Solar ... In the news

GreatApe

michaels wrote: »

Economically it makes sense to separate fixed and variable costs but that is very unpopular on fairness grounds as poor low users appear to pay much more and on environmental grounds as margins cost unit pricing may well encourage greater use.

They will need to tax electric cars somehow to make up for the loss of fuel duty.

There should be 3 different regulated tariffs

1: The normal tariff as is now which is typically about 15p / unit and quite a low fixed charge

2: An additional tariff for EVs which should be just the marginal cost of offshore wind power (the fixed grid and business costs already mostly paid for by #1) so about 6p a unit. With smart charging of EVs

3: An additional tariff for heating which should be just the marginal cost of offshore wind power so lets say 6p a unit. Again like #2 this should be available when the national and local grid capacity has excess which again is pretty much all the time outside of the 100 colder days 4-8pm. If you want/need to heat outside of spare capacity the electricity is charged as #1 which will pay for grid upgrades

This is needed to electrify heating and transport and in the mid to long term could be 80/20 Wind/CCGT

GreatApe

Martyn1981 wrote: »

If they are using the grid less, then why should they pay the same as a high user.

Less leccy - less payments, surely that is 'paying their fair share.'

because it does not add up

If electricity costs 5p a unit and 10p in other costs then sure everyone can pay 15p and it works

but if everyone now uses 50% less what happens? Can we continue paying 15p a unit?

No because the 10p 'other costs' now spread among half as many units mean the cost to supply you is now 5p + 20p other costs so you need to pay 25p a unit

So clearly on a national level the biggest factor for cost is the amount of electricity we use.
If we use less we pay more per unit, if we use more we pay less per unit and this needs to be reflected in the tarriffs

The two extremes are, all in unit cost, or very high line cost and just marginal electricity costs

Both have good and bad points.
Overall you lean towards the all in costs cos it suits you personally and you think it will help residential PV deployment
I'm in favor of high line cost and 6p marginal cost because that way we can see a rapid switch to electrical heating which is what is required and this could be powered by 6p offshore wind probably at a 80/20 ratio wind/ccgt

pile-o-stone

Martyn1981 wrote: »

If they are using the grid less, then why should they pay the same as a high user.

Less leccy - less payments, surely that is 'paying their fair share.'

The argument is that we solar owners still need the infrastructure to get the electricity to our houses, regardless of how much energy is then used. The infrastructure should be maintained equally by everyone who uses it, which is what the standing charge used to be about. If the same set fee, similar to the BT landline charge, is put on everyone's bill and is properly costed so it covers maintenance without a profit aspect, then I think that'd be fair.

The option if you don't like the idea of maintaining the grid is to get off it, though this would undoubtedly be more expensive than paying a standing charge.

Martyn1981

pile-o-stone wrote: »

The argument is that we solar owners still need the infrastructure to get the electricity to our houses, regardless of how much energy is then used. The infrastructure should be maintained equally by everyone who uses it, which is what the standing charge used to be about. If the same set fee, similar to the BT landline charge, is put on everyone's bill and is properly costed so it covers maintenance without a profit aspect, then I think that'd be fair.

The option if you don't like the idea of maintaining the grid is to get off it, though this would undoubtedly be more expensive than paying a standing charge.

All of the studies done in the US, when trying to ascertain what a fair net metering price should be, found that distributed generation had a very high value since it brought multiple benefits, such as reduced emissions, reduced upgrade costs to the local network, lowered peak demand (from the centralised side) etc etc..

So whilst I believe low leccy users (import) should pay less for the cost of the infrastructure, I also feel that small scale distributed generators, bring even more benefits.

Plus of course PV export has no impact further upstream than the local phase that it is being exported on to nearby consumers.

pile-o-stone wrote: »

The infrastructure should be maintained equally by everyone who uses it, which is what the standing charge used to be about.

I get this argument, but I also fundamentally disagree with it, hence why I favour the 'petrol forecourt' pricing argument for overheads to be included in the unit price, and thereby reflect usage.

I don't pay Tesco's, Sainsbury's etc an annual fee for the right to enter their premises and buy something. Instead, all the costs are included in the product itself, as is the case with probably 99% of the different items we buy.

zeupater

Martyn1981 wrote: »

All of the studies done in the US, when trying to ascertain what a fair net metering price should be, found that distributed generation had a very high value since it brought multiple benefits, such as reduced emissions, reduced upgrade costs to the local network, lowered peak demand (from the centralised side) etc etc..

So whilst I believe low leccy users (import) should pay less for the cost of the infrastructure, I also feel that small scale distributed generators, bring even more benefits.

Plus of course PV export has no impact further upstream than the local phase that it is being exported on to nearby consumers.




I get this argument, but I also fundamentally disagree with it, hence why I favour the 'petrol forecourt' pricing argument for overheads to be included in the unit price, and thereby reflect usage.

I don't pay Tesco's, Sainsbury's etc an annual fee for the right to enter their premises and buy something. Instead, all the costs are included in the product itself, as is the case with probably 99% of the different items we buy.

Hi

Totally agree ... distributed generation has a massive impact on the required capacity of the national infrastructure - National Grid accepted this & promoted the benefits years ago. As micro & distributed generation increases it's share of energy provision, the grid infrastructure investment actually falls, so fixed cost reductions should be passed on to consumers through lower standing charges ..... obviously, given enough pressure, the message will eventually get through to [STRIKE]the energy sector cartel protector[/STRIKE] Ofgem ....

To meet the government's 2050 carbon target, decisions to discourage unnecessary energy use & encourage efficiency measures must be taken, therefore energy pricing must be loaded towards the variable as opposed to fixed .... If energy tariffs were fixed (as in unlimited usage within a period, subject to a fair usage clause) then there'd be no incentive to reduce consumption, whereas removing a fixed element completely is reflected immediately within the unit price, which provides total price transparency to all consumers thus removing the comparison complexity that the industry is allowed (by the regulator!) to hide behind ...

Forecourt pricing is really the only logical way forward, how long it will take Ofgem & Parliament to realise this is a different story ...

HTH
Z

silverwhistle

pile-o-stone wrote: »

The infrastructure should be maintained equally by everyone who uses it, which is what the standing charge used to be about. .

No it shouldn't, not if we don't make equal use of it. If everybody were to be rationed to (say) 3kW peak demand, which is in fact the case in Italy unless you pay more, then an equal division of the cost might be equitable. But some people put far greater demands on the system, for which additional costs are incurred, and for that they should pay more.



Similarly I think we'll eventually end up with mileage pricing for roads. If the demands you make on the road system are not directly reflected in what you spend on fossil fuels if you should get an EV then, ultimately, there will need to be another mechanism to prevent road overcrowding and help replace fuel duty in the government's coffers.

silverwhistle

zeupater wrote: »

whereas removing a fixed element completely is reflected immediately within the unit price, which provides total price transparency to all consumers thus removing the comparison complexity that the industry is allowed (by the regulator!) to hide behind ...

Exactly this, and I'd refer anybody interested to my post above and to the EBICO web site, where they can see the impact of standing charges on low users. They will come to the conclusion that ONLY low users would use EBICO's standing charge free tariff, but it would also underline that the same impact is on low users paying standing charges for any supplier.



I have PV and can afford my bills easily but it cannot be stressed enough that the current pricing structure is regressive..

pile-o-stone

silverwhistle wrote: »

No it shouldn't, not if we don't make equal use of it. If everybody were to be rationed to (say) 3kW peak demand, which is in fact the case in Italy unless you pay more, then an equal division of the cost might be equitable. But some people put far greater demands on the system, for which additional costs are incurred, and for that they should pay more.

Taking that argument further you could say that people in rural or sparsely populated communities should pay more because it costs more to supply them due to longer cable runs and greater potential to damage in exposed areas. It starts getting complex if we have to factor in lots of variables, so a fixed fee would probably be cheaper to administer.

JKenH

pile-o-stone wrote: »

Taking that argument further you could say that people in rural or sparsely populated communities should pay more because it costs more to supply them due to longer cable runs and greater potential to damage in exposed areas

... and people in urban areas who live further from the generation point should also pay more to cover the infrastructure cost of getting the electricity to them. Ditto water and gas users.

zeupater

pile-o-stone wrote: »

Taking that argument further you could say that people in rural or sparsely populated communities should pay more because it costs more to supply them due to longer cable runs and greater potential to damage in exposed areas. It starts getting complex if we have to factor in lots of variables, so a fixed fee would probably be cheaper to administer.

Hi

But the variables are all factored in already, as evidenced by different areas having different variable pricing structures as opposed to a single national rate and the maintenance of a regional fixed charge which is supposed to cover the difference in fixed supply costs.

The issue is that the entire energy sector is vehemently opposed to price transparency because it would drive real competition throughout the industry ... in the tariff simplification exercise a few years back, in order to deliver simplification, transparency & competition, Ofgem should have mandated that both regional price discrepancies & the application of standing charges should cease and that all suppliers should headline their offerings on a straight pence/kWh basis. This would enable all consumers to directly compare all suppliers without knowing all of the variables which can distort the accuracy of comparison websites ...

... just think of the savings which could be passed on to all consumers if the suppliers weren't continually paying commission to the comparison sites for handling the complexity that they are so protective of ...

HTH
Z