Emeritus Prof Christopher MayDec 12

As Dale Vince (Ecotricity) points out, all that is required to reduce energy prices (specifically electricity) in the UK is to remove the requirement from the auction system that the price is dictated by the highest bid (nearly always that made by gas).

Breaking the link with gas prices (and allowing each energy source to be supplied at its actual bid price) would immediately reduce energy prices across the country.

Moreover the Govt. has the power to do this, they just don't!

#energy
h/t FT

Show threadGeofCoxDec 12

@ChrisMayLA6

As I understand it, the reason for maintaining prices at levels required by gas generation is that at lower prices the private gas generators are not viable - so the owners won't keep them going to cover any gaps in renewable generation - so the problem is not regulation, but private for-profit ownership.

Show threadDamonHDDec 12
@GeofCox @ChrisMayLA6 in the absence of marginal system, prices get gamed in other ways and transparency of real costs is reduced.
Show threadBruno GirinDec 15
@DamonHD @GeofCox @ChrisMayLA6
So we should keep the marginal systems but is there a way to come up with a price that keeps them in but is not dictated by them?
Show threadDamonHD
@brunogirin @GeofCox @ChrisMayLA6 Aspects of the Grid Code and the capacity market are intended to hem in some of the wilder behaviour eg as seen in the Texas grid, AIUI, and zonal/nodal pricing might have been another but at the cost of liquidity. Getting the balance of regulation right is hard.
Dec 15 at 9:29amWeb
Show threadBruno GirinDec 15
@DamonHD @GeofCox @ChrisMayLA6 Oh yes, I understand it's hard. Hence why it's good to start the conversation and understand the pros and cons of each solution. Otherwise we'll revert to a good old favourite: do nothing and let the public foot the bill.
Show threadDamonHDDec 15
@brunogirin @GeofCox @ChrisMayLA6 Or in extreme cases (eg Enron, Texas winter storms) let consumers go bankrupt or even die...
Show threadBruno GirinDec 15
@DamonHD @GeofCox @ChrisMayLA6 Isn't that already happening in the UK with people having to choose between eating or heating?
Show threadDamonHDDec 15
@brunogirin @GeofCox @ChrisMayLA6 Not quite as dramatically/acutely, for example the GB grid has had about two big load-shedding events this century, kicking ~500k consumers off briefly each time, but not fatally in mid-winter, and no householder received a multi-thousand GBP bill in their wakes...