Energy Bills

[Gutter Boy]

So the nation pays the top price for energy despite what it costs. Seems like a deeply flawed setup. Gas which has peeked sets the price for all forms of electricity now. Whether renewable etc we pay the gas price for it. That needs changing pronto.

A better solution should be the state top-up being converted into shares, rather than future debts.

Agree about the disconnection of gas from electricity.

 

[Rorschach]

For advancing the war, but will there come a time when putin will just dig in and hold what he has?
Will be very difficult for Ukraine to move him, and it doesn't do anything on energy problems.

From reports I am reading they are trying to dig in now to little effect. The signs are that the tide has certainly turned against them, and that Russia is calling for talks now is an attempt to freeze the conflict and consolidate their gains. It is a tell of their weakness, and Ukraine will reject talks at this juncture. Ukraine is advancing in Kherson and Kharkiv, and Russia has also weakened itself in Donbas in an attempted to compensate these other areas. This war will end with Ukraine winning and that will mean Putin being deposed, but it will not mean that much for energy prices this winter. Putin has also played one of his last major cards in shutting down NS1 and the market has spiked and has started dropping on the back of that already. That is now priced in. He could fudge around with some of the other commodities that come out of Russia but he has shot his load early with his energy leverage.

For Europe, it is a case of riding out the pain of this year and ongoing changes in the supply and infrastructure will make Russian energy close to irrelevant this time next year. It is up to the government to ease this pain in the short term. EU are talking windfall taxes which I think is correct. Truss's plan looks like the wrong approach to me for a number of reasons.

 

[Gilzeantoscore]

Don't you just love market forces?

 

[scaramanga]

So the nation pays the top price for energy despite what it costs. Seems like a deeply flawed setup. Gas which has peeked sets the price for all forms of electricity now. Whether renewable etc we pay the gas price for it. That needs changing pronto.

It is changing, I believe, with new contracts.

The problem we have is that many of these contracts are already in place and are not expiring any time soon.

Nobody thought encouraging green energy by offering contracts pegged to gas prices was bad at the time - it's just the cost of trying to force a policy like that.

 

[scaramanga]

From reports I am reading they are trying to dig in now to little effect. The signs are that the tide has certainly turned against them, and that Russia is calling for talks now is an attempt to freeze the conflict and consolidate their gains. It is a tell of their weakness, and Ukraine will reject talks at this juncture. Ukraine is advancing in Kherson and Kharkiv, and Russia has also weakened itself in Donbas in an attempted to compensate these other areas. This war will end with Ukraine winning and that will mean Putin being deposed, but it will not mean that much for energy prices this winter. Putin has also played one of his last major cards in shutting down NS1 and the market has spiked and has started dropping on the back of that already. That is now priced in. He could fudge around with some of the other commodities that come out of Russia but he has shot his load early with his energy leverage.

For Europe, it is a case of riding out the pain of this year and ongoing changes in the supply and infrastructure will make Russian energy close to irrelevant this time next year. It is up to the government to ease this pain in the short term. EU are talking windfall taxes which I think is correct. Truss's plan looks like the wrong approach to me for a number of reasons.

Windfall taxes will probably work if everyone is doing it. We can't really do that until or unless everyone else is committed.

Otherwise, levying windfall taxes on an industry we desperately need to invest heavily in the UK would be a mistake.

 

[Crab.C.Nesbitt]

Windfall taxes will probably work if everyone is doing it. We can't really do that until or unless everyone else is committed.

Otherwise, levying windfall taxes on an industry we desperately need to invest heavily in the UK would be a mistake.

This is the major problem with what would be the morally right approach to funding the proposed energy cap.

However what guarantees are there that we will get the level of investment required if we don’t apply an additional windfall tax?

My understanding is that British Gas, shell, etc are already well behind their investment targets regardless of any discussions around windfall tax.

So if the reason for not applying windfall taxes is so that they will invest, and they are not investing, why not just windfall tax the clams?

 

[Rorschach]

Windfall taxes will probably work if everyone is doing it. We can't really do that until or unless everyone else is committed.

Otherwise, levying windfall taxes on an industry we desperately need to invest heavily in the UK would be a mistake.

I agree the UK should work with the EU on a consolidated approach. The energy industry needs investment in renewables, not fossil fuel infrastructure, so if they choose to spend their money there then maybe there could be an accommodation made. What we are seeing now is marginal pricing causing market distortions and that has to be something your capitalist heart abhors.

 

[SpurMeUp]

This is the major problem with what would be the morally right approach to funding the proposed energy cap.

However what guarantees are there that we will get the level of investment required if we don’t apply an additional windfall tax?

My understanding is that British Gas, shell, etc are already well behind their investment targets regardless of any discussions around windfall tax.

So if the reason for not applying windfall taxes is so that they will invest, and they are not investing, why not just windfall tax the clams?

I think its a bit more nuanced. Some offshore wind contracts for example have a set price - far below what the 'market' price is now. Others are pegged at the gas price which means they are raking it in. Selling energy far above what they would normally charge. Its not a free market at all.

You'd hope the silver lining might be more renewables coming on stream fast. But it probably takes a long time to build a wind farm etc. I'd be more interested in the UK government using the £100b to buy a Chinese solar production company, and supply UK businesses with cost price solar etc. Would have been better than buying the speculative low orbit satellite company.

 

[scaramanga]

I think its a bit more nuanced. Some offshore wind contracts for example have a set price - far below what the 'market' price is now. Others are pegged at the gas price which means they are raking it in. Selling energy far above what they would normally charge. Its not a free market at all.

You'd hope the silver lining might be more renewables coming on stream fast. But it probably takes a long time to build a wind farm etc. I'd be more interested in the UK government using the £100b to buy a Chinese solar production company, and supply UK businesses with cost price solar etc. Would have been better than buying the speculative low orbit satellite company.

Different contracts sold at different times will obviously be on different terms.

It's not a free market and that's because our govt pushed so hard towards green energy. It's the cost of running before we can walk.

Everyone thought it was a good idea at the time because nobody thought there was any likelihood of the gas we need until renewables are ready becoming so scarce.

 

[scaramanga]

I agree the UK should work with the EU on a consolidated approach. The energy industry needs investment in renewables, not fossil fuel infrastructure, so if they choose to spend their money there then maybe there could be an accommodation made. What we are seeing now is marginal pricing causing market distortions and that has to be something your capitalist heart abhors.

I have no issue with how market rates are setting prices right now.

My concern is the increased cost of green energy due to govt intervention and the lack of gas supply for the same reason.

 

[scaramanga]

This is the major problem with what would be the morally right approach to funding the proposed energy cap.

However what guarantees are there that we will get the level of investment required if we don’t apply an additional windfall tax?

My understanding is that British Gas, shell, etc are already well behind their investment targets regardless of any discussions around windfall tax.

So if the reason for not applying windfall taxes is so that they will invest, and they are not investing, why not just windfall tax the clams?

I'm sure they are well behind investment targets. No new licenses have been awarded for North Sea exploration in a long time and fracking has been stopped.

Short sightedness from all political parties has caused this as they all chase votes on green issues.

 

[SpurMeUp]

If there was some Chinese-style army-led determination to get new wind farms up and running in 3 months, we could do it, couldn't we? Would make the nation proud and be useful. Just a lack of leadership and determination. Okay, it'd be only one small thing, and we need a lot more. But it would be a start. You could also bulk buy solar and negotiate an amazing rate for £1 billion of solar pannels over 1 year, and provide cost price solar to homes and factories. But politicians lack any spirit or imagination.

 

[scaramanga]

If there was some Chinese-style army-led determination to get new wind farms up and running in 3 months, we could do it, couldn't we? Would make the nation proud and be useful. Just a lack of leadership and determination. Okay, it'd be only one small thing, and we need a lot more. But it would be a start. You could also bulk buy solar and negotiate an amazing rate for £1 billion of solar pannels over 1 year, and provide cost price solar to homes and factories. But politicians lack any spirit or imagination.

New wind farms won't help without a better method for storing and releasing electricity on an industrial scale.

Solar panels aren't the answer for domestic use. Most domestic electricity usage is at night, solar panels aren't great at producing electricity in the dark. Again, storage is the problem. The grid can barely cope as it is, so we won't be able to feed in from all the domestic panels and without massive batteries in every home, those solar panels don't do much.

 

[Rorschach]

New wind farms won't help without a better method for storing and releasing electricity on an industrial scale.

Solar panels aren't the answer for domestic use. Most domestic electricity usage is at night, solar panels aren't great at producing electricity in the dark. Again, storage is the problem. The grid can barely cope as it is, so we won't be able to feed in from all the domestic panels and without massive batteries in every home, those solar panels don't do much.

That is old thinking. 60-90% of all power generated domestically is used. Add a battery (cost about 1k) and you definitely getting the higher numbers. Anything spare and you get paid for it anyway in most places. So the ROI used to be quoted at about 6 years for an average system, but dropping prices for the systems and increasing prices for the grid power obviously has changed that number needless to say. I've read ROI of 3 years now until everything is gravy but there are a lot of variables at play. This also of course helps out the barely coping grid you mention, as will new wind farms.

 

[SpurMeUp]

New wind farms won't help without a better method for storing and releasing electricity on an industrial scale.

Solar panels aren't the answer for domestic use. Most domestic electricity usage is at night, solar panels aren't great at producing electricity in the dark. Again, storage is the problem. The grid can barely cope as it is, so we won't be able to feed in from all the domestic panels and without massive batteries in every home, those solar panels don't do much.

Wind doesn't blow in the night? Can situate wind turbines almost anywhere, over a footprint far greater than the UK land mass. Solar can be right on top of the place of use. So all factories and businesses with suitable roofs should have them by law, with government providing the means if necessary. Factories work predominantly in the daytime, and as @Rorschach outlined local onsite storage is very much viable now.

We just need blue sky thinking. Instead we get same old. Pop some pannels on your factory. Must make sense now.

 

[scaramanga]

That is old thinking. 60-90% of all power generated domestically is used. Add a battery (cost about 1k) and you definitely getting the higher numbers. Anything spare and you get paid for it anyway in most places. So the ROI used to be quoted at about 6 years for an average system, but dropping prices for the systems and increasing prices for the grid power obviously has changed that number needless to say. I've read ROI of 3 years now until everything is gravy but there are a lot of variables at play. This also of course helps out the barely coping grid you mention, as will new wind farms.

Not sure where you live, but near me the grid can't take any more feed in power.

We're in the process of covering the roof of one of our factories in solar panels and we've had to guarantee that any excess is released as heat - there's no capacity for us to feed in to the grid. It's not just that we don't get any feed in tariff, they don't even want the electricity. A quick Google earth search shows me that there are three buildings (all much smaller than ours) that have solar panels fitted in the vicinity.

Recently there was an article in the UK pointing out that the problem nobody is mentioning (because nobody has the answer) is that our creaking distribution grid will almost entirely need replacing (and capacity increasing a few times over) in order to keep a significant number of EVs moving on our roads.

 

[scaramanga]

Wind doesn't blow in the night? Can situate wind turbines almost anywhere, over a footprint far greater than the UK land mass. Solar can be right on top of the place of use. So all factories and businesses with suitable roofs should have them by law, with government providing the means if necessary. Factories work predominantly in the daytime, and as @Rorschach outlined local onsite storage is very much viable now.

We just need blue sky thinking. Instead we get same old. Pop some pannels on your factory. Must make sense now.

Wind blows at night, but only when it's blowing. Storage is still an issue.

As I mentioned in the post above, we're installing solar panels on our Portsmouth factory roof. We have three large, South-facing, pitched roof areas to install on - it couldn't be more perfect. Yet this winter, we'll produce the square root of fudge all of our energy demand.

We could install batteries. If we spent 6 figures on them and filled our entire yard, we could store enough for 37 minutes of production.

 

[SpurMeUp]

Wind blows at night, but only when it's blowing. Storage is still an issue.

As I mentioned in the post above, we're installing solar panels on our Portsmouth factory roof. We have three large, South-facing, pitched roof areas to install on - it couldn't be more perfect. Yet this winter, we'll produce the square root of fudge all of our energy demand.

We could install batteries. If we spent 6 figures on them and filled our entire yard, we could store enough for 37 minutes of production.

Would be nice if the government was able to provide solar and battery storage to you at cost pricing, using a few billion for bulk buying kit to reduce cost. Unfortunately, everything from the government is reactionary, short-term and costly. Rather than be proactive, they are reactive, and they don't use our money well to react either. £120b of debt and interest to pay energy firms, yet no investments into longer-lasting solutions.

 

[Rorschach]

Not sure where you live, but near me the grid can't take any more feed in power.

We're in the process of covering the roof of one of our factories in solar panels and we've had to guarantee that any excess is released as heat - there's no capacity for us to feed in to the grid. It's not just that we don't get any feed in tariff, they don't even want the electricity. A quick Google earth search shows me that there are three buildings (all much smaller than ours) that have solar panels fitted in the vicinity.

Recently there was an article in the UK pointing out that the problem nobody is mentioning (because nobody has the answer) is that our creaking distribution grid will almost entirely need replacing (and capacity increasing a few times over) in order to keep a significant number of EVs moving on our roads.

I've never heard of anything like that before but it sounds fixable to me. Talk to your local Tory MP and they'll have it sorted in no time. For a small fee.

Also you were talking about how 'Solar panels aren't the answer for domestic use". Now you are talking commercial use. You are moving the goal posts.

 

[P.D.]

So the nation pays the top price for energy despite what it costs. Seems like a deeply flawed setup. Gas which has peeked sets the price for all forms of electricity now. Whether renewable etc we pay the gas price for it. That needs changing pronto.

This is completely dumb, they need to sort this out pronto. Also they should up the windfall text, seems silly to pay massive costs for energy and load it all on tax payer. Even if it wasn't too high and raised 20-30bn it would reduce the debt a lot. Should also freeze it based on usage - everyone gets a set amount and you pay market rate above it to help incentivize people to lower their usage.

Also it's pointless drilling more in the North Sea or fracking, will take years and would just be sold at market rates anyway.

All of this sounds obvious but then it is Truss we're talking about here.