Sounds to me like a way of using up vast profits.

Sorting out old paperwork came across an electricity bill from 20 years ago and we were paying 7p kwh. Based on inflation should now be 14p not 29p.
I am manging to keep cost down having solar and battery and an EV now. I charged the car up last night added 200 miles for ÂŁ3. The petrol car we exchanged would have cost ÂŁ30 for that 200 miles. When not charging car I can charge the solar battery so replacing 29 p with 7p not counting efficiency losses.
My October bill was ÂŁ4 for the electricity some months if been good for solar Octopus pays me. The fly in the ointment is the ÂŁ240 per year as standing charge hence my annoyance at the visitors this week. Not sure when I break even on the investment in the renewables, but more price goes up the shorter it gets.

Posted By: fostertom

Posted By: Dominic CooneyI still can’t come to terms with the price of electricity being linked to gas

Absolutely. I know I ought to 'do my research' and understand for myself - but could some bright person explain it?

I don't claim to be bright - but from the internet
Quote
The cost of electricity tracks the cost of gas because gas generation sets the marginal wholesale price. The wholesale price of electricity is set by the cost of producing the last unit of electricity needed to meet demand. This is nearly always a gas power plant with high marginal costs.
End quote

There has been talk of decoupling but I guess too much other stuff to deal with and no real incentive to do anything.

I suppose you should be grateful that nuclear is not the benchmark price.

" The wholesale price of electricity is set by the cost of producing the last unit of electricity needed to meet demand."

That sounds absolutely bonkers. The price of all electricity sold is set at the cost of producing the final expensive marginal unit, which of course has to be using gas because all the electricity has already been used producing the 99.9% of non-marginal electricity?

Where is the incentive to minimise costs if they automatically get the full price anyway?
Having got their licence to print money they might as well stuff it all in the boilers!

Posted By: Cliff PopeWhere is the incentive to minimise costs if they automatically get the full price anyway?

Because anything they spend on costs comes out of their lovely profits! And if anybody makes huge profits, somebody else will probably start a lookalike firm to compete against other higher cost generators.

The standing charge is artificially high to in order to recompense the suppliers that took on customers from the collapsed suppliers, to ensure those customers didn’t lose money ( the moral hazard that creates is plain daft) and to reimburse the suppliers for the energy supplied but never paid for and to cover the costs of the social tariffs.

Basically lots of additional spending that should really be direct from government, but that would mean higher tax rates and its much more convenient to hide it in the standing charge.

Similarly the unit rates are higher than they need to be to cover the various eco schemes. Insulation , new heating systems etc etc.

Just hidden state spending

If it was all variable tariff then those with optional demand would / could defer to cheaper times (as some already do) and those with out the option to defer will have to pay the cost but will get cheaper power at other times (along with everyone else). This would decrease the need for expensive generation and I would expect for many would be the normal way of doing things and for those who don't care (or can't rearrange consumption) will pay the price.
Whilst expensive (fossil) generation will be needed much could be done to reduce it and down the line I expect storage options to start to play a much bigger part.
The system needs changing but I don't see the drivers to do that coming any time soon.

Posted By: djhIIRC the pricing is set every half-hour so everybody already benefits from cheaper prices at all times except peak

But only those who bother to take account of the cheaper times. A bigger differential would be a better driver

Posted By: djhYou still need enough generator capacity to cope with peak demand which again IIRC is half-time in major football games when everybody switches the kettle on.

Which is where batteries or Pumped storage hydropower or some other instant demand storage steps up to the plate. Would (or when will) a bunch of batteries be cheaper than a replacement power station for one that is at end of its life?

Posted By: djhYou can't easily shift that demand, and thus can't much easily reduce generation. Especially as more people get electric cars............

Now theres one load that could be shifted. Getting home from work and plugging in the car IMO should be unaffordable.

The only way to have smooth coordinated planning is to have a monopoly supplier or two, the state being best placed to do so but as history and HS2 currently shows the state is hopeless at such things, it pays too much initially then politicians will want to divert money away from maintenance and repair slowly running it into the ground whilst staffing it with hugely expensive employees on pensions mere mortals can only dream of.

As it is , in pursuit of met zero, we’ve had to offer high prices to encourage the investment, the costs of grid improvement and upgrades for such widely distributed generation is lost in the calculations but will add to the final end price to the consumer as will be the extortionate costs of storage.The wants and expectations of the average consumer are forgotten by “enthusiasts of net zero at any cost” and as such the eventual solutions won’t really work for anyone.

The UK seems intent on paupering itself in a bid to be a net zero poster boy, but unlike Iceland ( tiny population and effectively limitless geothermal energy) or Norway ( again tiny population and huge sovereign wealth fund along with geography well suited to hydro) we have a large energy hungry population ( largely as a result of old housing stock designed and built in times of cheap plentiful power ) our energy reserves are the coal we sit but can’t now use, we’re not ideally suited for solar ( covering great swathes of high quality farmland with solar panels or biofuel crops hardly seems sensible) and given our population density wind needs huge amounts of capacity. The notion of cheap renewable electricity is wonderful but falls at the hurdles of distribution and storage. Gas is again pretty cheap and eventually ( when russian gas comes back to the market which it will) be cheaper still, it’s no coincidence that the pr campaigns for ASHP have gone quiet as you’d now need nigh on 5:1 efficiency to make it economically viable.
The suggestion above that charging your car when you get home from work should be unaffordable is a prime example of what a work from home civil servant would come up with , (as they have no idea of the average persons life.) to solve problems the countries energy policies are creating.
In a report last year it was estimated that the cost to the UK economy from excess weight and obesity is 98 billion a year ( or 3% of gdp) , if that figure is valid, convincing just half those so afflicted that keeping the fridge door shut is a good idea would save 49billion a year , enough for around 150,000 new social homes a year, or be able to spend 50k on upgrading a million older homes a year, or solve nhs and social care , take your pick. But the fat vote effectively controls the nation as no party wanting to tackle the problem would get votes ( unless you paid people to lose weight at some absurd marginal £/kilo rate) Sounds daft ,but who would have imagined HS2’s bat tunnel stories ( which you have to fervently hope aren’t completely factual on the cost front) and the conservation message that seems totally out of sorts with the way concerns over turbines and bird strikes etc are dealt with.

Worlds gone bonkers.

And likewise coal reserves - UK coal peaked in 1958 and declined every year after that, it was pretty much finished by the time I grew up in a mining town in the 80s. That was long before we'd heard of net zero, it actually stopped because we'd already used it all up. I later lived in an oil/gas town and they're looking the same now.

The world has completely changed. Nostalgia is a powerful political force, but politicians who tell you that we could somehow jump back to times when UK had cheap secure gas or coal, are not being straight with you.

The new reality is that the UK is one of the most consistently windy and rainy places on Earth, with longer daylight hours in Summer than the Sahara. We are well placed to have the cheapest energy in Europe and sell it to everyone else, and the build-out of that industry is progressing faster than anywhere else except China and the US. Don't seem to be any votes in saying that, though.

Posted By: Artiglio...............will want to divert money away from maintenance and repair slowly running it into the ground whilst staffing it with hugely expensive employees on pensions mere mortals can only dream of.

Hmm.... Sounds bit like the upper management of some water companies

Today a couple of guys came this AM to check that the signs had been fixed properly. From several hundreds already done very few were at the correct height. The spec is 3m to center of sign so practically all will need redoing. When I queried why such precision it was so that when you look down a line of poles they are all visually in the same line. My goodness!! Apparently the training the sign putter uppers had was not good enough. The staff have been recruited from from Zambia and South Africa some 500 of them with more being recruited. So 2 to a vehicle, that is 250 new Isuzu pick up trucks with fitted cherry pickers. The auditors said I could have insisted that they did not go into my wet fields with the truck. There's where our standing charge goes what inefficiency.

Posted By: djhwith what tolerance?http:///newforum/extensions/Vanillacons/smilies/standard/devil.gif" alt="" title="" >

Don't know did not ask but they went into the field with a telescopic measuring stick. Having worked in a right 1st time mentality in manufacturing, no customers today no job tomorrow environment I just despair at the wasting of our money. Successive governments have destroyed SME's our wealth creators whilst the public sector threaten strike action if can't work from home. It is the wealth creators that pay their salaries there is not enough of them, so that is why we cannot pay for the services we expect. So Rachael robs Peter to pay Paul and puts the brakes on industry and business.

To be fair, those numbers in the FT were taken from the time a couple of years ago when world gas prices were very high because of Putin, and the ÂŁ was very weak against the $ because of Truss's budget disaster. UK electricity prices were linked to imported gas and it is priced in $.

Fortunately, all those factors have improved now. Although the geo politics seem pretty dicey, if there's a war in the ME or tariffs imposed from the US then it could go bad again pretty fast.

There do seem to be efforts to wean the UK off of imported gas for electricity by 2030, should see that in lower prices. Free electricity again last night on Agile because there was plenty of wind :-)

I was reading today that labour politicians apparently agree with Dominic Cummings - that the civil service is incompetent. Much the same mentality in various industries that used to be nationalised, methinks.

I suspect the electricty whatever-organisation-it-is isn't worried about whether people climb their poles and electrocute themselves. They simply want to be able to defend themselves against a charge of negligence if they do. "These chaps left a pole sitting there; it's an open invitation to climb it, m'lud".