MSE News: British Gas boss defends energy price rises

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  • magyar
    magyar Posts: 18,909 Forumite
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    Bobjob wrote: »
    Funny, I don't remember a big trough in energy prices to the consumer at that time. I seem to recall an insignificant price cut, mainly for online DD customers, heralded by millions of pounds of advertising by British Gas.

    I'm not here to defend British Gas but I would point out that:

    1) Given that wholesale price only makes up 35% of electricity price and 57% of electricity price (at today's prices) then halving the wholesale price of electricity would result in a drop of only 17.5% in electricity prices.

    2) Customers aren't (and wouldn't want to be) exposed to the day-to-day fluctuations in wholesale prices, which means that falls and rises are smoothed out.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • Dejay
    Dejay Posts: 55 Forumite
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    http://www.telegraph.co.uk/earth/energy/windpower/7840035/Firms-paid-to-shut-down-wind-farms-when-the-wind-is-blowing.html

    Here is a report ain the Telegrapg bout subsidies to firms paid to shut down windfarms.
  • magyar
    magyar Posts: 18,909 Forumite
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    Dejay wrote: »
    http://www.telegraph.co.uk/earth/energy/windpower/7840035/Firms-paid-to-shut-down-wind-farms-when-the-wind-is-blowing.html

    Here is a report ain the Telegrapg bout subsidies to firms paid to shut down windfarms.

    To repeat the point I've made a number of times, this is not a subsidy.

    This is a commercial arrangement between all transmission-connected generators (whether coal, gas, nuclear or wind) and National Grid.

    Each generator can 'bid' the amount of money it would require in order to reduce generation. It's not in any way 'special' to wind, and in fact the vast majority of wind farms would not be able to participate in this arrangement because they are connected to the distribution system (the low-voltage local systems) rather than transmission system (the high-voltage 'backbone' of the grid).
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • murphydavid
    murphydavid Posts: 832 Forumite
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    I'm so against subsidies, They distort everything. My neighbour has installed (free to him) solar panels on his roof. He was persuaded to do this because he gets some free electricity in the day time when he is at home. The company who own the panels expects to gets sufficient subsidies from when he is not at home to pay for the panels and a healthy profit. Its one way to get the general public to pay for green energy I suppose, but, the owners of the company - relatively wealthy - I feel have a hand in my back pocket, the house owner also relatively wealthy will pay increased prices for the energy he uses at night as will we all (prices will increase to pay the subsidy of course). The energy required to heat up the silicone and sand to make solar panels and the life span of the panels etc. - do we gain anything green? Don't make any sense to me.
  • grahamc2003
    grahamc2003 Posts: 1,771 Forumite
    edited 23 June 2011 at 12:43PM
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    Dejay, as you have discovered, you have to use precise wording when describing the payment going to windmills - some people are very touchy for some reason. Whether you call the hundreds of thousands of pounds of your money paid to windmill owners 'subsidy' or just 'payment' doesn't affect how that amount finds its way onto your electricity bill. And contrary to what the other poster said, the article clearly states a major difference in the magnitude of such payments to conventional plant (being typically £15-£20/MWh) and that paid to windmills (£180/MWh) as quoted in the article. And of course, in addition to those payments, windmills attract direct subsidies under therenewable obligation, and indirect subsidies (whether they are operating or not) by operating proceudres which favour renewables over conventional generation.

    All in all, as stated previously, the cost of these and other environmental incentives/subsidy/obligations/initiatives/payments (pedants can take their pick) are, according to recent British Gas figures, 37% of the wholesale energy costs in our electricity bills (i.e. for £3 of actual wholesale electricity cost, you and I pay £1 (approximately) for green measures.

    Edit - I might as well also add that a professional report I read a few weeks ago analysing the total costs of windpower - and I found no fault in the analysis - came out with a figure approaching £1000/MWh, compared to a market price from conventional stations of around £40/MWh. I read many technical reports related to the esi, and I'm sorry to say I can't offer a reference to the report, so make of it what you will (or make nothing of it).
  • magyar
    magyar Posts: 18,909 Forumite
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    edited 23 June 2011 at 1:13PM
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    Dejay, as you have discovered, you have to use precise wording when describing the payment going to windmills - some people are very touchy for some reason.

    This industry is my livelihood, and it's being affected by deliberately misleading information in the national press. Forgive me if I'm a little touchy.
    Whether you call the hundreds of thousands of pounds of your money paid to windmill owners 'subsidy' or just 'payment' doesn't affect how that amount finds its way onto your electricity bill.

    This is quite simple. If a payment is made to ALL generators, you cannot under any definition of the word call it a subsidy. This isn't pedantry, it's just statement of fact.
    And contrary to what the other poster said, the article clearly states a major difference in the magnitude of such payments to conventional plant (being typically £15-£20/MWh) and that paid to windmills (£180/MWh) as quoted in the article.

    Those payments are not fixed at those prices, it's whatever those generators chose to bid. The conventional plant would have been quite free to bid those prices. The simple fact is that it's an expensive option for National Grid to take off a wind farm because it doesn't really cost a power station that much not to generate (because they don't 'lose' the fuel). Whereas a wind farm will lose about £100/MWh if it doesn't generate when it would be capable of doing so.
    And of course, in addition to those payments, windmills attract direct subsidies under therenewable obligation, and indirect subsidies (whether they are operating or not) by operating proceudres which favour renewables over conventional generation.

    Which are?

    You have still not substantiated a single claim you have made.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • magyar
    magyar Posts: 18,909 Forumite
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    Edit - I might as well also add that a professional report I read a few weeks ago analysing the total costs of windpower - and I found no fault in the analysis - came out with a figure approaching £1000/MWh, compared to a market price from conventional stations of around £40/MWh. I read many technical reports related to the esi, and I'm sorry to say I can't offer a reference to the report, so make of it what you will (or make nothing of it).

    And clearly I cannot comment on it other than to say it makes absolutely no sense whatsoever. The total value of the output from a wind farm is worth (in today's prices) about

    £50 from wholesale power
    £45 from a ROC
    £5 from a LEC
    £5 or so in embedded benefits (depending on where it's sited)
    -£5 or so in imbalance cost

    Thus a total price of about £100/MWh. If you can explain how this can possible cost the consumer ten times that figure, I'd be happy to listen.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • grahamc2003
    grahamc2003 Posts: 1,771 Forumite
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    magyar wrote: »
    This industry is my livelihood, and it's being affected by lies in the national press. Forgive me if I'm a little touchy.
    You are more than a little touchy, you are letting your emotion cloud your judgement and in addition treat information of which you are unaware as lies, and those knowledgeable of those facts 'liars', and even worse you find it impossible to apologise, which speaks wonders for your professionalism.

    Even if you earn your crust from windmills or ‘renewables’, you should still see them in an unbiased manner. I know its de rigour in environmentalism to quickly and severely snuff out any criticism of any aspect of it, but I think that attitude will eventually prove counterproductive.
  • magyar
    magyar Posts: 18,909 Forumite
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    You are more than a little touchy, you are letting your emotion cloud your judgement and in addition treat information of which you are unaware as lies, and those knowledgeable of those facts 'liars', and even worse you find it impossible to apologise, which speaks wonders for your professionalism.

    Even if you earn your crust from windmills or ‘renewables’, you should still see them in an unbiased manner. I know its de rigour in environmentalism to quickly and severely snuff out any criticism of any aspect of it, but I think that attitude will eventually prove counterproductive.

    What I object to criticism which is allegedly based on spurious claims which cannot be substantiated. If there is information 'of which I am unaware' then all I ask is that you present it, either by way of reference or ab initio.

    I cannot repeat enough times that if you can actually present any information to back up your claims I will apologise unreservedly.
    Says James, in my opinion, there's nothing in this world
    Beats a '52 Vincent and a red headed girl
  • HalloweenJack
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    again graham2003 - where do you get a figure of 37% from
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