Why is EU leccy cheaper

[Ken]

I hear the words "energy security" but can this ever be with products traded on the international arena. In reality it does not matter where the energy is produced, you either pay up or go without and the energy is sold abroad.

Which leads me on to why do we do we regularly import 10-20% of our electricity and we are told overseas prices are lower than ours so so why make it here, which we could do, when you can buy it for less. What i want to know is howcome EU leccy is cheaper than UK leccy in the first place.

greenallianceblog.org.uk
What will Brexit mean for the UK’s trade in electricity with Europe?
This post is by Jonathan Bosch, research postgraduate at the Grantham Institute, Imperial College London. The internal electricity market (IEM) is one of the major achievements of the European sing…
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"A second challenge is that interconnectors may make UK suppliers uncompetitive because of their free transmission of electricity. All utilities in the UK pay transmission charges, and offshore wind projects situated far away from the national grid are disadvantaged as they need to raise large finance to build transmission lines. But imported electricity is exempted from such charges. Generation capacity built in the UK may, therefore, begin its life on an uneven playing field if the costs of transmission are higher than those of European generators. Imported electricity is also exempted from the £18/tCO2 carbon price floor that has been successful in decarbonising Britain’s electricity. "

[Joeboy]

I hear the words "energy security" but can this ever be with products traded on the international arena. In reality it does not matter where the energy is produced, you either pay up or go without and the energy is sold abroad.

Which leads me on to why do we do we regularly import 10-20% of our electricity and we are told overseas prices are lower than ours so so why make it here, which we could do, when you can buy it for less. What i want to know is howcome EU leccy is cheaper than UK leccy in the first place.

greenallianceblog.org.uk
What will Brexit mean for the UK’s trade in electricity with Europe?
This post is by Jonathan Bosch, research postgraduate at the Grantham Institute, Imperial College London. The internal electricity market (IEM) is one of the major achievements of the European sing…
greenallianceblog.org.uk greenallianceblog.org.uk

"A second challenge is that interconnectors may make UK suppliers uncompetitive because of their free transmission of electricity. All utilities in the UK pay transmission charges, and offshore wind projects situated far away from the national grid are disadvantaged as they need to raise large finance to build transmission lines. But imported electricity is exempted from such charges. Generation capacity built in the UK may, therefore, begin its life on an uneven playing field if the costs of transmission are higher than those of European generators. Imported electricity is also exempted from the £18/tCO2 carbon price floor that has been successful in decarbonising Britain’s electricity. "

Oh wow, I feel . The closer you can bring the generation to your own doorstep the better. That the uneven playing field could allow curtailment of our own wind assets while importing say for example lignite generated power is madness. SWMBO isn't going to be happy when I put panels on the cabin roof....

[Mr Gus]

To compound the issue, how would it affect the whole scenario if / when Scotland went out on its own & chose to be EU members?

Hasty southern investment & onshore WT licenses pushed through?

[nowty]

Which leads me on to why do we do we regularly import 10-20% of our electricity and we are told overseas prices are lower than ours so so why make it here, which we could do, when you can buy it for less. What i want to know is howcome EU leccy is cheaper than UK leccy in the first place.

Depends on each countries generating capacity, cost of fuel(s) and the weather, in particularly the wind, sometimes its cheaper here.

The UK was actually a net exporter of leccy last year for the first time in 44 years.
https://ukerc.ac.uk/news/britain-net-el ... -exporter/


Myth buster on Interconnectors from the National Grid here,
https://www.nationalgrid.com/stories/en ... yths-facts

[spread-tee]

Basically coz it is great for the shareholders. The UK energy market, along with many others is a rigged mish-mash of stichups to conceal the true level of profiteering which is the usual situation, though not always it has to be said.

This from a fellow who knows about this stuff (Mike Parr)

Some numbers. Gas is rumbling around Euro30/MWh (Dutch TTF). It costs roughly Euro2/MWh (or less) to extract. Henry Hub prices (USA) are roughly Euro3/MWh. Translating this into what UK serfs pay – typcially (2020) £50/MWh – now £100/MWh. Thus companies extracting gas from the North Sea have a nice little earner playing out, with margins perhaps 200% (allowing for trivial network costs). This compares with low margin renewables where you will be lucky to see 12 – 14% (I’m talking margins not dividends – although these feed through to dividends).
The point being that the fossil mafia want to keep this going and thus “own” assorted politicos such Sunak. That said “own” is perhaps and inadequate word to describe a reality in which he (and others in gov’) are 100% part of the fossil system. My guess is that Sir Kid Starver and co’ are less “owned – at the moment. But give it time and they will be massaged into position.
As I have already argued, MPs need to be changed from “representatives” into delegates – and told what they will do and what they will vote on, by their electorates. Info Tech has reached the point where it would be trivial to have regular votes on all sorts of subjects – direct democracy. This would cut the ground from under all the parties and reduce the power of the lobbyists. UK needs to try new forms of democracy, the connection between citizens and delegates needs to be strengthened.

I'm not in full agreement with that but I totally agree we have a system vastly bent to favour the well off which leaves most of us struggling.

You can see the full discussion here,

https://www.taxresearch.org.uk/Blog/202 ... constrain/

Desp


+31

[Ken]

Thanks for that Nowty. We exported last yr because of a shortage of gas and the French nuclear being drastically under capacity but now we are back to the usual importing (5Gw as i write)

The other ref in "Myth 2" says "Interconnectors actually give the UK access to cheaper electricity from abroad" but WHY is it cheaper.

I have heard all of this for years now but without explanation why. I suspect it is something the Gov does not want the public to know.

[nowty]

Thanks for that Nowty. We exported last yr because of a shortage of gas and the French nuclear being drastically under capacity but now we are back to the usual importing (5Gw as i write)

The other ref in "Myth 2" says "Interconnectors actually give the UK access to cheaper electricity from abroad" but WHY is it cheaper.

I have heard all of this for years now but without explanation why. I suspect it is something the Gov does not want the public to know.

Same answer,
Depends on each countries generating capacity, cost of fuel(s) and the weather, in particularly the wind, sometimes its cheaper here.

For example, at the moment, France and Belgium have high nuclear capacity and its summer, so overcapacity. Norway has overcapacity in Hydro. Netherlands has high wind power for its population size and its currently windy there.

The UK is still heavily dependant on gas and at this moment we are burning circa 10GW of gas in our power stations to generate 6GW. if we did not import the current 6GW on the interconnectors from these countries with their lo carbon excess capacity, we would have to burn 20GW of gas to make the shortfall up.

[Ken]

Same answer,
Depends on each countries generating capacity, cost of fuel(s) and the weather, in particularly the wind, sometimes its cheaper here.

For example, at the moment, France and Belgium have high nuclear capacity and its summer, so overcapacity. Norway has overcapacity in Hydro. Netherlands has high wind power for its population size and its currently windy there.

The UK is still heavily dependant on gas and at this moment we are burning circa 10GW of gas in our power stations to generate 6GW. if we did not import the current 6GW on the interconnectors from these countries with lo carbon excess capacity, we would have to burn 20GW of gas to make the shortfall up.
[/quote

Yes i get all of that but if we were producing leccy at the same price as EU you would expect over the long term to be close to net zero export/import but we are permantly a net importer and only export any when we have huge surplus of wind.

Over the yrs i have read many Nat Grid reports and they all say without exception that we do/will import EU leccy because it is cheaper.

"Depends on each countries generating capacity, cost of fuel(s) and the weather, in particularly the wind, sometimes its cheaper here." That is a given with any commodity. I think it is far to simple to write it off in that way without explanation. Regardless of those facts they could not export to us unless it was cheaper. Yes they might have more capacity as we do sitting idle, etc but at the end of the day why is it cheaper? I think i will attempt to answer my own question and it is that we are wedded to this merit order bidding where gas production, which is most expensive, is dictating the price to the low cost suppliers wind,solar ,nuclear. Perhaps the EU does not have merit order bidding particularly if your nationalised

I am also sure that transmission of leccy in the EU is free and its cost is born by national taxation.

[dan_b]

Might it be something to do with the privatisation and fragmentation of the UK Electricity generation, transmission, and consumer supply system - every layer there's a profit take for the shareholders, and there are a LOT of layers? Also lack of joined-up-ness in the overall system has meant that over time, investments haven't been put in the right places at the right times, so system is congested/less efficient?

Just a thought. Could be wrong.

[Swwils]

EU electricity can be cheaper due to differences in regulation, transmission charges, energy mix, and market size, but UK energy production is crucial for resilience, control over energy supply, and meeting environmental goals; examining France and Germany shows how nuclear power can effectively achieve low electricity prices and emissions.