Why are UK electricity bills so expensive? • Hacker News Board

Re: Why are UK electricity bills so expensive?

#171

Post by Nextgrid » Fri, Dec 20, 2024, 8:49 PM UTC

KaiserPro wrote: post #136

jatin101 wrote: post #22

Commercial energy broker here - the only 2 'real' costs in your price are the wholesale and supplier costs. Choose suppliers that offer a fully-fixed electricity contract, so that made up variable costs such as distribution, network, etc are all factored into the unit rate that the supplier charges you for your contract. Avoid smart meters at all costs. Renewable / green contracts are always a lot more expensive than…

Disclosure: I have a house battery. over the last three months, I've been paying on average 16p a unit. Thats with a car as well. On the days in the winter when solar isn't doing shit, we top up at the lowest price that day. This kinda goes to the articles point which is to you can avoid, or limit the peak with local storage. The issue with the battery is that its costs a shit tonne. a basic battery is going to cost…

The unsaid, "quiet part" about batteries is that they're a fire hazard. No matter how "safe" they are branded as, the failure mode is disastrous and life-threatening when they do fail. It's insane that those things are being sold and installed in homes at all. But then again this is in a country where installing solar power inverters in the attic of wooden houses was also a thing (no surprises as to what the outcome of a failure would be).

Proper solution is to pool them in a dedicated buildings so you still get the benefit of locality at the neighborhood level while containing the consequences of a failure and limiting them to property damage (vs potential loss of life), but that would use up land that can otherwise be used as a way to (literally) seek rent, so it cannot happen.

Re: Why are UK electricity bills so expensive?

#172

Post by [deleted] » Fri, Dec 20, 2024, 8:54 PM UTC

graemep wrote: post #161

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…

[deleted]

Re: Why are UK electricity bills so expensive?

#173

Post by grapesodaaaaa » Fri, Dec 20, 2024, 9:01 PM UTC

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.

I was also going to point that out. Resistive electric heating costs could easily reach that much, but it’s a horribly inefficient way to heat your house.

Re: Why are UK electricity bills so expensive?

#174

Post by IshKebab » Fri, Dec 20, 2024, 9:02 PM UTC

skippyboxedhero wrote: post #104

IshKebab wrote: post #8

Yeah the "network costs" bit should probably have a caveat about how they are a natural monopoly and are absolutely rinsing the UK for profits. https://www.theguardian.com/business/2022/nov/20/unite-union... "Supplier costs and margins" probably should take a fair bit of the blame too. When Thatcher privatised the UK energy industry to make it "competitive", they basically created an entire complex web of middlemen.…

They aren't rinsing profits. Out of the £1700 average annual bill, supplier profits are £43...this is significantly higher than has been the case normally because of the volatility in energy prices. This return is also controlled by the regulator. For scale, the cost of government subsidies is £183. Predictably the first thing the incoming government did was: announce massive new subsidies, and create a state-owned e…

You're mixing up two things. Suppliers (middlemen) aren't making any profit because the government has capped prices. They literally can't. But even when they could they didn't make that much profit because there's pretty good competition between them because consumers can choose.

The issue with suppliers is they are spending a ton of money dealing with complexity that shouldn't exist, so even though they aren't making a profit they're costing you unnecessarily.

The people who are making a profit are DNOs. Totally different thing.

Re: Why are UK electricity bills so expensive?

#175

Post by dtgriscom » Fri, Dec 20, 2024, 9:04 PM UTC

Nitpick: such recurring costs are not "expensive"; they are "high". It's like saying a plane is flying at a "large" altitude, or a car on the highway is traveling at a "big" speed.

Native english speaker, but definitely not a grammarian, so I can't explain why...

Re: Why are UK electricity bills so expensive?

#176

Post by singhrac » Fri, Dec 20, 2024, 9:11 PM UTC

7thaccount wrote: post #164

singhrac wrote: post #157

Earlier quoted context omitted.

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 t…

Sorry, I didn't mean to imply you hadn't, just offering a reason why I had a strong opinion.

Am I misunderstanding what you mean by counterparty? In the US, banks provide the tax equity and sometimes the project finance, but the PPA counterparty is a consumer, i.e. a utility or a large load (e.g. tech company data center). The forecast is necessary, but like I said, the uncertainty can be hedged.

Well, I'm talking about how linking a nodal market to a capacity or ancillary service market is necessary (i.e. purely nodal market without payments for reliability don't make sense). Texas's energy-only design would not have been saved from the 2021 disaster via a capacity market or a zonal price (gas availability dropped by 45%).

I think the PCM was always misguided and unnecessary (from just cursory understanding). I don't have time to respond to all the points about various capacity markets, but unfortunately a busy time of year, and will respond later.

Re: Why are UK electricity bills so expensive?

#177

Post by klasma » Fri, Dec 20, 2024, 9:11 PM UTC

Hamuko wrote: post #160

Aachen wrote: post #99

Earlier quoted context omitted.

We're at ~3.6 MWh in a ground floor apartment with 2 adults, with water heating (e.g. showering) electric but building heating on gas (though we use a space heater a lot as well, probably to the tune of 0.2 MWh/year)

I wonder if I should feel bad since I'm currently at 2830 kWh in 2024 for a single household with all heating costs not coming out of my electric bill.

I‘m at ~1200 kWh for what sounds like the same.

Re: Why are UK electricity bills so expensive?

#178

Post by desas » Fri, Dec 20, 2024, 9:15 PM UTC

Nextgrid wrote: post #130

jstanley wrote: post #24

Earlier quoted context omitted.

But why do you need smart meters at the level of individual houses? Wouldn't putting them on substations get the same benefit with much less cost?

In a competent implementation, real-time metering can enable near-real-time pricing where consumers are incentivized to vary their consumption to help grid stability. Your EV can modulate its charging very quickly, and "background" loads like electric heating, water heater or even A/C can also be modulated somewhat quickly (though not as quick as an EV's inverter). The meter needs however to make sure you indeed comp…

Octopus are already doing this in the UK,so it does actually happen.

Re: Why are UK electricity bills so expensive?

#179

Post by bob1029 » Fri, Dec 20, 2024, 9:16 PM UTC

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…

> Octopus

I was briefly a customer of theirs in the US while they were still doing variable/index/wholesale rates. They wrote a good article about this:

https://octopusenergy.com/blog/index-prices-are-under-threat...

Re: Why are UK electricity bills so expensive?

#180

Post by Brybry » Fri, Dec 20, 2024, 9:18 PM UTC

ajb wrote: post #114

ZeroGravitas wrote: post #44

Earlier quoted context omitted.

Apparently the UK government estimated that in 2016 and 2019 the average household saved £11 on their bill due to this feedback from smart meters. This page estimates the cost at £15 so 2/3rds is recovered just from that effect.

There's no way it only cost £15 in total to install a smart meter. The cost of the meter has to be at least that much and then you have paying a guy to actually install it (which in my case took 3 attempts and caused a gas leak, which took 4 or 5 guys several hours to fix - although hopefully that's unusual).