Electricity costs going up but why is SEG staying so low?

Thrugelmir

2nd_time_buyer said:

Cranberryberry said:

2nd_time_buyer said:

People are generally exporting such small amounts at this time of year. It makes very little difference. So they may not feel the need.

I am hoping come the summer, and a taming down of the energy market. It will start to function more as a competitive market.

It's a small proportion of a big number though - there's around 3220 MW of small solar installed in the UK, so even December production will mean some export surely? 

I too hope a market may appear at some point...

Over the next few years we are going to be very reliant on gas and then increasingly on the amount of puff in the wind.

Some days the wind doesn't blow. A back up is essential. Likely to be nuclear. 

2nd_time_buyer

Verdigris said:

As solar is already generating energy at useful times, it seems a bit daft to store it for slightly more peak times

Many homes are empty during the day. Solar's great for old gimmers, like me, who can use it as it is generating but a working family with kids at school will want more power in the evenings and early morning.

That is partly my point. Solar during the day is not useful for everyone all of the time but nationally it is useful throughout the day (particularly when there is not much wind).

The market should appreciate that and pay you close to the import rate for exporting. Octopus are doing this with their Agile export. Which today for instance has been paying me around 20p per kWh.

Verdigris

Some days the wind doesn't blow. A back up is essential. Likely to be nuclear.

Nuclear is only really useful for constant base-load. You can't modulate it to demand, as you can with gas, without creating maintenance and fuel consumption problems.

What we need is a lot more storage to both absorb surplus nuclear and renewable energy to "fill in the gaps" when the wind and sun aren't co-operating.

QrizB

2nd_time_buyer said:

The market should appreciate that and pay you close to the import rate for exporting. Octopus are doing this with their Agile export. Which today for instance has been paying me around 20p per kWh.

That is how it works in some US states; it's known as net metering.

There was a decision taken by the UK Govt more than a decade ago that net metering wasn't for the UK. Instead they chose FITs and, more recently, SEG (for large-scale it was ROO then CfD). I can't imagine them changing tack now.

2nd_time_buyer

Thrugelmir said:

2nd_time_buyer said:

Cranberryberry said:

2nd_time_buyer said:

People are generally exporting such small amounts at this time of year. It makes very little difference. So they may not feel the need.

I am hoping come the summer, and a taming down of the energy market. It will start to function more as a competitive market.

It's a small proportion of a big number though - there's around 3220 MW of small solar installed in the UK, so even December production will mean some export surely? 

I too hope a market may appear at some point...

Over the next few years we are going to be very reliant on gas and then increasingly on the amount of puff in the wind.

Some days the wind doesn't blow. A back up is essential. Likely to be nuclear. 

Yes, I expect nuclear will play a large role. For the UK, to an increasingly large extent, it will be indirectly through interconnects to France and the rest of Europe. There are interconnects going in to Scandinavia too where they have a lot of hydroelectric. There are also interconnects planned between the UK and Morocco to export their solar.

So whilst batteries are certain to be essential, tapping into a global network of renewables will help to smooth the generation.

Martyn1981

2nd_time_buyer said:

Thrugelmir said:

2nd_time_buyer said:

Cranberryberry said:

2nd_time_buyer said:

People are generally exporting such small amounts at this time of year. It makes very little difference. So they may not feel the need.

I am hoping come the summer, and a taming down of the energy market. It will start to function more as a competitive market.

It's a small proportion of a big number though - there's around 3220 MW of small solar installed in the UK, so even December production will mean some export surely? 

I too hope a market may appear at some point...

Over the next few years we are going to be very reliant on gas and then increasingly on the amount of puff in the wind.

Some days the wind doesn't blow. A back up is essential. Likely to be nuclear. 

Yes, I expect nuclear will play a large role. For the UK, to an increasingly large extent, it will be indirectly through interconnects to France and the rest of Europe. There are interconnects going in to Scandinavia too where they have a lot of hydroelectric. There are also interconnects planned between the UK and Morocco to export their solar.

So whilst batteries are certain to be essential, tapping into a global network of renewables will help to smooth the generation.

Yep, interconnects are really important to us. The link to Norway went live last year, in fact new interconnectors lifted the UK total from 5GW to 7.4GW in 2021, and we are on course for ~17GW by 2025.

Not sure how much of that will be French nuclear though, since its generation has been sliding slowly down for more than a decade now, and the cost of new builds are so high that they've opted for an expensive programme to extend current reactors, that are starting to age out, by another 10-20yrs, to slow the decline. Also France is a net importer of leccy from Germany, especially during the winter when demand is higher.

France was aiming to move to 50% nuclear by 2035 (currently about 75%, peaked at 90% in 2005) by expanding RE, but dates and plans keep changing. This article suggests that leccy costs would be reduced if they moved away from nuclear even faster.

I love the Morocco idea, especially the fact that their onshore wind has such a high capacity factor, enabling the combination of wind, solar and storage to virtually guarantee supply to the UK. But, I suspect the enormous costs of the HVDC sea cables will push up the price and make it less attractive ..... but fingers crossed it is economically viable, as that would massively reinforce the potential for a UK high RE penetration.

2nd_time_buyer

Martyn1981 said:

2nd_time_buyer said:

Thrugelmir said:

2nd_time_buyer said:

Cranberryberry said:

2nd_time_buyer said:

People are generally exporting such small amounts at this time of year. It makes very little difference. So they may not feel the need.

I am hoping come the summer, and a taming down of the energy market. It will start to function more as a competitive market.

It's a small proportion of a big number though - there's around 3220 MW of small solar installed in the UK, so even December production will mean some export surely? 

I too hope a market may appear at some point...

Over the next few years we are going to be very reliant on gas and then increasingly on the amount of puff in the wind.

Some days the wind doesn't blow. A back up is essential. Likely to be nuclear. 

Yes, I expect nuclear will play a large role. For the UK, to an increasingly large extent, it will be indirectly through interconnects to France and the rest of Europe. There are interconnects going in to Scandinavia too where they have a lot of hydroelectric. There are also interconnects planned between the UK and Morocco to export their solar.

So whilst batteries are certain to be essential, tapping into a global network of renewables will help to smooth the generation.

Yep, interconnects are really important to us. The link to Norway went live last year, in fact new interconnectors lifted the UK total from 5GW to 7.4GW in 2021, and we are on course for ~17GW by 2025.

Not sure how much of that will be French nuclear though, since its generation has been sliding slowly down for more than a decade now, and the cost of new builds are so high that they've opted for an expensive programme to extend current reactors, that are starting to age out, by another 10-20yrs, to slow the decline. Also France is a net importer of leccy from Germany, especially during the winter when demand is higher.

France was aiming to move to 50% nuclear by 2035 (currently about 75%, peaked at 90% in 2005) by expanding RE, but dates and plans keep changing. This article suggests that leccy costs would be reduced if they moved away from nuclear even faster.

I love the Morocco idea, especially the fact that their onshore wind has such a high capacity factor, enabling the combination of wind, solar and storage to virtually guarantee supply to the UK. But, I suspect the enormous costs of the HVDC sea cables will push up the price and make it less attractive ..... but fingers crossed it is economically viable, as that would massively reinforce the potential for a UK high RE penetration.

Excellent insights. Thanks

Screwdriva

The true reason is the lack of regulation enforcing a competitive rate. Even at 50% of current import prices, SEG would prove beneficial for solar export. It's clear that utility companies are exploiting the lack of regulation or government intervention.

JKenH

While domestically generated solar is useful to the individual householder, its commercial value to me seems limited - unless of course it is linked to storage. As has already been pointed out peak output is in the 4-6 hours either side of midday in summer when there is so darn much of the stuff that it is worth very little. If we massively expand solar generation (without commensurate storage) we will find ourselves in the situation we were in in the summer of 2020 with negative pricing because as a nation we can’t match our consumption tothe pattern of solar generation. In somewhere like California or Australia, solar makes much more sense as when the sun gets up so do temperatures and consequently demand for aircon increases. 

As a householder with solar, I, like many others, make sure I consume as much of my generation as possible, heating water and charging my car (and if I had one charging up a domestic battery). My next door neighbours or indeed any without their own solar won’t give a fig about matching their consumption to solar generation. Until we have widespread adoption of half hourly TOU pricing for domestic and business customers we just can’t use the solar generation effectively so much of the time the solar generation is actually a nuisance to the electricity generation and distribution industry, hence the negative pricing we see. 

As far as flexible export pricing of home generated solar is concerned, just look at it from the point of view that if on the days I don’t want/can’t use all the solar I am generating then what is it likely to be worth to somebody else? With a million other households in a similar position and dozens of solar farms all maxing out their generation at the same time as I am then it’s going to be very little. If somehow one can mange to export solar between 4pm and 7pm on a winter’s day then it will be worth a king’s ransom.  One will have to accept though if you want high rewards you have to carry the risk that at times (such as midday in high summer) you will be causing the grid a problem and have to accept part of the cost of dealing with that. Perhaps the SEG providers are making a few pence out of you at the moment but bear in mind that in summer it might be costing them money to deal with your excess generation.

As has been suggested, if you want a flexible export payment then Octopus Agile will give you that without the risk of negative  pricing.

As far as inter connectors are concerned they do make a lot of sense, in theory, and are a useful price balancing mechanism (which is actually the purpose of the European inter connector network). As a means of stabilising supply, I am less keen as although they work when times are good there may be times when other political or economic pressures mean that supply either just isn’t there or one is paying top dollar because demand elsewhere exceeds supply. The situation is akin to the mess we find ourselves in with gas. We decided we didn’t need our own gas storage so shut down the Rough facility and now we are dependent on imports at the same time as Russia is playing politics over the pipelines that supply Europe and Asia has a massive demand for LNG. Internally Norway is facing political pressure to use its hydro for its own consumption rather than keeping electricity prices low in Northern Europe. France has threatened to cut off electricity supplies to the Channel Islands.

I’ve said it before and I’ll say it again; a government’s first priority should be security - in this case security of energy supply. It is often politically expedient in the short term for governments to forget that but it will come back and bite them. 

Cranberryberry

JKenH said:

Until we have widespread adoption of half hourly TOU pricing for domestic and business customers we just can’t use the solar generation effectively so much of the time the solar generation is actually a nuisance to the electricity generation and distribution industry, hence the negative pricing we see. 

If this is the case, and I’m sure it is, why aren’t batteries more strongly pushed by energy companies? Especially if they are supplier-managed and shift excess to peak ‘in the background’ for a cheaper rate?

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As has been suggested, if you want a flexible export payment then Octopus Agile will give you that without the risk of negative  pricing.

Agile outgoing is very attractive but sadly incompatible with Octopus Go, which I use with my EVs. 

JKenH said:

I’ve said it before and I’ll say it again; a government’s first priority should be security - in this case security of energy supply. It is often politically expedient in the short term for governments to forget that but it will come back and bite them. 

I agree 100% and am shocked that the Tories who have been so keen on independence and security in other areas don’t get that energy security is an achievable goal for the UK.