Who benefits financially from exported electricity?

Reed_Richards

I live in a village, Not many houses here have solar panels so it's fairly likely that any unused electricity that leaves my house is used elsewhere in the village. But my export is not metered so nobody knows how much all the electricity suppliers to the village have saved because of me. If the electricity suppliers don't know about it, how can they benefit? In fact how can each electricity supply company know how much energy they actually provided? Do they just total up everybody's meter readings, give the total to whoever they buy their wholesale electricity from and and get a bill that reflects this total? So, if this is correct, is it the wholesale vendors of electricity who benefit because they can charge for more electricity than they actually supplied?

GreatApe

It probably just shows up as lower losses in the transmission and distribution grids
So it is socialised. Who benefits. Well everyone by a marginally lower electricity price and I mean very very marginally

If you total every single person in your situation it probably doesn't even come to a total annual saving of 50p per year per household but you lose out. Actually this isn't true, while the other households save maybe 50p from your and every solar owners gifted free exports the very same households are paying for your FITs via higher electricity prices

Solarchaser

If the supply was accurately measured, they would know they have supplied 1mwh, but are able to charge (through customers meters) 1.5mwh.

But in reality they dont care.
They may think the new overhead lines /transformers are performing better than the old ones, or pos6dont even notice.

mmmmikey

Hi

In practice there are lots of reasons why what's generated at the power stations and what's metered don't add up, and as GA points out transmission losses is a big part of this. In the general scale of things, the difference in solar export between the 50% assumption and what is actually exported is a drop in the ocean and insignificant.

To put some rough and ready numbers to this, if there are a million customers with solar arrays generating 3,000kWh each over a year, that equates to 3Gwh of generation per year. It is assumed that 1.5GWh per year is exported, but let's say for argument sake that's 0.5GWh out in one direction or the other. A quick Google search shows that the UK used 98.9TWh (i.e. 98,900 GWh) in 2017, so the 0.5GWh error in the assumption represents 0.0005% or about 0.25p annualy on a £500 electricty bill. This compares with about 2% transmission loss. (Anyone - please feel free to correct my arithmetic if I've got this wrong).

Also worth noting that domestic meters (before the days of smart meters) only show a total of what has been used between the date of two readings, which could be a year apart, whereas the price varies day by day and half hour by half hour. So at best metering is approximate and all kinds of formulas and rules exist to work out who pays what.

The National Grid plays a part here too. Although your energy supplier tells the generator how much electricty they think they're going to need and when, this is just an estimate to base contracts on and help planning. In practice it is the National Grid that tells the generators to increase or decrease supply on a minute by minute basis, and there is a cost associated with this management function.

All these factors are sorted out when the various parties sit down with their spreadsheets and work out between them who pays what - this is all done in accordance with Ofgem rules. Again, as GA says, any benefit of export above the 50% assumption or any cost below the 50% assumption is "socialised" - i.e simply split between the various parties. Ultimately, it is us, collectively, as consumers, who benefit from any export over 50% because of the role that Ofgem takes to ensure the market operates fairly.

I'll leave you to decide how to spend your 0.25p this year - perhaps save it up for Christmas


EDIT: Whoops! These figures are nonsense - see Martyn's post below - hanging my head in shame....

michaels

My panels face w so generate most between 12 and 6 in the summer. How does the wholesale price at that time compare to my fit of 14p ish per unit?

Martyn1981

mmmmikey wrote: »

Hi

To put some rough and ready numbers to this, if there are a million customers with solar arrays generating 3,000kWh each over a year, that equates to 3Gwh of generation per year. It is assumed that 1.5GWh per year is exported, but let's say for argument sake that's 0.5GWh out in one direction or the other. A quick Google search shows that the UK used 98.9TWh (i.e. 98,900 GWh) in 2017, so the 0.5GWh error in the assumption represents 0.0005% or about 0.25p annualy on a £500 electricty bill. This compares with about 2% transmission loss. (Anyone - please feel free to correct my arithmetic if I've got this wrong).

Hiya, and sorry for what's to follow!

Off the top of my head which is rude I admit, but typically UK leccy generation is almost 4x that figure, at around 350-400TWh, so perhaps you found a quarterly figure?

Also you have understated the PV generation example a tad (or three orders of magnitude ) as 1m households at 3MWh's (3,000kWh's) would work out at 3TWh's (3,000GWh's), or close to 1% of annual leccy demand, or 3.33% of domestic demand.

From there the 0.0005% becomes 0.14% (0.5TWh / 350TWh), and 70p on a £500 bill. [I may be getting confused now and a bit lost, but I think your 25p figure should have been 0.25p, I think you may have divided £500 by 0.0005 instead of 0.0005%?]

On to transmission losses, these vary across the country to a small degree, but are roughly about 8%, split (again very roughly) 2% high voltage, and 6% low voltage (the DNO's). As a rough rule you can value your PV generation as displacing approx 108% gas generation (leccy kWh's) and 200% in gas kWh's from centralised generation as losses from self consumption, or the nearby neighbours (on the same phase) will be negligible.

Really, really sorry for all the pedantry, but you did ask!


As to the fairness, or otherwise of deemed export, well I'm a good example, with annual generation around 4,500kWh's, and export payments based on half that, 2,250, but in reality we export about 3,000kWh's, so lose approx £25pa, which isn't the end of the World.

Going back to the start of PV deployment under FiTs, the leccy suppliers seem content that export is greater than 50%, on average, but as I've seen diverters, and now batteries being deployed, things may swing the other way over time, and then we can expect it to be metered ...... of course!

mmmmikey

Martyn1981 wrote: »

Hiya, and sorry for what's to follow!

Off the top of my head which is rude I admit, but typically UK leccy generation is almost 4x that figure, at around 350-400TWh, so perhaps you found a quarterly figure?

Also you have understated the PV generation example a tad (or three orders of magnitude ) as 1m households at 3MWh's (3,000kWh's) would work out at 3TWh's (3,000GWh's), or close to 1% of annual leccy demand, or 3.33% of domestic demand.

From there the 0.0005% becomes 0.14% (0.5TWh / 350TWh), and 70p on a £500 bill. [I may be getting confused now and a bit lost, but I think your 25p figure should have been 0.25p, I think you may have divided £500 by 0.0005 instead of 0.0005%?]

On to transmission losses, these vary across the country to a small degree, but are roughly about 8%, split (again very roughly) 2% high voltage, and 6% low voltage (the DNO's). As a rough rule you can value your PV generation as displacing approx 108% gas generation (leccy kWh's) and 200% in gas kWh's from centralised generation as losses from self consumption, or the nearby neighbours (on the same phase) will be negligible.

Really, really sorry for all the pedantry, but you did ask!


As to the fairness, or otherwise of deemed export, well I'm a good example, with annual generation around 4,500kWh's, and export payments based on half that, 2,250, but in reality we export about 3,000kWh's, so lose approx £25pa, which isn't the end of the World.

Going back to the start of PV deployment under FiTs, the leccy suppliers seem content that export is greater than 50%, on average, but as I've seen diverters, and now batteries being deployed, things may swing the other way over time, and then we can expect it to be metered ...... of course!

You're right of course, my figures are nonsense. In my defence, I had been working on my prototype domestic scale nuclear fired boiler and the fallout from the mushroom cloud had left me feeling a bit queasy and not thinking straight....

As far as export payments are concerned, anything that's worked on averages and assumptions rather than measured is always going to benefit some and cost others, so inherently unfair. I'm not able to answer michaels' question above re: wholesale pricing but one thing that does allude to is that the energy he exports in the afternoon is worth more than the energy I export in the morning, kWh for kWh, but we get paid the same. So the current system arguably doesn't treat us as consumers fairly when we compare ourselves with each other.

Looking at the relationship between the consumer and the suppliers, as far as who benefits or loses, it's always ultimately us, the consumer as any cost or saving borne by the energy suppliers ultimately works it way through to higher or lower bills.

To make this fair, what we need is some kind of metering that measures export in half-hourly increments and to use that as the basis for payment - which is exactly what smart meters will do Such a shame that the roll out has (to my way of thinking) been such a fiasco. And of course there are some very valid questions about whether the benefit justifies the cost (in the long term it does, in my view, but I know there are others who have valid arguments to the contrary).

thevilla

Re Michaels query: How does the wholesale price at that time compare to my fit of 14p ish per unit?

https://electricinsights.co.uk