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Electricity prices - what next?

AJJewsbury

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.

  • in reply to AJJewsbury
    AJJewsbury said:
    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..

  • in reply to Jon Steward

    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

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