Energy news in general

HillStreetBlues

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

Chrysalis

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

mmmmikey

I've seen a couple of YouTube videos recently by Greg Jackson from Octopus making some strong arguments in favour of zonal pricing. Well worth watching to help understand the benefits of this:

https://www.youtube.com/watch?v=8-WUhBtB_CM

https://www.youtube.com/watch?v=bcKKcTM1K48

Chrysalis

Seen them and dont agree with him, I think the burden has to be shared nationally, this will have massive inequality on energy costs, his idea is that it will encourage movement of industry and energy generation products, but he completely discounts the years of pain in between, he is likely wealthy enough on a personal level to not understand that pain for people.  The industry movement will also further cause economical pain in some of the poorest parts of the country. 

Can already see on a council to council level in terms of affluency the problems of localisation.
Even if there was some kind of transitional protection assuring no area will pay more than the previous national price, the inequality will cause unrest.
On the other hand I can see the benefits for his company, he could choose e.g. to not lower the costs in places like GB1 proportionate to the wholesale gains to increase margins for Octopus energy.

mmmmikey

Chrysalis said:

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

Don't the zones just reflect the grid infrastructure - i.e. there's no political element to their identification, they just reflect what we've got? So merging zones would involve substantial investment in pylons etc. and splitting them makes no sense in the context of the proposal for zonal prices. Also, the numbers given are the predicted 2025 numbers so presumably don't effect the massive investment in solar that's going on in much of the GB5 area (and I guess elsewhere?), and zonal pricing would certainly be a tool that could be used to stem some of the blatant NIMBYism that's hampering progress.

I have to say that my initial reaction is to not like the idea, but having seen and understood the argument in favour of zonal pricing I've changed my mind and haven't seen a compelling argument against it.

Chrysalis

mmmmikey said:

Chrysalis said:

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

Don't the zones just reflect the grid infrastructure - i.e. there's no political element to their identification, they just reflect what we've got? So merging zones would involve substantial investment in pylons etc. and splitting them makes no sense in the context of the proposal for zonal prices. Also, the numbers given are the predicted 2025 numbers so presumably don't effect the massive investment in solar that's going on in much of the GB5 area (and I guess elsewhere?), and zonal pricing would certainly be a tool that could be used to stem some of the blatant NIMBYism that's hampering progress.

I have to say that my initial reaction is to not like the idea, but having seen and understood the argument in favour of zonal pricing I've changed my mind and haven't seen a compelling argument against it.

Yes it needs investment in pylons, something that wasnt a problem when the grid was built.   Thats what they trying to sidestep as a shortcut.  The argument against is the inequality of energy cost and the distorted affect on industry, maybe you dont think things like that are wrong.  At the very least they need to make the Zones more fair, GB5 is ridiculous.

mmmmikey

Chrysalis said:

mmmmikey said:

Chrysalis said:

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

Don't the zones just reflect the grid infrastructure - i.e. there's no political element to their identification, they just reflect what we've got? So merging zones would involve substantial investment in pylons etc. and splitting them makes no sense in the context of the proposal for zonal prices. Also, the numbers given are the predicted 2025 numbers so presumably don't effect the massive investment in solar that's going on in much of the GB5 area (and I guess elsewhere?), and zonal pricing would certainly be a tool that could be used to stem some of the blatant NIMBYism that's hampering progress.

I have to say that my initial reaction is to not like the idea, but having seen and understood the argument in favour of zonal pricing I've changed my mind and haven't seen a compelling argument against it.

Yes it needs investment in pylons, something that wasnt a problem when the grid was built.   Thats what they trying to sidestep as a shortcut.  The argument against is the inequality of energy cost and the distorted affect on industry, maybe you dont think things like that are wrong.  At the very least they need to make the Zones more fair, GB5 is ridiculous.

If the effect of zonal pricing was that your prices went down 10% but mine went down 30% that would certainly create an inequality but given that we are both saving is that necessarily a bad thing? Unlike the standing charges debate which is about shifting costs from one group to another, this proposal is about reducing costs - the challenge being that costs aren't reduced the same for everyone. So although, other things being equal, I'd much prefer equal pricing I wouldn't support the idea of putting everyone's prices up so we all pay the same as the person that's paying the most.

Also, an effect of zonal pricing would be making it more attractive to level things out by building solar farms etc. where the energy is needed which would have a levelling out effect and be a different way of achieving what we both would like to see - i.e. more equitable pricing.

If I've understood it the zones are not something that have been arbitrarily chosen and can be redrawn with the stroke of a pen. They reflect existing infrastructure, i.e. simply a picture of how things today. It's not a question of someone deciding what they think is fair - it's just what we have now. No doubt the history is long and complicated but debating the rights and wrongs of how we got here doesn't change where we are. Zonal pricing isn't an alternative to putting that right by investing in more pylons, it's about removing the arguably ridiculous situation where, for example, folk in Scotland are paying a price for electricity based on the price of gas at the same time that the owners of the wind turbines up the road are being paid to shut them down.

Bottom line is that the UK energy market seems to me to be broken and leading to unnecessarily high pricing and zonal pricing is a way to start addressing that which could be done relatively quickly whilst the bigger work of upgrading the grid etc. takes place.

I think the main issue here is likely to be that whilst it's easy to see and understand the downside of zonal pricing the upside is altogether more technical and obscure and is going to be difficult to sell.

masonic

Chrysalis said:

mmmmikey said:

Chrysalis said:

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

Don't the zones just reflect the grid infrastructure - i.e. there's no political element to their identification, they just reflect what we've got? So merging zones would involve substantial investment in pylons etc. and splitting them makes no sense in the context of the proposal for zonal prices. Also, the numbers given are the predicted 2025 numbers so presumably don't effect the massive investment in solar that's going on in much of the GB5 area (and I guess elsewhere?), and zonal pricing would certainly be a tool that could be used to stem some of the blatant NIMBYism that's hampering progress.

I have to say that my initial reaction is to not like the idea, but having seen and understood the argument in favour of zonal pricing I've changed my mind and haven't seen a compelling argument against it.

Yes it needs investment in pylons, something that wasnt a problem when the grid was built.   Thats what they trying to sidestep as a shortcut.  The argument against is the inequality of energy cost and the distorted affect on industry, maybe you dont think things like that are wrong.  At the very least they need to make the Zones more fair, GB5 is ridiculous.

It seems like they need would need to implement with protections on consumer tariffs in place. Price cap should start out at the status quo, and progressively over years be lowered to be based on the cheaper zones with a requirement for the market to invest in levelling the playing field.

But I cannot see the logic in the GB4-6 sandwich in the east. Surely energy from the cheaper regions can flow into those few miles between them without inordinate costs.

MattMattMattUK

Chrysalis said:

he is likely wealthy enough on a personal level to not understand that pain for people. 

I have to say I really dislike this idea, the concept that just because someone is not currently experiencing something, or has not experienced it directly in the past means that they are incapable of understanding something or working through it and it's impacts. 

Chrysalis said:

The industry movement will also further cause economical pain in some of the poorest parts of the country. 

We already have a system of huge economic benefit for certain parts of the country in the way that rents and business rates exist. What I pay for a smallish office just outside of London would get me a single desk office in The City, or a thirty person office with warehouse space in the Midlands and the North, that is why the vast majority of manufacturing, apart from very high end production is all but gone from the South East. Energy pricing may factor in for some industries if it was applied, but it would only be one factor when premises costs and wages are a far bigger factor. It is pretty much impossible to set up a small manufacturing business in the South East but let us not pretend there is an equal playing field at the moment by any stretch. 

You also have to factor in that for very large consumers of electricity they will already be buying in a wholesale linked system, with different regional pricing baked into that.

Chrysalis said:

Can already see on a council to council level in terms of affluency the problems of localisation.

My local council has a large proportion of it's business rates confiscated by the government, around here specialist disability services are being abolished, the roads are more pot hole that surface and whilst it is not all rosy, as soon as I get to one of the "poorer" councils further afield I suddenly find smooth roads and far less rubbish on the streets. Some areas do have higher council tax, they are also generally hugely subsidised by other areas even just on a council provisioned service basis, let alone when one factors in benefits and services.

Chrysalis said:

Even if there was some kind of transitional protection assuring no area will pay more than the previous national price, the inequality will cause unrest.

It is unlikely to cause unrest, it will cause some people to whinge a lot, which is different.

Chrysalis said:

On the other hand I can see the benefits for his company, he could choose e.g. to not lower the costs in places like GB1 proportionate to the wholesale gains to increase margins for Octopus energy.

The prices would still be set by Ofgem...

Chrysalis said:

mmmmikey said:

Chrysalis said:

HillStreetBlues said:

The_Green_Hornet said:

Ofgem boss calls for truce in row over electricity market overhaul

Jonathan Brearley wants polarisation to be replaced with an ‘honest conversation’ about zonal pricing

The head of Britain’s energy regulator has called for an industry truce in the deepening row over plans to overhaul the electricity market.

A decision on whether to replace the country’s single electricity market with several market zones, each with their own price, is expected within weeks.

It could mean that homes in areas where there is an abundance of electricity generation will pay lower prices than those in areas of high demand and low generation capacity.

Ofgem boss calls for truce in row over electricity market overhaul | Energy industry | The Guardian

So those in Mid to South Wales will be subsidising those in London based on GB6  Who on earth cane up with those zones?

GB5 is horrific a tiny portion of coastline.  East midlands "might" be saved as its part of Norfolk region, GB5 is west midlands by look of it.

GB3 should be merged with GB4, and GB 5,6,7 should all be one region.

Octopus are wrong to push for this in my opinion.
It seems an attempt to shortcut the real problem which is lack of national transmission capacity.

Not entirely sure on east midlands, Leicester and derby might be in the cursed GB5.

Was there a public consultation on this, or just suppliers only?

Don't the zones just reflect the grid infrastructure - i.e. there's no political element to their identification, they just reflect what we've got? So merging zones would involve substantial investment in pylons etc. and splitting them makes no sense in the context of the proposal for zonal prices. Also, the numbers given are the predicted 2025 numbers so presumably don't effect the massive investment in solar that's going on in much of the GB5 area (and I guess elsewhere?), and zonal pricing would certainly be a tool that could be used to stem some of the blatant NIMBYism that's hampering progress.

I have to say that my initial reaction is to not like the idea, but having seen and understood the argument in favour of zonal pricing I've changed my mind and haven't seen a compelling argument against it.

Yes it needs investment in pylons, something that wasnt a problem when the grid was built.   Thats what they trying to sidestep as a shortcut. 

Are you willing to pay more to fund the investment, not "someone else", not "government", but you? If not then that argument fails at the first hurdle. The shortcut exists because the majority of the electorate are too selfish to recognise that we all benefit if we all invest in infrastructure, so instead the industry and regulator is left looking for shortcuts to keep the lights on and to keep pricing somewhat reasonable.

Chrysalis said:
The argument against is the inequality of energy cost and the distorted affect on industry, maybe you dont think things like that are wrong. 

That is not an argument in itself, just a statement that you do not like something. There would be no "distorted affect on industry", there would be basic market forces, market forces which apply to most other areas of business for rent, business rates (heavily subsidised in some areas with enterprise zones making them exempt), transport costs, wage costs, opportunity cost of location etc.

Chrysalis said:
At the very least they need to make the Zones more fair, GB5 is ridiculous.

Throwing around emotive concept of "fairness", by which you really mean "I don't like it", is not a valid argument. The GB5 zone makes sense because that is how the infrastructure exists, as do the other zones. You want to instead decide them on a random basis, rather than a rational infrastructure basis, that makes no sense.

The best thing with all of this, with the supply, cost, energy security, investment etc. is to take the emotion out of it and look at it rationally and logically, instead you continually want to throw rational discussion out and make it entirely about emotions and not about facts. 

Doc_N

Isn’t this essentially just a lever to use to ‘persuade’ otherwise reluctant areas to take on wind and solar installations they’d otherwise be objecting to? This is happening already.