation. On-shore wind should be cheaper still. The costs of the (still relatively young technology) renewable generation equipment is still falling - fossil fuel fuelled generators are well established technology and so have little improvement still to make.

    If storage is not available the cost of the backup supply also needs to be added, including its construction cost, and again they are bad.

    Why would we need to construct backup generation when we already have it in short/medium term in the form of the existing gas plant that's being displaced? Converting existing coal fired plant to biomass (as Drax has already done) is another option (if slightly more controversial). Technically, we could manage without fossil fuels for perhaps 90% of the time relatively easily - a very big step in the right direction (in terms of security of supply even before any environmental benefits). I agree that the last say 10% will be much more difficult - we have some answers already, still more reasonable possibilities, and no doubt room for some innovation and new invention - it could be a good time to be an engineer!

    I'm a bit puzzled about the panic over upgrading domestic supplies for heat pumps and EV charging. Simply replacing existing gas boilers in old poorly insulated buildings with heat pumps would be madness and I don't think that even Boris's mob have actually suggested that - even if the  government blundered badly by ditching the changes to the 2016 building regs that would have made new buildings properly insulated. The challenge to my mind in insulation - do that right and the space heating load for a typical domestic is more like a couple of kW - which wouldn't strain even a 60A supply if done by direct resistive heating let alone a heat pump. Likewise there are already charge points available that'll automatically reduce the charge rate to ensure the supply isn't overloaded. Even at a reduced rate the car will be fully charged by morning in any event. The French use a lot more electricity per head than we do - yet typically survive perfectly well on to 30A or 45A single phase supply. There might need to be a few changes - e.g. hot water from a storage cylinder heated off-peak, rather than instantaneous electric showers, but that's hardly an earth shattering technology shift. 

    Suggesting that scrap car batteries could be used for backup is delusional, as the only reason to scrap a battery is that it has failed!

    Not at all. It's well know that Li-Ion batteries loose capacity over time. Once they're down to around 80% capacity they're of much less use to power electric vehicles as there's insufficient range for the given weight & space - and most manufacturers intend to change them once they fall below the 80% mark. If you're not worried about the weight/space issue however (e.g. by adding more batteries for the same capacity) you can still get much useful life out of them - so ideal for static installations. In much the same way that off-gridders used to use 2nd hand lead-acid submarine batteries, or the market for part-worn tyres.

       - Andy.

  • Even before the current hike in gas prices, new off-shore wind was coming in cheaper than gas-fuelled generation.

    Can you produce the evidence of this statement please. All costs including dismantling, landfill, subsidies etc..

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  • Even before the current hike in gas prices, new off-shore wind was coming in cheaper than gas-fuelled generation.

    Can you produce the evidence of this statement please. All costs including dismantling, landfill, subsidies etc..

Children
  • This is not a good article especially, an organisation that receives the bulk of its funding from the EU. I suggest anyone reading this article checks out the people https://eciu.net/about/the-team who have no industry experience and little balance in its makeup.

    https://www.newcivilengineer.com/latest/the-uk-energy-crisis-is-wake-up-call-to-accelerate-switch-to-renewables-22-09-2021/

    _________________________________________

    A bit if sanity. No doubt he won't be heard. 
    There are an awful lot of players out there who are doubling down and saying we need to speed up the transition to renewable to make the system  more resilient and less reliant on imported fossil fuels. It's enough to make you weep! There is so much ignorance as to how the national grid actually works!

    www.infrastructure-intelligence.com/.../we-need-rebalance-reach-resilient-net-zero-energy-system

  • This conversation is pretty amazing and I cannot help but stir it up. Whichever way you look at it the key is sustainability and the part of this everyone misses is the financial sustainability of being green. A lot of this has been touched on, yes green does cost more; if you want a heat pump and an electric car you will have to pay for some cabling and once everybody wants it the main supply cable and the sub-station will not be big enough so that will get added onto your bill.

    Then the demand for electricity will go up because everyone has a heat pump and two electric cars and there will be less spare electricity capacity and the bills will go up.

    Once the bills go up the industries employing people will start to struggle and look to move manufacturing to cheaper countries (fortunately this has not started or all our houses will be filled with cheap chinese goods) at which point there is a surplus of labour so employers do not have to pay so much and having the heat pump on becomes a luxury, fortunately there is no need to run the car!

    Does anyone believe this is all going to go a differently to what is above?

    I think green is excellent but there does need to be a balance in there somewhere and perhaps some of the answers are in the past such as; live near to where you work and not where you dream to live (yes I mean the people travelling more the 20miles each way); send your child to the local school in walking distance and not the one with the best rating which you have to drive them to (if they have the inclination they will still succeed); buy stuff that lasts and buy stuff manufactured in the same country in which you live if possible; do not buy stuff in plastic (does anyone else remember when glass bottles were washed and refilled?) and ..................

    Renewables are good and companies operating them get a really good subsidy from the government and nuclear stations are really expensive to build but perhaps that is the biggest problem. All our utilities are supplied by companies who want to pay shareholders dividends every year. Perhaps it is almost like countries such as France having utilities nationalised ensures a long term reinvestment unlike today. Strangely enough Frances nationalised utilities also like to buy French made equipment which helps to sustain their economy!

    Oops I forgot that wind and solar both run through inverters so we still have to have some traditional generators for frequency control.

  • The frequency control part is another aspect.Current grid stability thinking is firmly wedded to 20th century ideas associated with pure mechanical mechanical generation where shaft speed and generation frequency are more or less linked (minus a bit of slip)

    You do not need frequency to drop and phase to lag with increasing load on an electronic inverter type system, but it can certainly be programmed in, and probably should be. Actually end user load shedding on frequency drop is an elegant control scheme and perhaps one of the few  mechanisms that may be fast enough to be of use on a non-spinning grid. Anything going via the internet is unlikely to be fast on the millisecond timescale.

    M.

  • Load shedding on frequency drops? Mike you may think that elegant, I think it is disasterous.The whole of our infrastructure depends on a 24/7 electricity supply. To even consider turning bits of it off to reduce requirments has so many negative effects that one would need a book to list them all. Lets do a power cut to a large plant with many CNC machines. Do you think that suddenly turning off the power would do no damage or ruin no workpieces? It would do both because it is completely unexpected, and could be vastly expensive. Load shedding is a last resort and needs to be done very carefully indeed. Rotating synchronous machines do not have "slip" either, but they do have enormous stored energy to overcome sudden changes in load, such as a fault. Inverters have very little to zero stored energy and so cannot deal with these events, they simply shut down making the situation worse.

    The problem with this idea from Government is that it has no sound engineering basis. No one has yet described how our offshore wind (much of which may well go offline today due to strong winds) can ever provide this 24/7 supply, deal with surges, or rapidly changing supply conditions, like the end of a TV programme when hundreds of thousands of kettles are turned on at once. A sudden load of hundreds of MW can only be dealt with by having spinning reserve capacity which is fully controlable in output, unlike windmills or solar. This is the conventional power station, or gas turbine supply, high inertia, lots of stored energy and response within a cycle or two.

    Given enough storage some of this may be overcome, but we basically only have enough to keep conventional power stations under control. The hidden cost of wind and solar is that without conventional power stations they do not work at all, and should have to PAY for the necessary assistance. At once they become completely uneconomic and therefore useless. I have a relation that works for a large wind company. Even on enthusiastic days he admits that the subsidy system is the only reason the business continues, and that maintenance costs are becoming a problem as the turbines age.

    The cost of electricity can only rise, and rapidly, and there is little prospect of correcting the system. I won't even go near the electric heating and cars myth, the hidden costs are huge, but completely unmentioned. Basically you can have an average of 1-2 kW and that is it. More will cost £3.5 trillion at least, and with the spiralling cost of cable and metals can only rise. Economics was never the strong point of politicians, it rarely sounds good to the electorate so is a vote looser. I don't care about votes, simply mistakes will cost huge numbers of lives in this cold country. The old and poor who cannot afford to live will be brushed under the carpet as human rubbish, but I care. Forget saving the planet, it is quite safe, it is humanity that is not.

  • you misunderstand my idea-  the demand reduction is then load-side - you do not need to forcibly cut off at district level as you imagine - that is what is done now, and as you say it is very brutal. 

    Consider instead to perhaps have a low frequency dropout 'money saver' box that you put next to your non-critical loads like immersion , storage heaters or car chargers - any load where you'd be OK with a short interruption in return for a lower tariff.


    At the moment the pie in the sky idea is that the internet of things will sort this sort of issue with smart tariff switching and lots of WiFi traffic etc - but I think we can be sure  it will not be fast enough in an overload state - unlike traditional spinning generation, inverters will not ride out short-duration over loads. All the generators need to do is to lower the frequency when under strain, and the load side kit can do the rest.

    M.