Why are electricity prices linked to gas prices?

smileguy

So the tax payer subsidies towards the cost of nuclear and green energy we buy100% green energy yet they sell it to us at a hiked price because of rising fossil fuel prices 🤷‍♂️. What is @ ofgem going to do about what seems to be the customer getting ripped off ?.

PennineAcute

smileguy said:

So the tax payer subsidies towards the cost of nuclear and green energy we buy100% green energy yet they sell it to us at a hiked price because of rising fossil fuel prices 🤷‍♂️. What is @ ofgem going to do about what seems to be the customer getting ripped off ?.

What have Ofgem got to do with the wholesale price of energy?  The UK cannot change how the whoesale price of energy is calculated.

The only ones rubbing their hands with glee are the gas companies who are extracting the gas from deep below.

smileguy

Isn’t @ofgems job to help control the energy prices  for the consumers?.When tax payers are subsidising green energy including nuclear and we are being sold 100 percent green energy yet gas prices rise and the companies increase our green energy @Ofgem should step in and sort the mess out .

QrizB

smileguy said:

Isn’t ofgems job to help control the energy prices  for the consumers?

No.

When tax payers are subsidising green energy including nuclear and we are being sold 100 percent green energy yet gas prices rise and the companies increase our green energy

Your 100% green energy is a fib. It's generated by burning gas, just like everyone else's. The greenest energy companies - Ecotricity, Good Energy and Green Energy UK - are exempt from the price cap. You should check their tariffs out.

smileguy said:

Ofgem should step in and sort the mess out .

What exactly do you expect Ofgem to do to make the US, UAE and Russia sell their gas to us at a lower price?

PennineAcute

smileguy said:

Isn’t @ofgems job to help control the energy prices  for the consumers?.When tax payers are subsidising green energy including nuclear and we are being sold 100 percent green energy yet gas prices rise and the companies increase our green energy @Ofgem should step in and sort the mess out .

Ofgem can set a maximum price (per a set number of gas and electricity kWH) for a variable tariff rate.  However, with the odd exception, all fixed tariffs are higher than the current variable tariffs. 

When someone has a tariff that has "100% green energy" it does not mean the the energy you are using this instant is green energy.   If you use 3000 kWh of electricty on a 100% green tariff, all this means is that your supplier has purchased 3000 kWh of green energy to put back into the network at some point.

The wholesale price of a kWh of green electricity is the same as a kWh of non-green electricity.  There are not two prices.  This is not the UK's fault and there is nothing that the UK can do about it.  Supply and demand.  When there is less availabilty of something (which there is with gas at the moment) and the same amount of people want it, the price goes up.  When there is more than enough of something (with plenty left over) the price goes down.

The UK Government (along with others) have said we need to do something to reduce CO2 emissions.  As gas is not a green source of energy, they have decided that "green" energy is the way to go.  The more green energy used, the less CO2 emissions.  Sounds great in theory.  But, as we have found out, when the cost of green and non-green energy is the same, it does not always mean it has a cheap wholesale price, even with every household contributing to a greener society.

[Deleted User]

smileguy said:

Isn’t @ofgems job to help control the energy prices  for the consumers?.When tax payers are subsidising green energy including nuclear and we are being sold 100 percent green energy yet gas prices rise and the companies increase our green energy @Ofgem should step in and sort the mess out .

If only that were true. Do a search for REGOs and Greenwashing of energy. There are only three UK suppliers that buy all their energy from renewable sources. Their tariffs are not subject to the Ofgem Cap.

A starter for your reading list:

https://www.goodenergy.co.uk/business/blog/regos-sorting-fact-from-fiction

mumf

[Deleted User] said:

markin said:

They all sell at the market rate to make as much profit as they can, the most expensive right now is Gas so that is setting the price.

True. This is what Octopus has to say about the current pricing model:

Quote: 

One question we get quite a lot: why would a supplier who sells 100% green tariffs be impacted by high fossil fuels prices?

Green electricity now costs less to generate than fossil fuel power. So shouldn't that mean green power costs less to buy on the market? Because of the (very flawed) way the market is currently set up, sadly not, though as the grid gets greener, this should change. The price power sells for is dictated by the going rate for all different types of energy. At the moment, all energy sources in the UK, from wind to solar to fossil fuels, are being sold based on the high price of gas imports – the higher price of 'brown' electrons artificially putting up the price of 'green' ones as well.

🏠 It’s like selling a house; the price is set by what neighbouring homes are sold for, not the actual cost of building the house. Unquote

And of course,when you sign up for ‘100% green energy’, the company doesn’t fix you up with a separate ‘green’ electricity cable to your house. They buy the power from where they can- especially when the wind doesn’t blow,and the sun don’t shine - which happens a LOT in Winter,especially when we need the energy.So fossils have to pick up the energy gap. As the grid gets’greener’,and fossil fuels are dispensed with / deplete ,theUK can expect rolling power cuts during Winter,as the wind doesn’t blow when there are high pressure,cold weather systems over us. 

That’s why so - called green energy is linked to gas supply and prices.

Uxb1

Well said @mumf
The easy fossil supplies have been extracted: now its the difficult ones and the expensive ones to get hold of and in the case of the Canadian tar sands deposits the environmentally catastrophic ones.
The N.Sea started to wind down in around year 2000.

As you say a winter's high pressure zone over the UK with freezing fog all day mean no solar and no wind when our energy needs are the highest:  We are not Norway with huge hydro electric resources or Iceland with huge geothermal supplies.  Our different geology means fracking is unlikely to be the success it was in the USA.  The sole large tidal barrage scheme in France led to silting up of the estuary and another environmental mess.

We should have been building replacement nuclear stations for our aging AGR units 20 years ago but all we got was a 10 year planning dispute over sizewell B.  That woudl have kept us going for 30+ years more until maybe at long last fusion might come good.

Possibly if we are desperate enough and sod the environment we could re-open the coal mines and start again on producing town gas from them as well as for power generation.  There is about 50 years of coal supplies probably left.  The is also a large coal field under Oxfordshire. Problem is that it is a long way down and in thin seams so it with current technology not accessible.

Finally as supplies dwindle worldwide countries with them will realise that keeping them for themselves in the future is far more valuable than extracting them and selling them to others for their worthless foreign currency.

mongoose2009

the whole green scam is being exposed as they wish to replace something that works 100% of the time

with unreliable intermittent wind and solar

but its all feelings based

and nobody in the industry would say sorry we cant do that with current tech and they will never be 100% reliable

and we have no means of mass storage

so were gonna have the madness of duplication

at massive cost

and eventually brown and blackouts  

QrizB

mongoose2009 said:

... and eventually brown and blackouts  

On the plus side, if the power's off you'll be reducing your bill *and* your cabon footprint, so win-win.