Energy news in general

QrizB

https://forums.moneysavingexpert.com/discussion/comment/82046932#Comment_82046932

I looked at the Agile price chart at energy-stats.uk earlier and was wondering if Octopus would offer a mega saving session from 0630-0930 when Agile was sky-high everywhere. Possibly they thought that was too much to ask of their customers?

Qyburn

https://forums.moneysavingexpert.com/discussion/comment/82046932#Comment_82046932

It seems like prices in all regions are set as if the power has to travel down to London first, before travelling back to the end user. I'm sure that's a simplistic view, but why else would you shut off Scottish generation, then charge premium prices for consumption in Scotland.

Never mind long distance N/S transmission links, is there a shortage of transmission capacity between generation and local consumption? Would it even be transmission since SSEN is the DNO as well?

JKenH

https://forums.moneysavingexpert.com/discussion/comment/82047046#Comment_82047046

That’s really the question I was asking. Why was the Agile price so high in Scotland if wind was being curtailed - surely it should have been lower to encourage consumption?

Over the last couple of nights prices in the Balancing Mechanism hit their caps of £360/MWh (36p/kWh) for gas generation and £4000/MWh (£4/kwh) for batteries but the spot market prices were set by inter connectors. I don’t know if that is unusual but it seems odd to me that the BM gas price was lower than the spot price. For comparison, I believe the highest day ahead price accepted for gas generation this year was £182/MWh (18.2p/kWh wholesale) set in January and the highest spot price for gas was £268/MWh (26.8p/kWh wholesale) - capped - set this week.

I think the last couple of days have shown that the electricity market in the UK is still adjusting to the new reality of a very different supply mix from a decade ago and volatility and unusual price spikes as we see on Agile will continue. I wonder also if OFGEM’s price cap is still fit for purpose.

QrizB

That’s really the question I was asking. Why was the Agile price so high in Scotland if wind was being curtailed - surely it should have been lower to encourage consumption?

I suspect it's because the UK doesn't really have regional energy pricing. There are differing fixed costs (which is why tariffs vary by region) but wholesale prices are national, not regional.

There was some discussion of regional wholesale pricing last year (Greg Octopus was a fan of the idea), but even the most enthusiastic people could only suggest it would move the average price of power by 0.5p/kWh and I think it was dropped as being more trouble than it was worth.

JKenH

https://forums.moneysavingexpert.com/discussion/comment/82047206#Comment_82047206

But there are regional variations on Agile. At the same time as Northern Scotland was paying 92.5p, in my area (Yorkshire) it was 76.5p.

Scot_39

https://forums.moneysavingexpert.com/discussion/comment/82047046#Comment_82047046

Scotland has an excess renewables generating capacity - on windy days - but also in some respect more exposed to renewables failures - when not windy.

So in theory it could get lower prices - under a regional pricing model at times - but it also has delivery issues of its own - and its network costs high because of rural distribution and terrain / distance to own Markets .

With c70% in central belt - a new farm landing say at Thurso needs grid capacity over nearly 300m if it was to serve Glasgow.

Seagreen 1.07GW off Arbroath operates at 70% constraint / curtailment regularly since connected in 2024. Close to Dundee only 70m by land to Aberdeen or Edindburgh say, less by sea if went hvdc, but still in curtailment.

So even in Scotland curtailment a thing - although a lot more onshore wind capacity available distributed around - to deliver power when windy.

And yes tge plan is to move a lot more of that South eventually - wgl already operates Ayrshire to N Wales, existing 4GW authorided egl1/2 sources near Torness / Peterhead c2029 - proposed 4GW egl3/4 Peterhead/Kinghorn (Fife)? - c2033 - maybe earlier as Ofgem on record as looking to advance. But that only works if windy.

And I suspect its the reliance on local wind driving the high prices looking at wind stats in late evenings and overnight in last few days.

Wind speed has been dropping to near 0 in places from suppertime highs in low teens at best - Aberdeen for instance sub 5, often 0 from 8pm to 12 noon tues to wed and again albeit dipping later overnight Wed, whereas Glasgow (waetherstation in renfrewshire hills to SW iirc) hit a low of 2mph at 9pm on Wed night.

No wind, no wind power - Scotland has to find power from other sources like gas/nuclear (whilst Torness still generating, another c1,2GW loss of core dependable generation by 2030) or PHS - or elsewhere - England or Norway interconnect etc.

So likely no OR little local wind generation forecast in certain areas driving day or is it day ahead 1/2 hrly pricing at such times - for agile uses (people talk of forecasts in agile thread).

Renewables lows drive the need for parallel power plant - gas, nuclear (not option in Scotland).

With a renewables total c45GW wind and grid solar delivering just 0.25-0.3GW in 1/2hrly slots last Jan - 99% of demand had to be met by traditional generation capacity and increasingly expensive imports. Some of it at high CMS and likely even higher short notice spin up demand rates - adding to wholesale averages (CMS plans alone saw another £18 added to cap at tdcv - another 0.7p on electric unit rates to add to many other adders - thanks to "cheap renewables" ).

The UK is now dangerously low on energy when renewables fails - we had another NESO grid demand notice issued this week. Luckily not triggered - but only because paid around £1400 / MWh - around 15x normal rates - on EU interconnects to fill gap.

I remember decades ago when businesses were regularly shutting down at peak demand - steel mills droppings 10s MW - enough to help cover domestic demand.

Decades of prioritising wind whilst mismanaging decline of fossil and nuclear generation capacity to cope in its absence - looks like increasingly coming home to roost.

QrizB

But there are regional variations on Agile.

Yes, but they're set by Octopus and baked into the formula. The wholesale price of electricity is the same everywhere.

If Octopus had unilaterally decided to slash the price of Agile in Scotland to boost demand, they'd still have been paying the full wholesale price for the electricity they were selling for less-than-cost.

Edit to add: the Agile pricing formulae are here:

https://octopus.energy/blog/agile-pricing-explained/#pricing

At the same time as Northern Scotland was paying 92.5p, in my area (Yorkshire) it was 76.5p.

Northern Scotland is priced at 2.4x the wholesale price +12p, all plus VAT. Yorkshire is priced at 2x the wholesale price +13p, all plus VAT. You then deduct 3.5p/kWh from both thanks to the Government's re-jigging of the fixed costs earlier this year.

We can use this handy tool to back-calculate the wholesale price to have been ~£380/MWh, 38p/kWh.

Octopus will have been paying 38p/kWh plus fixed costs during that half-hour. Call it 50p/kWh. If they'd encouraged folk in Scotland to use more by pricing Agile lower, or negative, they'd have had to make up the difference themselves.

michaels

https://forums.moneysavingexpert.com/discussion/comment/82047305#Comment_82047305

When we had more manufacturing/industrials/chemical there was more scope to drop this demand if needed. The 'replacement' industry of data centres is by contrast 'essential demand' as it powers things like NHS IT that can't be switched off. This adds a big chunk extra essential demand whilst we have much less of the interruptible sort. So it is not just a supply side problem but also demand changes conspiring to make things more difficult to manage.

molerat

Energy debt reaches record £4.79bn, an increase of 5% on last quarter.

https://uk.finance.yahoo.com/news/energy-debt-reaches-record-4-141647843.html

Average debt among those who have an arrangement to repay it has increased by 4% for electricity – to £828 – and by 4% for gas – to £679. Average arrears for those without a repayment plan hit almost twice this at £1,876 for electricity and £1,623 for gas.

Scot_39

The Ofgem charts - giving further insights here

https://www.ofgem.gov.uk/data/debt-and-arrears-indicators

The frightening thing is the continued growth in numbers of households impacted

There has been a lot of media focus on debt now totals in the £bns.

But look at the "Number of accounts in arrears where there is no arrangement to repay the debt" - on that Ofgem link - the one approaching 1.2m for electric (my guess is that any on duel fuel - might appear for both fuels) its rate has been ramping up pretty steadily since 2017 - before Ukraine - before Iran. (Beware the two # household graphs on different time base)

Look at the even longer chart for those in debt repayment plans - it goes back 20 years - when the peak on electric in 2007 - on that chart (before the 08 banking crisis ?) - around 1.35m homes - c0.5m more homes on plans than now.

Its a bit subjective choice admittedly - but looking at just the arrears trend - although crisis like Ukraine may have added - arguably the modern crisis is longer term. With the trends arguably ramping up progressively since 2017.

Look at total across the two measures (those in arrears and those on repayment plans) - you might say around 100,000 homes per year adding to total.

Probably many more if assume people do finish their repayments during that period (the average DRP length isn't that high at some suppliers so presumably many come off the plans and others transition into DRPs from arrears) - around 2 million total now - 1.1m 9 years ago in say Q1 2017.

[Interestingly it dipped post Ukraine peak (my initial thoughts were maybe some of the big one off debt right off schemes put in place by suppliers post Ukraine - Id be interested to hear an energy debt experts proper explanation.]

My gut feeling for many years is that with energy bills we have simply gone to far - under successive govts - too much social policy - too much net zero policy on electricity - added direct to bills - without looking seriously at genuine real world affordability in poorer households.

The odd £1 pm here - recent nuclear, the odd £2 pm recent WHD extension and recalc - there - soon ballooned into a policy cost of £236 + 5% vat if rated - so call it c£250 by Jan 2026. Before a really strange thing happened - the Apr budget measures dropped back to £106.

A cost line that at £236 had increased c50% in previous 2 years - far more than inflation or benefits or average wages - under both current govt itself and past govt.

Sadly the govt (Ofgem) then took nearly 2/3rds of that £130 ex vat bill (not actual if your a tax payer) saving away - by adding another £66 ex VAT to network costs - and £17 ex VAT to CMS costs in wholesale line.

Its not too difficult to see £150+ of extras - over and above budget moves - new extras or upwardly revised prices of existing schemes - on our bills.

All being added as many were accumulating those sort of average debts mentioned - from just reviewing Ofgem cap summary letters - sent out with every cap - but seldom commented on seriously in mainstream media.

But until Reeves budget - things like the treasury £92 for 75% RO (£122 total RO - £30 remains on ave bill) +£62 ECO - less easy to find.

Take those - say £250 conservatively at cap level - that have existed medium to long term away from those average arrears or debt levels

If for even just a few years and even at below cap consumption - the costs were never on their bills in the first place.

Sadly when comes to net zero - particularly electric bills - making the most expensive heating even more expensive

And you might want to ask a now arguably a hypothetical question -

What the debt levels for those c2m households might have been - how much lower - or even if they would exist at all - without all those add-ons to bills ?

And think about doing more to remove all the other extras - still remaining - and to be added in future. Hopefully by ending costs - not just shuffling them onto tax pool.

To help those already in trouble - in those stats - and those - potentially c100,000+ per year likely to join them in coming years.

And remember even before Ofgem launches more debt relief schemes - debt costs us all - with £50+vat when last mentioned in cap letters. And that before the latest increases in overall debt levels.