Energy Prices (Strictly NO referrals!)

[b0rn2sk8]

It’s not at all like our water system and there absolutely is both a USA national (less Texas) grid and interconnectors between different utilities within each state.

The part you are missing about the USA system because you are reliant on chat GPT is the wider provincial system that exists within the states and how much of their system is devolved.

There is competition between different states and within individual states there is competition between municipalities. The utility companies are generally controlled by their governments and are a part of that competitive landscape alongside tax, housing etc. That’s the point MKW was making.

In essence it’s a completely different way of doing things and energy prices are just one piece of the puzzle.

Interestingly, energy prices in California are quite high but I would hazard a guess that there are a bunch of ‘green’ levies embedded in the price.

 

[danlightbulb]

and how much of their system is devolved

Which is good because?

I'm not saying these regional prices don't exist I'm saying it's not been designed that way to maximize resilience or social good, it's just evolved that way.

Our electricity in the UK used to be regional boards as well. They still exist at wholesale level but not retail level. That's broadly why we have different SC but common unit rates.

Just because something exists in a certain way already doesn't make that solution optimal.

 

[b0rn2sk8]

Which is good because?

I'm not saying these regional prices don't exist I'm saying it's not been designed that way to maximize resilience or social good, it's just evolved that way.

Our electricity in the UK used to be regional boards as well. They still exist at wholesale level but not retail level. That's broadly why we have different SC but common unit rates.

Just because something exists in a certain way already doesn't make that solution optimal.

You tell me, I’m just setting out that there are key fundamental differences in the way things are done in the USA which makes it difficult to compare to.

A national price doesn’t maximise resilience, quite the opposite actually. It encourages high energy businesses to build their operations in places which have capacity constraints which creates risk and higher costs. For example data centres are currently rammed into London and the South East where practically they would be far better being much closer to the generation in the East of England, Scotland and North East.


Flat pricing does not really do anything for social good. Making people in the north who have less money (on average) pay more when generating is actually cheaper and effectively subsidising the richer south is regressive.

A national electrify price isn’t ‘optimal’, it’s largely driven by ideology and a perception of ‘fairness’.

Like it or not, generation in certain parts of the country is more expensive than others.

Producing 100mwh of wind power is cheaper almost anywhere in Scotland than Northamptonshire. So why should people in Scotland pay the same as someone in Northamptonshire. That’s the opposite ideological argument to what you have been putting forward.

Likewise why should someone in London pay a higher standing charge than someone in the north of Scotland when the cost to get electricity to that person in London on the logical grid is negligible compared to someone in hamlet in the north of Scotland.

Flat rate pricing is far better at giving certainty for what the price will be now and in the future. For example if a load of energy intensive industries move into the North East because of its low price. It probably wouldn’t be low anymore as there is far more demand in that area relative to generation.

Flat rate pricing and zonal pricing both have advantages and disadvantages. No one sensible is claiming either way of doing things is some kind of utopia.

But as it stands, the pitch for zonal pricing currently has more pros than cons but the detail of the implementation has not been published so it is hard to come to any conclusions.

 

[SDK^]

Octopus offering half price EV charging tonight - 3.5p kWh

 

[chrcoluk]

Nimby isn't the main issue its just a bonus. The nationalised pricing model is. Now that could be changed yes, as I said its unclear what the main motivation is for the changes.

One of the major factors is that UK wide energy costs mean there is no point moving or placing high energy using industries closer to generation.
So we all end up paying more for larger grids moving energy from what could be LOCAL grid networks to NATIONAL.
Eg data centres could/should be placed further away from London than they are, they could easily be placed coastally and benefit in working the same way as nuclear, using water as a major heatsink to help with the cooling, and the energy to power them being attached to the local grid.

If you got to the US, energy costs do help make decisions on locating things. The UK nope.

Zonal pricing make a lot of sense right now. It could made to be less sensible but that needs other changes.
There are many directions we could go, but right now the market is idiotic. Its harking back to pre nationalisation.

It makes less sense to have national pricing than a national service charge.

The 100k thing is an issue in that what we used to do to benefit the country has long gone.

We don't price stabilise most stuff so thats an invalid argument.
Commercially it makes little sense for eg a broadband provider to charge differing prices as that makes advertising very difficult, so for them its not worth the hastle of price differentiating.

Tesco for example price food different in differing store types sometimes, or restrict the range to in effect force into higher cost variants. Why don't we demand they are the same. Food being probably the most important essential we can think of.
The food industry has been found to vary pricing based on competitors locations.

The simple reason governments are scared of stuff like you mention is that its the sort of thing that can massively impact their vote for significant years/decades so its a particularly dangerous thing to do, for them. For little benefit, for them.
As ever there needs to be balance and reforming planning or relaxing has to be carefully considered.

As I said before, I struggle to see anything really thats not price stabilised outside of stuff that was previously nationalised.

I suspect as ever those who are against it will be in areas protected from the changes needed, and expect others to put up with it whilst they accept the benefits.

100% as Richie says we have to fix the idiocy of a SC thats regionalised and a unit pricing mechanism that isn't, when the SC is amongst the lowest in the areas with the lowest generation and vice versa.

As I said before we really need to see what the main factors they want to promote are and what solutions that could bring.

Ofcom enforce regional market conditions on broadband pricing, so it does go beyond advertising, but yes broadband suppliers would know there is a problem if some secluded rural area is paying £200 for broadband whilst a city resident is paying £20.
I could have made a far bigger list on subsidies but the post would have got silly, another example is deliveries. Whilst food prices are not the same in every store, and not all products are in every store, they are still clearly subsidised, if they were not there would be much bigger price differences between inner city areas and small remote villages. Without subsidy and government interference BDUK, gigabit vouchers, etc. the likes of scotland remote areas, wouldnt even have FPTP, never mind at the price they get it.
Governments will obviously be wary of letting this sort of thing happen, and I think for good reason, once people found out their natural reaction would be that it is unfair, we already have some not happy with the variance in SC, and this would be a much bigger thing.
There is a good argument from the wholesale -> supplier, but I dont see the argument for the consumer pricing, unless maybe you live in one of the cheaper regions and put yourself first, in particular if you are one of the very nimby's.

Your one argument seems to be to keep nimby's happy. I havent read anything else that explains why there needs to be radically different pricing based on post code. I do prefer to wait though until a decision is announced, as we dont know what it will be yet, it may end up be something in between as a compromise, or indeed have price stability attached to it.

 

[Mercenary Keyboard Warrior]

I'm not saying these regional prices don't exist I'm saying it's not been designed that way to maximize resilience or social good, it's just evolved that way.

Neither has the UK since it was nationalised.

Your expecting private money to invest for the social good in the UK!?

One advantage of zonal pricing is that it actually creates a position where investment is likely to not all be in areas with high generation as they will see prices impacted if teh keep building more solar in the east and offshore along the east coast and north of Scotland.
Creating a pricing model where building that generation in other locations makes more sense than just the highest generation areas.

Ofcom enforce market conditions on broadband pricing, so it does go beyond advertising, but yes broadband suppliers would know there is a problem if some secluded rural area is paying £200 for broadband whilst a city resident is paying £20.
I could have made a far bigger list on subsidies but the post would have got silly, another example is deliveries. Whilst food prices are not the same in every store, and not all products are in every store, they are still clearly subsidised, if they were not there would be much bigger price differences between inner city areas and small remote villages.
Governments will obviously be wary of letting this sort of thing happen, and I think for good reason, once people found out their natural reaction would be that it is unfair, we already have some not happy with the variance in SC, and this would be a much bigger thing.
There is a good argument from the wholesale -> supplier, but I dont see the argument for the consumer pricing, unless maybe you live in one of the cheaper regions and put yourself first, in particular if you are one of the very nimby's.

Your one argument seems to be to keep nimby's happy. I havent read anything else that explains why there needs to be radically different pricing based on post code.

I've already given some examples, lower pricing for consumers, moving demand to high generation / low cost areas reducing the need for MASSIVELY expensive grid upgrades

I don't want examples of where people are forced to charge the same price by a regulator. Of course we all pay the same, jesus think for a minute.
I want examples of where no regulation doesn't force competition to not happen and reduce prices.

Suggest you watch this

 

[b0rn2sk8]

If you lived in the North of Scotland, one of the Islands off Scotland or NI, you would realise that there isn’t a universal price for deliveries.

It’s only RM who have a universal price for some of their services because they have a universal service obligation which is set out in law - a hangover from when they were publicly owned. I expect that universal service obligation will disappear in the not too distant future because it is no longer sustainable with current mail volumes.

The universal service obligation doesn’t apply to the like of DPD etc. or even Parcel Force who are a RM subsidiary.

Broadband absolutely has a post code lottery which is far worse than energy and water. Sure the price is the same but the coverage and quality of service is a complete minefield of not spots and dire speeds.

If it was left up to the private sector, most rural areas would still be on basic ADSL at 1-2mb. The only reason many eventually got FTTC (not all get this and if they do it’s often not that much better than ADSL due to distance to the green box and line quality) and now some areas are getting FTTP is because the government heavily subsidised it with tax payers money.

 

[danlightbulb]

One advantage of zonal pricing is that it actually creates a position where investment is likely to not all be in areas with high generation as they will see prices impacted if teh keep building more solar in the east and offshore along the east coast and north of Scotland.
Creating a pricing model where building that generation in other locations makes more sense than just the highest generation areas.

Watched the vid.

I'm all for building more renewables around the country not just in Scotland or the East. Absolutely we need more renewables in all regions of the country.

What's stopping them building more renewables now in the Midlands or other areas? Is it all down to Nimby's and if so do you think a few pennies off the unit rate will change their mind?

Or is it planning restrictions on solar farms, or a lack of wind in non coastal areas? If so, regional pricing won't solve those issues.

and now some areas are getting FTTP is because the government heavily subsidised it with tax payers money.

Which is the point isn't it? Leaving things to open markets and competitive forces doesn't help a lot of people. Critical things like energy, water, connectivity need government intervention to make sure they happen and are spread all around the UK. I don't think we need regional pricing for that, but good strategy and planning cooperation, and an acceptance that for the benefit of all corners of the UK there will need to be some cross subsidy going on.

I can certainly see the point of having lots of renewables generation in all regions but that shouldn't be an excuse not to also reinforce the national grid system and improve connectivity across the whole country. We should have both.

 

[Mercenary Keyboard Warrior]

Watched the vid.

I'm all for building more renewables around the country not just in Scotland or the East. Absolutely we need more renewables in all regions of the country.

What's stopping them building more renewables now in the Midlands or other areas? Is it all down to Nimby's and if so do you think a few pennies off the unit rate will change their mind?

Or is it planning restrictions on solar farms, or a lack of wind in non coastal areas? If so, regional pricing won't solve those issues.




Which is the point isn't it? Leaving things to open markets and competitive forces doesn't help a lot of people. Critical things like energy, water, connectivity need government intervention to make sure they happen and are spread all around the UK. I don't think we need regional pricing for that, but good strategy and planning cooperation, and an acceptance that for the benefit of all corners of the UK there will need to be some cross subsidy going on.

I can certainly see the point of having lots of renewables generation in all regions but that shouldn't be an excuse not to also reinforce the national grid system and improve connectivity across the whole country. We should have both.

The main issue is its simply more efficient to keep throwing them up where its most windy, ie east coast
There is some cost benefit in some areas as well, east coast like east anglia way has low water depths

Trust me there are plenty of NIMBYs round here, just like the rest of the country

East anglia has the lowest rainfall of the UK, but not sure if that correlates to lowest cloud as well in regards solar, or maybe its the generally flat landmass which is also generally fairly cheap as is mostly arable grade

 

[danlightbulb]

The main issue is its simply more efficient to keep throwing them up where its most windy, ie east coast
There is some cost benefit in some areas as well, east coast like east anglia way has low water depths

Trust me there are plenty of NIMBYs round here, just like the rest of the country

East anglia has the lowest rainfall of the UK, but not sure if that correlates to lowest cloud as well in regards solar, or maybe its the generally flat landmass which is also generally fairly cheap as is mostly arable grade

I think cost efficiency is pretty important. If it's cheaper to put a wind turbine in Scotland and bring the energy to the South East, then that's what they should do. Don't force generation infrastructure to be built where it's less cost effective, that will cost us all money.

However if only one part of the cost is being taken account of (the turbine itself but not the transmission) then I agree that's wrong. They need to be considering the whole cost of all the parts.

 

[Mercenary Keyboard Warrior]

I think cost efficiency is pretty important. If it's cheaper to put a wind turbine in Scotland and bring the energy to the South East, then that's what they should do. Don't force generation infrastructure to be built where it's less cost effective, that will cost us all money.

However if only one part of the cost is being taken account of (the turbine itself but not the transmission) then I agree that's wrong. They need to be considering the whole cost of all the parts.

Its not more cost effective, the schemes having to be built to get the energy down the east coast because the grid cannot cope are massively expensive
and those NIMBYs I mentioned, yeah they are really looking forwards to the new substations and pylons.

Which, yet again, was one of the points, try to move some energy intensive industries to areas of high generation.
Its better consumed locally, lower transmission losses, lower infrastructure costs, less disruption etc

Further Scotland to County Durham electric cable approved

The regulator Ofgem says it approved a £2bn funding package for the project.

www.bbc.co.uk

Pylon plans in rural Wales could spark social unrest, Plaid warns

A green energy company is threatening landowners with legal action as they deny access requests.

www.bbc.co.uk

Electrical 'superhighway' between Scotland and England approved

The multi-billion pound link will allow Scottish renewable energy to be sent to consumers south of the border.

www.bbc.co.uk

Ralph Fiennes adds voice to campaign against 112-mile pylons route

Ralph Fiennes argues for an offshore alternative to a 112-mile pylon plan spanning three counties.

www.bbc.co.uk

East Anglia pylons: Plan for 112-mile power line published

The network of pylons would stretch from Norwich via Bramford in Suffolk to Tilbury in Essex.

www.bbc.co.uk

 

[b0rn2sk8]

Which is the point isn't it? Leaving things to open markets and competitive forces doesn't help a lot of people. Critical things like energy, water, connectivity need government intervention to make sure they happen and are spread all around the UK. I don't think we need regional pricing for that, but good strategy and planning cooperation, and an acceptance that for the benefit of all corners of the UK there will need to be some cross subsidy going on.

No, the point is there are different kinds of post code lottery, not all of them are financial.

Electrons are electrons but not all broadband is created equally even if it is the same price.

Even with electrons, not all grid connections are equal, I’ve got 100A but many older smaller (cheaper) houses only get 60A and that puts real limits when installing your own green tech (solar, heat pump) and EV chargers. We still pay the same price none the less.

Yes some of those houses will get upgraded but only to 80A but that is still less than 100A and they may have other limits like on exports because of local grid capacity.

I can certainly see the point of having lots of renewables generation in all regions but that shouldn't be an excuse not to also reinforce the national grid system and improve connectivity across the whole country. We should have both.

No one said we wouldn’t have both, the point is you need less infrastructure if generators are closer to the point of consumption. That makes the system more resilient not less because you are less reliant on a few very large and high power transmission lines to get the power out of Scotland down to the midlands and London.

If one of those large high power transmission lines fall over and there is insufficient capacity down south, imagine the Heathrow blackout but on the scale of the entire area inside the M25.

 

[jpaul]

The newer energy intensive industries are already provisioning their own private supplies ... battery factories , kfc, data centres,
not sure how any turbine energy for them avoids being generated under the national CFD bidding process though, or costs they incur using national grid for energy delivery ?

whilst UK just can't have some industries without much cheaper/reliable domestic low-carbon electricity - aluminium/ammonia/new-steel.

 

[danlightbulb]

Its not more cost effective, the schemes having to be built to get the energy down the east coast because the grid cannot cope are massively expensive
and those NIMBYs I mentioned, yeah they are really looking forwards to the new substations and pylons.

Which, yet again, was one of the points, try to move some energy intensive industries to areas of high generation.
Its better consumed locally, lower transmission losses, lower infrastructure costs, less disruption etc

Ok so why can't the current system force generators to contribute to transmission construction if they build in remote areas? Then when faced with these increased costs they would naturally turn to other areas where the 'costs of connection' are less.

That way we force generators to build in areas we want without burdening local consumers.

Another way is tax breaks, to incentivise building in the areas we want.

Both spread the costs across society rather than a specific local area having to bear the full burden through increased prices.

 

[danlightbulb]

the point is there are different kinds of post code lottery, not all of them are financial.

Electrons are electrons but not all broadband is created equally even if it is the same price.

Even with electrons, not all grid connections are equal, I’ve got 100A but many older smaller (cheaper) houses only get 60A and that puts real limits when installing your own green tech (solar, heat pump) and EV chargers. We still pay the same price none the less.

Oh absolutely, postcode lotteries all over the place. We should be trying to make that better not worse.

The issue with capacity of electrical connection is more about lack of upgrade over time than postcode lottery though. There are 60A connections all over the country. Same as lead water supply pipes. As a country we've stopped upgrading people's supplies, stopped grant schemes for insulation, stopped social schemes for property maintenance. And the price for that is decay.

We have to remember that so much infrastructure was built in the early 1900s to 1950s. Now it's all getting on for 100 years old and needs maintaining. It's estimated that over 30% of leakage is coming from privately owned supply pipes to houses. If we really cared about stopping leakage, we'd have a socialised funding programme to replace all those old pipes.

 

[b0rn2sk8]

Oh absolutely, postcode lotteries all over the place. We should be trying to make that better not worse.

The issue with capacity of electrical connection is more about lack of upgrade over time than postcode lottery though. There are 60A connections all over the country. Same as lead water supply pipes. As a country we've stopped upgrading people's supplies, stopped grant schemes for insulation, stopped social schemes for property maintenance. And the price for that is decay.

We have to remember that so much infrastructure was built in the early 1900s to 1950s. Now it's all getting on for 100 years old and needs maintaining. It's estimated that over 30% of leakage is coming from privately owned supply pipes to houses. If we really cared about stopping leakage, we'd have a socialised funding programme to replace all those old pipes.

Or the alternative is where the owner of the private property pays for the maintenance and updates to the things they own rather than relying on others to pay it for them.

We don’t need to socialise the costs of upgrades to private property. There is one really simple way to solve the issue, you can’t sell or rent this house until it meets X standard, if you leave it empty you will be charged a daily fee of X until the work is completed or forfeit the property.

If those were the rules, you can bet your bottom dollar we wouldn’t have the worst housing in Europe. Job jobbed.

 

[b0rn2sk8]

Ok so why can't the current system force generators to contribute to transmission construction if they build in remote areas? Then when faced with these increased costs they would naturally turn to other areas where the 'costs of connection' are less.

They already do pay.

That way we force generators to build in areas we want without burdening local consumers.

Another way is tax breaks, to incentivise building in the areas we want.

Tax breaks don’t work and all they do is enable more wealth to be passed to shareholders and rarely passed on to the consumer.

There is strong evidence of this across the tax system. Ask yourself, did your restaurant food get cheaper when the government cut VAT on food during covid? Nope - the restaurant just kept the difference via a larger margin.

Both spread the costs across society rather than a specific local area having to bear the full burden through increased prices.

No one is talking about increased prices, gas will still ultimately be the biggest factor in the price you pay, but that high price will be limited to the regions that rely on it.

Most wind turbines are on CFD contracts so they only get paid the CFD amount regardless of whether they generate or not.

 

[200sols]

Its not more cost effective, the schemes having to be built to get the energy down the east coast because the grid cannot cope are massively expensive
and those NIMBYs I mentioned, yeah they are really looking forwards to the new substations and pylons.

Which, yet again, was one of the points, try to move some energy intensive industries to areas of high generation.
Its better consumed locally, lower transmission losses, lower infrastructure costs, less disruption etc

Further Scotland to County Durham electric cable approved

The regulator Ofgem says it approved a £2bn funding package for the project.

www.bbc.co.uk

Pylon plans in rural Wales could spark social unrest, Plaid warns

A green energy company is threatening landowners with legal action as they deny access requests.

www.bbc.co.uk

Electrical 'superhighway' between Scotland and England approved

The multi-billion pound link will allow Scottish renewable energy to be sent to consumers south of the border.

www.bbc.co.uk

Ralph Fiennes adds voice to campaign against 112-mile pylons route

Ralph Fiennes argues for an offshore alternative to a 112-mile pylon plan spanning three counties.

www.bbc.co.uk

East Anglia pylons: Plan for 112-mile power line published

The network of pylons would stretch from Norwich via Bramford in Suffolk to Tilbury in Essex.

www.bbc.co.uk

I'm sure those NIMBYs who dislike pylons will love a load if grey warehouses and industrial units being built next to them as well..

 

[200sols]

Ok so why can't the current system force generators to contribute to transmission construction if they build in remote areas? Then when faced with these increased costs they would naturally turn to other areas where the 'costs of connection' are less.

That way we force generators to build in areas we want without burdening local consumers.

Look up TNUoS charges..
It's already the case generators further from demand pay more and consumers far from generators pay more.

 

[The Angry Welshman]

gas below 5p on todays tracker...... leccy still bouncing around the low 20s though