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Why are UK electricity bills so expensive?

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Re: Why are UK electricity bills so expensive?

#161

Post by graemep »

jillesvangurp wrote: post #89

An important reason that power is expensive in the UK is that it doesn't use zonal pricing and is effectively not giving the right price signals to consumers of power to move closer to where the cheap power is (e.g. data centers) or to conserve power when power is expensive; or producers of power to invest in power generation closer to where the power is scarce and expensive. Another point to make is that the nationa…

> Even Scotland which either exports or curtails dirt cheap wind power most of the time gets to pay expensive gas rates for their power

1. window power is not "dirt cheap" because of the rates the wind farms get paid. As you said they get paid the wholesale rate, and IIRC it is the greater of the wholesale rate and a minimum rate they are guaranteed by the government.

2. the reason curtailment happens UK's is because there is a lack of grid capacity to take it where it is needed. Most of the wind generating capacity is in Scotland, which has about 10% of the UK's population. This part of the problem would be helped by cheaper rates when there is excess energy, but increasing the use of wind power would mean higher bills because of 1.

The cost of fixing this will mean building grid capacity, so it means higher electricity bills.

There is a good explanation here: https://climate.benjames.io/uk-electricity-bills/

The TL;DR version is we built wind power when it was expensive, subsidised it at those prices, and now are stuck with paying for it at those prices.

Re: Why are UK electricity bills so expensive?

#162

Post by Symbiote »

6510 wrote: post #127
kevin_thibedeau wrote: post #75

Earlier quoted context omitted.

It eliminates the need for staff to manually read them and guarantees they are read correctly every month.

That is the sales pitch, the error rate on the overcharging side is infinitely larger than that of mechanical meters. Not a fun lottery to win.

The alternative isn't a mechanical meter anyway. It's an electronic meter that must be read manually.

Re: Why are UK electricity bills so expensive?

#163

Post by Hamuko »

conradludgate wrote: post #123
conradludgate wrote: post #120

Earlier quoted context omitted.

My energy supplier (Octopus) gives me a tarrif with half-hourly pricing (smart meters in the UK only report with 30 minutes resolution). This let's me know when electricity is in less demand or high supply and schedule my day around it. Making my electricity bill cheaper and likewise putting less strain on the supplier which reduces their costs too

The other week, it was not very windy but it was cold, so the energy price spiked pretty high (£1/kwh). Other times the energy price falls pretty low, and I regularly see it be negative for some hours of the night or rarely up until the afternoon. Paired with a home battery it can be pretty effective, but I don't have one and instead I just work around it and use my electrical heating more when it's cheaper and rely…

Just shifting some electricity usage around is a pretty solid tactic with dynamic pricing.

I'm currently paying wholesale + 0.49 c/kWh margin for my electricity and I'm averaging out to 6.67 c/kWh (incl. margin) in December. Wholesale average has been about 6.61 c/kWh. Add transfer and tax on top of that and it's around 0.13 €/kWh total.

I live in an apartment so the two big electricity-wasters are the dishwasher and the washing machine. Delaying doing the laundry by a couple of days or running the dishwasher half a day later keeps the average much lower. And if you have an EV, just charge it during the night when wholesale prices get closer to 0€.

Re: Why are UK electricity bills so expensive?

#164

Post by 7thaccount »

singhrac wrote: post #157
7thaccount wrote: post #108

Earlier quoted context omitted.

Zonal also has issues with congestion, lack of locational price signals, and something called inc/dec gaming. A Nodal design (like in many US wholesale markets) fixes this, but some of the key policy makers are reluctant to go in that direction as it would be a ~7 year project and would introduce revenue uncertainty in the meantime when they are trying to decarbonize and need to make it easy for developers to get fin…

Yeah, I'm not sure I understand your argument here. I work in the area. I can understand revenue uncertainty, but the solution is to sign a PPA. When Texas transitioned to a nodal market many existing generators got grandfathered into zonal pricing via free options, which is doable (e.g. any project built in the next 5 years will get this free option). Give me an example of a "missing money" problem. I don't think th…

I've also worked in the area for many years.

PPAs typically require the bank to be counterparty and that requires a forecast of the prices that will be received in the market over a lengthy period. The folks at Ofgem talked about how going nodal would be nice, but that they are worried about it being such a big project (these markets typically take 5-7 years to go from design to implementation in the US) that would take focus away from what is already mostly working for them. Overall, completely changing the market structure leads to uncertainty that investors don't like.

The grandfather point is a good one. Something could possibly be done there, but not sure of the complications.

The missing money problem is very much a real thing. You're right that capacity markets and other resource adequacy mechanisms create side payments to fix this, but not everyone has that. Texas infamously had an energy-only design that hasn't worked out so well and is why they have so many ongoing proposals like the PCM to address the reliability issues. It is also why fast start pricing has been pushed so hard by FERC. Even with the capacity markets, there are numerous issues such as the extremely high prices in PJM that is leading to numerous lawsuits and condemnation from their independent market monitor. The markets work well at reducing costs, but there are a lot of ongoing issues being addressed in numerous stakeholder groups and at FERC.

Re: Why are UK electricity bills so expensive?

#165

Post by graemep »

threeseed wrote: post #144
Xelbair wrote: post #134

Earlier quoted context omitted.

People might not like this, but that's true. as long as non-western countries keep polluting - even if we achieve net-zero nothing will change other than us feeling better and patting ourselves in the back.

This is a very misguided view of the situation. a) The transition to clean energy, transportation etc by Western countries funds the development and investment in new technologies. These then filter down to developing countries when the economies of scale kick in e.g. solar panels, electric cars. b) There are also other benefits to cleaner solutions than just trying to achieve net-zero. Reductions in pollution reduce…

I think you overestimate the importance of what the West does. The West no longer dominates the world economically. Things no longer filter down the rest of the world as simply as you think. China is a bigger economy than any Western economy than the US, and is growing. India is about as big as any European economy. Both, and many other countries are doing more and more of their own R & D and have their own agendas.

Re: Why are UK electricity bills so expensive?

#166

Post by richwater »

creato wrote: post #58
tristor wrote: post #39

Earlier quoted context omitted.

> Did PG&E cause the fire? Yes. As I recall it, the fire was caused by downed lines that were energized during a dry spell, and the reason the lines were downed was due to negligence around maintaining the C-Hooks holding their high voltage transmission lines. PG&E knew that they needed to be replaced every so often, had a policy that dictated when they needed to be replaced, and then ignored that policy which ultima…

I agree PGE was negligent, but it also doesn't make sense to assign the entire cost of the resulting fire to PGE. The scale of the fire damage was a result of many factors, only some of which are due to PGE. A huge destructive fire was a matter of time. Whether it was caused by PGE, lightning, or an RV tire blowout was a matter of chance. Or another way to put it, how much liability would you give the RV drivers in t…

> . A huge destructive fire was a matter of time.

You can't avoid legal ramifications by saying _something_ was bound to happen

Re: Why are UK electricity bills so expensive?

#167

Post by bpodgursky »

gsk22 wrote: post #129
bpodgursky wrote: post #121

Earlier quoted context omitted.

This is an extreme outlier. I have a 4,700 square foot home in the Midwest, electric heating (heat pump + backup direct heat) and only occasionally hit $300/mo in a cold spell.

Heat pumps are something like 5-6x as efficient as resistive electric heaters. So no surprise that your bill would be lower. Of course, heating an entire house with (non-heat-pump) electric heat in a cold climate is kind of crazy. Natural gas is way way cheaper. But I've seen it in old houses here in the Upper Midwest, so it's not _too_ out of the ordinary.

Heat pumps are so affordable now, that just feels like a poor decision-making rather than an economic hardship. You could finance a heat pump and the savings would pay itself off in a year.

Re: Why are UK electricity bills so expensive?

#168

Post by chickenbig »

this_user wrote: post #10
samatman wrote: post #6

Third option not discussed: have the military leverage its existing nuclear reactor competency to build a fleet of nationalized nuclear power generation stations. I'm not saying that they should tile the island with submarine-scale reactors, I'm saying that their supply chain for building those knows how to build nuclear power stations. The only thing which makes this prospect expensive, is the lack of political will…

And how exactly would adding more of the most expensive way to generate power help reduce costs? See: https://www.theguardian.com/news/ng-interactive/2024/may/24/...

> And how exactly would adding more of the most expensive way to generate power help reduce costs?

Yes, the Australian GenCost report is about generation costs (no mention of transmission or storage in that graphic, for instance).

The https://www.electricitybills.uk breakdown shows that the cost to the consumer consists of far more than just the cost of generating electricity. Intermittents generally connect to the distribution network (given their smaller output). Intermittents necessitate transmission upgrades because wind farms are in a different location to people and require overbuilding of capacity. Intermittents require more balancing because a passing cloud or lull in the wind affects their output. Intermittents require capacity payments for the backup (methane) generators that have to keep on standby.

Plus let us not forget that the intermittent generators get revenue from RO, CfD, and FIT.

Re: Why are UK electricity bills so expensive?

#169

Post by alecco »

fragmede wrote: post #146
Xelbair wrote: post #134

Earlier quoted context omitted.

People might not like this, but that's true. as long as non-western countries keep polluting - even if we achieve net-zero nothing will change other than us feeling better and patting ourselves in the back.

Knocking the western 30% of pollution down to zero is still meaningful, even if the remaining 70% isn't affected (which it will be). China, one is the most polluting non-western countries, is going to renewables and electric vehicles at a faster rate than some of the western countries.

* acording to CCP's reported numbers

Re: Why are UK electricity bills so expensive?

#170

Post by fakedang »

omnibrain wrote: post #155
jillesvangurp wrote: post #89

An important reason that power is expensive in the UK is that it doesn't use zonal pricing and is effectively not giving the right price signals to consumers of power to move closer to where the cheap power is (e.g. data centers) or to conserve power when power is expensive; or producers of power to invest in power generation closer to where the power is scarce and expensive. Another point to make is that the nationa…

It's exactly the same in Germany. In addition the state government of Bavaria in the south east does everything to keep wind power from being built in their state and worked against high voltage power lines to bring cheap and abundant energy from the north to his state.

To be honest, Bavaria isn't the ideal place for wind power imo, WHEN THERE ARE ALTERNATIVES.

Braindead Germany just woke up and decided that they want to do away with nuclear and suck the icy cold teats of Mother Russia.

Wind isn't suited for inland Germany, especially in a place like Bavaria, which has the frickking Black Forest ecosystem and a mountainous terrain. Not to mention the winds are much slower there than in North Germany. For the cost calculus that wind energy provides, it's best suited for underutilized offshore areas or desert climates.

Germany forcing wind power is basically a sorry excuse they have to compensate for their energy shortfall - wind and solar can be deployed relatively faster, but of course solar doesn't make sense in Germany, hence the government is trying to shove down wind.

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