Energy news in general

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Ildhund

Will a 20% fall in gas prices just as (I think) Ofgem are collating the data for the Q2 price cap lead to a lower rise than currently anticipated?
  

Scot_39

If it is on the future delivery period pricing they use rather than spot possibly.

Past longer term future delivery pricing was barely moved by other mini crisis like the threatened Australian strikes - spot markets were jumping around 10% every other week as unions and bosses negotiated in public eye - as individual meetings failed to resolve and deadlines came and went. 

Averaging 10, 10 and 9 is better than 10, 10, and 10.

But over a several week window - a few days won't make a massive difference.

And pretty sure with only days till cap announcements- we might have missed the Apr window.


CI last prediction wax based on yesterday's closing price record.

It stands at £1823 vs £1738 - but cautions could be at least £20 too low if the debt special continues.



https://www.cornwall-insight.com/predictions-and-insights-into-the-default-tariff-cap/

What_time_is_it

Ildhund said:

Will a 20% fall in gas prices just as (I think) Ofgem are collating the data for the Q2 price cap lead to a lower rise than currently anticipated?
  

No. The period for setting the price for the April to June price cap has now ended. It might affect the July to Sept price cap though.

stripling

Ildhund said:

Will a 20% fall in gas prices just as (I think) Ofgem are collating the data for the Q2 price cap lead to a lower rise than currently anticipated?
  

As others have said it's worked out over a longer period. I think further back in this thread I referred to how analysts identified US Hedge funds as gaming the Dutch TTF market (it started after 2008). EU storage regs (which provided dates for when countries 'must' buy) were adding to the cocktail.

What has changed the last few days is the EU storage rules are now being discussed and possibly loosened so they can't be gamed from afar. Down go prices (for now). But the price cap takes a longer view so caution is recommended. 

Scot_39

Ildhund said:

Talking of which, Cornwall has an article about TNUoS, a topic which will undoubtedly figure largely in the standing charge reform debate.

Why would anyone be surprised by the simple fact that it is far more expensive to connect up new generation when site it often literally 100s of miles from consumers.

Take current uk generation distribution.

Scotland already has an excess of renewable power - iirc just under 15GW at c48% of the c30.3 GW installed as of late last year - far more than it needs on a windy day for its 5.5m out of 67m share of uk population. UK total demand of say summer demand peaks around 30GW and winter 45GW.

Two thirds of it curently onshore - much higher than south of the border but much of the licensed expansion in next 5 years another 6GW taking c5 to c11 GW is off shore - often again in far north. 

So well over 20GW renewables generation capacity planned North of border by 2030.

So we're spending - well grid companies that we will pay  - upto £77bn in next five years.  In part to connect to new generation sites and to increase capacity at major demand centres. 

Its not all new / remote distance related . A lot of it will be doubling up - or more - existing power transmission capacity. 30m BEVs and 25m ashp etc need 10 GW plus more power each on top of existing 30-45GW uk electric demand. And it's the winter bias in both those new 10-15Gw demand numbers that will be pushing grid  capacity hardest..

But many £bns of that £77bn will simply be to bring more of the existing sites and new future developments south.  And until its built we face £100s millions predicted to grow to £billions per annum in curtailment payments to remote renewables farms.

Egl1 and egl2 now finally after years in case of egl2  approved by Ofgem to add to existing wgl energy flow south.

Egl3 and 4 already being planned.

Egl2 at an estimated £4bn plus in todays money for the direct link from Peterhead to Drax in Yorkshire - that's a 350m distance.  It's price repotedly increasesed by over £1bn during 2 years  planning and Ofgem cost approval delays.  And that delay by the way adds £100s millions more in renewables curtailment fees pa - as its key to reverse the predicted growth upto ESOs c2030 forecadt peak £3bn thermal constraint.

But in reality that needs £bns more of land and other under sea cable links - totalling 100s miles more - 1 hvdc link across Murray firth being looked at and potentially even including the Shetland hvdc link 600MW iirc to bring more of Vikings recently expanded to c440MW (connected cAug 24) to mainland - to feed it's current authorised 2GW capacity.

For years we have failed to plan properly.  It's a complex chain - generation, transmission to market and consumption. 

But in UK for too long, govts (farm license fees in Scotland go to Scottish Crown office coffers directly iirc) sell licenses for production with guaranteed payment,  before Ofgem authorises and then grid companies actually build transmission.

The result of a lack of proper full chain planning - ESOs forecast upto £3bn peak in grid thermal curtailment payments. 

Avoidable by integrated planning - or not building farms remotely in first place.

As the article states £35 remote vs -£5 local.

Arguably yet another cost we will all have to pay - sadly in part due to nimbyism and England's defacto ban on onshore wind since 2015.  Now being reversed after nearly a decade.

stripling

The_Green_Hornet said:

Miliband urges energy watchdog to act as typical bill could rise by more than £100 a year

Ed Miliband has urged the energy watchdog to take swift action as it emerged that the typical energy bill could soar by more than £100 a year amid a rise in global gas prices.

A Whitehall source said they expected bills in England, Scotland and Wales to increase by about £9 a month over the next three months in a blow to government plans to tackle the cost of living.

They blamed volatile global gas prices linked to the end of the transit deal that enabled gas to flow to Europe, through Ukraine, from Russia.

Miliband urges energy watchdog to act as typical bill could rise by more than £100 a year | Energy bills | The Guardian

Not disputing the need for 'swift action' on bills etc., but am disputing the Guardian's very uninformed reasoning for 'volatile gas prices'.  

The end of the Ukraine Transit deal was priced into margins a very long time ago. This nonsense excuse has been recycled so many times that traders and analysts a while back coined a really crude (but hilarious) expression for it.  [I was well-brought up - I won't repeat it in polite company 🫢😁]

Scot_39

Perhaps since the obvious negative impacts of renewables spend on our bills for most of the last decade hasn't been enough to change policy,  the presence of more on shore wind might have an impact.

Its not quite impossible but is pretty difficult to go anywhere in Scotland by even just a few miles out of any town centre - in many cases even within city boundaries - and not see them - or feel / hear them if get close enough.

Perhaps even make alternative sources (far more reliable in terms of consistency) and still carbon free at time of generation sources like tidal (river or moreso arguably estuary tank / lagoon capture with its storage avantages ) or even nuclear  get a fairer hearing.

stripling

@Scot_39
Perhaps since the obvious impacts of renewables spend on our bills hasn't been enough to change policy,  the presence of more on shore wind - its not quite impossible but is pretty difficult to go anywhere in Scotland by even just a few miles out of any town centre - in many cases even within - and not see them - will perhaps nake alternative far more reliable in terms of consistency and still carbon free at time of generation sources like tidal (tpriver or estuary) or nuclear  get a fairer hearing. 

Ireland is piloting a scheme that heats water for free in social housing all powered by 'excess' wind farm generation. It's part of their wider project to approach energy poverty. It involves ability to manage water heating remotely but it doesn't interfere with domestic control. If the pilot is successful it will be extended to a much bigger range of consumers. 

BTW these (not so?) obvious impacts of renewables on bills are only because it's weighted onto electricity instead of gas where it should be (if at all?).  Other countries do it differently. 

Scot_39

The loading into standing charges has increased awareness - or should have - over last 2 years.

Of what's happening - and forecast to increase - in immediate/ foreseeable future - as forecast by Ofgem knowing the spending authorised.

But the reality is levies on gas generation have existed for years.

The question arguably is whether domestic gas unit rates will ever reflect the carbon emissions costs at time of burning in the home.

The potential political acceptability of which is dubious.

But just like the buyer cash incentives for BEVs have - more recently come Apr in fact - even many of the larger (1st and upto 5 yr if over 40k etc)  road tax (sorry ved) savings abandoned - its clear the £7500 ashp bribe isn't working that well.

So the carrot will become the stick.  And the very obvious stick for domestic gas is a carbon emissions cost on every m3 / kWh of gas burnt.

If put say a typical install of ashp at c5k above gch boiler - boiler and rads combined - and assume a shortish 10yr lifespan - say £500 per year at 11500 kWh might be needed - so say 4p on top of forecast 7p Apr cap rates.

To persuade the masses to switch by 2045/50.