Bugtownboy wrote: ↑Thu Nov 25, 2021 12:46 pm
What I don’t get is the ‘solution’ has put aside £1000 per customer to match the difference between the current price cap and reality.
Are peoples bills that big they need an additional £1K to cover the difference ?
Or, is the likely price increase next April (new price cap) likely to be an additional £1000 per customer.
Either way (in my mind they’re different), if average bills rise by £1K next year, it’s going to be a very difficult time.
I interpreted that as both covering bulb's accumulated debt and as provision against the ongoing sale of power below cost price.
A
2.0 kW/4.62 MWh pa in Ripples, 4.5 kWp W-facing pv, 9.5 kWh batt
30 solar thermal tubes, 2MWh pa in Stockport, plus Congleton and Kinlochbervie Hydros,
Most travel by bike, walking or bus/train. Veg, fruit - and Bees!
Bugtownboy wrote: ↑Thu Nov 25, 2021 12:46 pm
What I don’t get is the ‘solution’ has put aside £1000 per customer to match the difference between the current price cap and reality.
Are peoples bills that big they need an additional £1K to cover the difference ?
Or, is the likely price increase next April (new price cap) likely to be an additional £1000 per customer.
Either way (in my mind they’re different), if average bills rise by £1K next year, it’s going to be a very difficult time.
I interpreted that as both covering bulb's accumulated debt and as provision against the ongoing sale of power below cost price.
A
You're not the only ones wondering at the scale of the GOVT set aside, there is something badly wrong with the energy market.
The market for electricity operates on the wholesale side using marginal pricing. This means that with gas @ around Euro80/MWh wholesale prices tend to be north of £150/MW. The retail market by contrast has a cap on elec (& gas prices).
Just completed research on elec in Denmark (using ENTSO-E data). This compared the current marginal pricing regime with a basket approach to wholesale pricing of elec. The latter delivers price stability (much lower wholesale prices) – even when gas goes up. Retail and wholesale prices don’t get much out of synch in such an approach.
As one of my contacts noted, price instability is good if you are a trader – you like instability. If you are vertically integrated (generators & retail operation), you can shrug off the reality of out of synch markets – swings – make money on wholesale, roundabouts – lose on retail – all comes out in the wash.
Fears of no retail players is a bit unfounded: will there be so many? No. There will be a market clear out. Will this cause lots of discomfort amongst the Uk population? Of course – but the UK population (serfs?) have never counted in what passes for gov calculations and, given past voting patterns, never will. These comments apply as much to the current rabble as it does to Labour under Keith.
Where will the £1.7bn go? To the players on the wholesale market. Think of it as an early Yuletide prezzie or cherry on the top of the cake. All this is an outcome that is entirely predictable and built into neo-liberalism, it is part of the design.
I have read elsewhere that the [city] "traders" love instability because it can be milked whatever happens...
A
2.0 kW/4.62 MWh pa in Ripples, 4.5 kWp W-facing pv, 9.5 kWh batt
30 solar thermal tubes, 2MWh pa in Stockport, plus Congleton and Kinlochbervie Hydros,
Most travel by bike, walking or bus/train. Veg, fruit - and Bees!
you have to look a bit deeper than just the cap, I don't believe the cost of producing energy has risen so much in the recent past so somewhere there is a lot of money being squirreled away. As that discussion makes clear, IF the level of support earmarked for Bulb is reasonable then the whole domestic market is going to need 30 odd Bn to stay "afloat" is the GOVT going to stump up that amount??
It is the trickle up economy par excellence, Still that's what markets are for eh?
If wholesale prices are driven by gas prices does this mean that generators who's costs are unrelated to gas prices are now benefiting from high prices without any increase in costs?
Every increase in price for, eg a generator that is only operating wind, is surely pure profit. Are we about to see some very cash rich renewable generators?
CrofterMannie wrote: ↑Thu Nov 25, 2021 9:07 pm
If wholesale prices are driven by gas prices does this mean that generators who's costs are unrelated to gas prices are now benefiting from high prices without any increase in costs?
Every increase in price for, eg a generator that is only operating wind, is surely pure profit. Are we about to see some very cash rich renewable generators?
Or am I oversimplifying things?
Absolutely, when Ripple Energy launched their share offer for the community wind turbine in the middle of Covid lockdown, the rebates were forecast to be something like 3p / kWh, then once the funding was underpinned by the Welsh government, electricity prices had recovered a bit and a the rebate forecasted to be 4.5p / kWh. But now after the crazy energy prices the first years rebate is going to be of the order of 8p / kWh.
The guy who put up the last £1m must be laughing all the way to the bank but to be fair to him the prices jumped some months after he stumped up the cash. But in a conversation I recently had with Ripple, they do expect the prices to drop in the future.
But every time any of these energy prices have been forecast, the reality has been wrong in both directions. An energy trader with EDF lost a record 400 million Euros in Oct on a trade that expected gas prices to crash.
CrofterMannie wrote: ↑Thu Nov 25, 2021 9:07 pm
If wholesale prices are driven by gas prices does this mean that generators who's costs are unrelated to gas prices are now benefiting from high prices without any increase in costs?
Every increase in price for, eg a generator that is only operating wind, is surely pure profit. Are we about to see some very cash rich renewable generators?
Or am I oversimplifying things?
I think that most generators who have been subsidised will be supplying according to their CfD agreements, so their pricing will be capped.
Because nearly all the wind is operating under CfD contracts the money received over and above the CfD price (which is considerable at the moment) goes to the central fund. I expect the fund is operating in surplus at the moment, does that mean the gov is ? I have not been able to find out who owns this surplus money if any.
There is a new round of CfD bidding due in Dec but the whole scheme seems irrelevant now as the tender price will be way below the market price and could make money money by going alone ! as indeed some solar has already done.
