rwmjBritain today generating 90%+ of electricity from renewables
> Britain paying highest electricity prices in the world for second year running
> Ed Miliband’s net zero targets are facing fresh scrutiny after Britain was found to be paying the highest electricity prices in the developed world.
> New data published on Tuesday showed the price paid by UK industry for power was 63pc higher than in France and 27pc higher than in Germany.
> Britain is also the second-most expensive country in the world for household electricity, with billpayers paying twice as much as those in the US.
https://www.yahoo.com/news/articles/britain-paying-highest-e...
Yes. But these things can be orthogonal. Or actually brcause gas is expensive.
https://www.bbc.com/news/articles/crkep1vx3mro
The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity.
Once built, the cost of generating power from renewables is very low, so these typically come in with the cheapest bid. Nuclear might come next.
Gas generators often have the highest costs, because they have to buy gas to burn, as well as paying a "carbon price" - a charge for emissions.
The wholesale cost is set by the last unit of electricity needed to meet demand from consumers. This means that even if gas only generates 1% of power at a given time, gas will still set the wholesale price.
> Or actually brcause gas is expensive.
Gas in the UK is expensive because the Tories spent decades selling off the storage so developers could turn them into real estate. This continued well into the 2000's when, for example the lettuce (Truss) closed the Rough storage facility in 2017.
Gas in the UK is expensive because of 1980's privitisation. Another one of the Tory's great ideas. The UK privitisation model is designed to generate profit. Norway made a different choice. Equinor is majority state-owned, and Norwegian extraction operates within a framework designed to capture resource rents for public benefit. Britain privatised its way out of that option decades ago in the Thatcher-era and has never seriously revisited it.
Analysis from the University of Oxford[1] found that maximising oil and gas extraction from the North Sea would only save households £16 to £82 per year – and this would rely on tax revenues collected being distributed to households to offset their energy bills.
Dr Anupam Sen, co-author of the analysis, said the idea that “draining” the North Sea would make the UK more energy secure and significantly cut household bills is “sheer fantasy”. “We show that regardless of the remaining lifetime of North Sea oil and gas, a ‘drill baby drill’ approach to extraction would actually cost households more money versus continuing on our path to clean energy.”
The authors stress that savings gained from the clean energy transition are recurring annual reductions in bills which would continue indefinitely, whereas North Sea oil and gas are finite resources that would run out around 2040.
[1] https://www.smithschool.ox.ac.uk/news/drill-baby-drill-appro...
“Drill baby drill” approach to North Sea would cost households more than a fully renewable UK, finds Oxford analysis
A UK powered fully by renewable energy could save all households up to £441 a year on their energy bills, according to a new Oxford Smith School analysis. In comparison, maximising oil & gas extraction from the North Sea would save households a modest £16 - £82 per year - and only if the tax revenues collected were distributed to households to offset their energy bills, the authors say.
Presumably because the price is a volatile, and storage gives you more flexibility around when you buy.
> Presumably because the price is a volatile, and storage gives you more flexibility around when you buy.
I will give credit to the person who got there before me. :)
Smoothing out price volatility is a big one.
But also it gives you options:
You can buy it "today" when its cheap and store it for when you need it (e.g. winter months).
You can also trade on that basis too. For example you can make a future-dated commitment to buy gas (knowing you have the storage available to take delivery). But if the situation changes and you later find you don't need it, you can sell that contract to someone else (or you can still take delivery and re-sell it). But you can't do any of that without having the ability to take delivery, because the person who sold you that future-dated contract will want both your money and to get the gas they sold you off their hands.
The UK (and Europe) could produce much more gas and consequently control prices if they wanted. It is easy to always blame the previous government(s) but the current situation is policy across Western Europe.
It takes time though and it's hard to anticipate geopolitical shocks like the war in Ukraine and Iran.
No, this has nothing to do with either. It is policy in the UK and EU not to produce gas on environmental and decarbonisation grounds, and so in fact high priced are policy.
> Iran
To be fair, I think you would be hard pushed to find anyone outside Israel who seriously thought Iran would ever be on the cards.
Netanyahu dedicated 40 years of his life going to various US presidents trying to get their buy-in. The US presidents all clearly listened to what their advisors had to say regarding Hormuz etc. and said "Thanks, but no thanks" to Netanyahu. Then Trump came along who was ready to over-rule his advisors and surrounded himself with yes-men in his cabinet.
I'm not being political here. A lot of it is public, for example just go to YouTube and look up the decades of videos of Netanyahu visiting the UN or US repeating the same line about "Iran being weeks away from a bomb", almost word-for-word for the last 40 years.
Exactly, and the Tories banned onshore wind, and refused to really invest in offshore wind. We've got the North Sea and its perfect for wind farms we should have had for decades
The current government is banning wind turbines factories and billions of Pounds in investments because "China". It is too easy to blame the previous government(s) when the current one has no strategic thinking or plan, either.
The study you have linked is completely wrong.
There is no international market for gas because export/import is physically complex. This is why gas is priced very differently despite it being chemically similar (unlike oil). Anyone who says anything different should be immediately disregarded as someone who should not have an opinion.
This is technically true for oil but there are two other factors. One, importing oil is environmentally-intensive and relies upon the assumption of free and open trade in oil...hopefully, the last few weeks have demonstrated why this is untrue. Two, the assumption is that mix of imports is not changing, because of high energy costs and reduction in North Sea production, UK refineries are shutting down so we are completely losing domestic capacity across the whole space. Lower jobs, lower tax revenues, more reliance on imports.
The above take would be somewhat funny if we weren't ten years into seeing the consequences of this. At this point, we could be back to the stone age and you would have the same people screeching that inventing fire is dangerous.
Also, Roughs storage facility is in the sea...so I am not sure what "real estate" development was done here (the UK has been building 10-20% of the required growth in housing stock for something like two decades...again, the same people will be screeching about developers if we lived in caves). The reason it was closed was due to economics.
For some reason, you deny that producing more gas would be useful but are outraged at a storage facility closing when the primary function of a storage facility is to allow energy producers to arb derivatives markets effectively. I have no idea how this makes sense to you based on all of the above...perhaps you just want to complain about the Tories? I have no idea.
The current tax rate on North Sea production is 75%, there was ample opportunity for public benefit but multiple governments took that money and spent it on benefits. The reason why Norway has worked is because they incentivized exploration (again, something that you imply later would have no benefit...but okay). The policy of the last fifteen years has been to tax the industry heavily and disincentivize exploration. Revisiting this approach is extremely unpopular amongst all politicians which is why production has dropped. Even with this limitation, we have large gas fields that have been blocked (by the Tories btw) for environmental reasons.
This isn't complicated: if you want more oil and gas, produce it and create more incentives to produce it. The reality is that people want to have their cake and eat it: North Sea production is both very pointless but paying huge amounts of carbon to import from the Middle East is a good idea and we have to pay subsidies of 30-40% electricity bills to subsidies green production...which is also very profitable but requires subsidies because of Tory developers or something.
The UK isn't a serious country. What is happening to the UK is a reflection of phenomenally poor political leadership. It is deserved.