Re: energy in UK

On 15/04/2025 23:27, Don Y wrote:

On 4/15/2025 1:04 PM, Martin Brown wrote:

What's "sky high"?  And, are residential and commercial/industrial
rates significantly different?

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Yes and in complicated ways. Residential tariffs are capped, ordinary businesses are not but a handful of ultimate heavy use load balancing centres get preferential rates on condition that they can get no electricity at all. Think aluminium and fertiliser plants and choralkali electrolysis. (I think the last aluminium plant in England has now shut)

 Is the "cap" significantly higher than the "normal" rate?  Or, is it,
effectively, the "normal rate"?

The cap limits ordinary home users exposure to extreme market volatility. It became necessary after the invasion of Ukraine when gas prices spikes very high making it impossible for some elderly folk to heat their homes. Their choice was quite literally heating or eating.
Even a Tory government isn't quite that callous.

Increasingly the winter peak load in the UK is balanced by paying big heavy industrial users to shut down or go to a standby condition! There are even schemes to reward home users not to use power at peak times.

 We have had time-of-use (ToU) tariffs, here, for decades.  (I designed a ToU KWHr meter more than 35 years ago)  But, they are usually ridiculously
structured.  E.g., it would only make sense for *me* if we could live
entirely without refrigerative cooling (ain't gonna happen for 9 months
out of the year) as the cost of using electricity during peak hours exceeds
by many multiples the cost of non-ToU rates.

Time of use tariffs are still uncommon in the UK. It is possible with a smart meter (which I now have) but supplier offers are pretty poor. Previously I had a counter rotating dials mechanism dating from the 1950's (which had clocked - overflowing the counter back to all zeros).

There are also "demand" tariffs where the cost of the energy is proportional
to the *peak* rate of YOUR consumption.  So, it pays to be able to do local
load-leveling as any power used at less than your peak rate of consumption
is over-priced.  This is primarily used by businesses and leads to investments
in load-shifting technologies (e.g., making ice, overnite, to ease the
cooling load the next *day* -- as well as allowing the refrigeration units
to be downsized a bit).

It is possible to have local domestic battery storage and exploit the overnight low rates - though to get the best deals you need to own an electric car (or at least convince your electricity supplier you do).
My supplier has just offered me half price electricity at the weekends. Only snag is their website won't allow me to accept their generous offer - it keeps saying "something went wrong- try again later".

 There are also cases where the utility is (at your consent) given control
over some of your larger loads (think: central air conditioning) so that
it can manage its total load as well as micromanaging the loads on individual
parts of the distribution network.

Aircon isn't really a thing in domestic UK buildings. The number of days a year when it would be needed can be counted on the fingers of one hand. My house manages it with Victoria technology - very thick walls and windows to open at night. Centres of major cities do get rather warm due to office buildings with air conditioning pumping out heat!

And, of course, rates for folks who do cogeneration.  (amusingly, if you
are a cogenerator, you are automatically put on a ToU schedule.  So,
taking your cogeneration capability offline for maintenance means
you pay through the nose for power that your neighbors would get at a
fraction of that cost)

Having solar panels is another way to get onto a ToU tariff. Even that is gamed though. Much domestic PV electricity ends up heating domestic water as the feed in tariffs are also based on crazy sums. There is an aftermarket in diverters to exploit this loophole.
There are incentives to install solar PV but none for solar hot water.

Typical electricity prices in the UK are tightly coupled to the spot price of natural gas in a totally crazy pricing structure. Electricity in the UK is 2x the price on mainland Europe and 4x that in the US.

 We have a surcharge for power generation via "quick response" technologies
(like gas fired plants).  We also pay for the cost of transmission (a
technique that allows the utility to avoid reimbursing cogenerators for
power at the same rate that they would charge to supply it!)
 Plus taxes, fees, etc.  And, of course, voluntary donations to subsidize folks
who can't pay their bills...  <rolls eyes>

We have a standing charge which covers distribution and all the bankruptcies of box shifter companies that got into selling electricity to consumers without having the first clue about what they were doing.
A large number went pop after the Ukraine war started because they had committed to selling at fixed price to end users at a price below the new wholesale prices.

 

It was sort of OK until the war in Ukraine started and Russian gas was plentiful in Europe. We were pretty much screwed from that point because we had almost no long term gas storage capacity with Rough closed down (it was deliberately taken offline to save on maintenance costs).

 Good to have politicians who are looking out for your interests in this
regard -- not!
 

https://warwick.ac.uk/newsandevents/knowledgecentre/business/business/gas_price_spike/
>
The price paid for wholesale electricity in the UK is determined by the cost of generating the most expensive component needed to match demand (so that they can make a profit). This is typically a fast response gas turbine and all suppliers get paid in proportion to that high price.
>
https://www.taxresearch.org.uk/Blog/2025/02/25/its-time-to-change-uk-energy-pricing/

 I *think*, here, it depends on the actual cost.  E.g., places with hydropower
likely pay a lower overall rate vs. places totally reliant on burning fossil
carbon.
 The utility has been complaining that they have "too much" residential
solar capacity (the utility has a say in whether or not YOU can use solar
and how large your installation can be)

UK allows up to 4kW solar generation on any domestic premises. More than that and you have to apply for a license. It confused the load shedding algorithms last time there was a serious power outage since it was about 6pm in mid summer and so when they shed a nominal 1GW of load they also dropped off about 100MW of small solar PV systems. It was enough to lose control of the frequency again and a cascade failure ensued.

The whole thing is rigged by Ofgem (the energy regulator) for the benefit of the electricity producers and against their customers.

 Well, when was a service ever designed for the (strict) *benefit* of its
consumers?  SWMBO's folks were part of a co-operative for power generation
so she periodically receives *checks* from them.

Offgem's remit is supposed to protect consumers from exploitation but in fact it facilitates it. Also it failed to prevent clueless box shifter types from going into retail sale of electricity to consumers.
The standing charge per day (for being grid connected) has gone up enormously as a result to sort out the mess this caused.

 

At night the spot price for electricity can spike negative so that UK battery farms like to put insanely big substations onto their batteries to game the system (and so get paid handsomely for accepting power). This does nothing for network stability.
>

The UK has an insane imbalance between production of power in the North and consumption of power in London and the South East. The main cables running N-S are routinely overloaded during daytime during winter.

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Why is NEW generation not brought on-line closer to the demand?

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Engineers have been warning about the problem for about 3 decades.
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https://www.theengineer.co.uk/content/in-depth/generation-gap/

 Deaf politicians?  Or, consumers unwilling to bear the short-term pain
of bringing that on-line?  (i.e., hoping the shit hits the fan sometime
down the road)

Deaf and blind politicians determined to prevaricate and apply the odd sticking plaster now and then to avoid making serious investments that won't show any return inside their likely tenure in office.

 

Is this a NiMBY issue?  Or, a consequence of real-estate valuations?

>
Partly a factor is that land prices are much lower in the north but also it is a lot more windy. A Nimby in the south is worth 10 in the north.

 That suggests you are using wind-power, there?

Indeed. There is a lot of wind power in Scotland and the North Sea. It makes up about 40% of UK generation on a good day. The big weakness is that historically and today most power is made up north and used down south. The wires connecting the two are insufficient to cope.
You can see the grid supply in realtime here:
https://www.gridwatch.templar.co.uk
Frequency is rather low this morning at 49.86Hz. Wind power is at 40% and solar at 16% of total demand 34GW. Importing 9% from France.
We also have a ridiculous amount of solar PV for such a high latitude. This is governed by the fact that in a good year a farmer can make around £200/acre by actively growing crops and £2k/acre by stuffing their land full of solar panels. Many are choosing the latter.

One option is to install large BESS systems near to the windfarms and also near the major city loads. That way power can be moved overnight to where it will be needed in the daytime. Only snag is that it is way more profitable to build them in the north where land is so much cheaper.

 In relative terms, is the real estate THAT much of a portion of the cost?
I would think it would fall out of the equation rather quickly.

The developers are spivs and speculators in it for the immediate short term profit of getting a fixed success fee for obtaining planning permission. The cost of the land comes off their bottom line.

UK national infrastructure has been privatised and robbed blind by vulture capitalists since the 1980's. It isn't just electricity that is problematic London's water supply was in dire danger of going bust too.
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https://www.bbc.co.uk/news/business-66051555
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It is ultimately all about very clever financial engineering to load the balance sheet with debt and pay handsome dividends to foreign owners.
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Penny wise and pound foolish for the the UK.

 It seems like a change to the tax code could quickly change their fortunes?

Not really - a lot of them have been sold off to foreign companies.
Successive UK governments have been particularly good at selling off the family silver to make ends meet.
--
Martin Brown