Why is no one asking "Who sets the prices?"

GingerTim

According to this https://www.globalpetrolprices.com/electricity_prices/ (change the drop down to sterling) as of June 2022 the UK is among the most expensive, but behind the Netherlands, Germany, and Denmark on cost per kwh, and with many other European nations closing in fast as the situation bites for them, too.

Statistics for gas are only available up to December 2021.

Evan3020

Energy has to be paid for, you want someone else to pay for your usage i get that but in the end everyone does pay the market price one way or another.

Section62

wittynamegoeshere said:

I'd like journalists to start putting together charts of how much people are paying per kWh in all developed countries, let's see where we rank.

My suspicion is that most countries are not seeing bills more than treble in a year.  We're being fleeced, and the likes of the BBC seem to be part of the operation to distract from this by talking only about subsidies.

It would be the same as most of the simplistic and misleading charts they produce, unless there was in-depth analysis of all the other factors such as what is included in the kWh price in different countries, taxation (in general), and household incomes.

For example, Macron's policy in France is to directly subsidise energy prices through general taxation.  You therefore can't meaningfully compare the French kWh price to other 'developed' countries without allowing for the subsidy via taxation.

Similarly, different 'developed' countries have different average household incomes and therefore cheaper or more expensive kWh prices may represent very different levels of affordability.

Simplistic charts would of course enable the journalists to convey whatever story they want to convey - including the narrative we are being 'fleeced', through to plots by shapeshifting lizards to control populations by manipulation of energy prices.

sevenhills

Seajays said:

I know "energy" is traded in an open market , but somewhere someone/something must set prices for energy, my question is how does that happen?

to set those prices in the first place?  Why has the "market" seemingly failed

No one sets the price for butter, beans or electricity. There is a maximum price for electricity set by OFGEM.

spot1034

wittynamegoeshere said:

Thanks for that.   We're definitely in the top bunch, but look at the differences - there are some very major countries paying a fraction of our prices.  It's no wonder we can't compete and end up importing everything.

Even the supposed "free market" USA is paying less than half of our price.

That's because the USA hasn't let the green lobby take over its energy policy. It has been able to exploit its own resources to make sure it has the energy it needs. If only Europe had done the same.

superbigal

On a lesser scale it is quite annoying the Electricity prices in Scotland.   For years (Before Green Levies) we paid extra subsidies in the early years of Hydro electricity generating and then onto Wind & wave power.   Now Scotland is quite self sufficient and has virtually no need for gas to produce Electricity. Most countries (Including England) still have a huge reliance on Gas to produce Electricity.

gazapc

superbigal said:

On a lesser scale it is quite annoying the Electricity prices in Scotland.   For years (Before Green Levies) we paid extra subsidies in the early years of Hydro electricity generating and then onto Wind & wave power.   Now Scotland is quite self sufficient and has virtually no need for gas to produce Electricity. Most countries (Including England) still have a huge reliance on Gas to produce Electricity.

The wind subsidies are paid for by not just Scotland, so Scotland is benefiting from English and Welsh consumers contributing to the subsidies.

Scotland on average produces enough renewables to cover demand BUT there are times when supply far exceeds demand (power sold down south), and times (the more critical ones) when demand exceeds supply and power is shipped north. Scotland would only have 'virtually no need for gas to produce electricity' if it was happy to accept power cuts at times of low wind.

MattMattMattUK

wittynamegoeshere said:

I'd like journalists to start putting together charts of how much people are paying per kWh in all developed countries, let's see where we rank.

There used to be full stats for EU countries, but we are no longer included in them for some reason... USA has always had cheaper energy. There are some stats available. For electricity in 2021 we were 8th most expensive, Germany was top with rates around 45% higher than ours. For gas we were one of the cheapest, with our gas costs slightly more than half the EU average an only four other countries cheaper.

With the current price rises Germany is still the most expensive by some way, from trying to look at data which is not nearly as coherent it would appear that Germany, Denmark, Belgium, Ireland, Spain, Sweden, and Italy have electricity more expensive than us. As far as major/Western economies in the USA the price is around 11p per kWh and will probably hit around 15p per kWh by the end of the year, France is around 16p, Australia is around 35p and Germany is 45p (with gas at 18p per kWh) and all apart from France are expecting costs to rise significantly in the next few months.

wittynamegoeshere said:

My suspicion is that most countries are not seeing bills more than treble in a year. 

The electricity bills German's pay are expected to increase 216% over the course of 2022, in Belgium 234%, Gas costs most European countries have roughly doubled, varying from 84% increase to 120% increases deepening on the country and with most planning further rises ahead of winter. 

wittynamegoeshere said:

We're being fleeced, and the likes of the BBC seem to be part of the operation to distract from this by talking only about subsidies.

We have issues with the way our energy is provided, lack of gas storage being a fairly major one that even the reopening of Rough will only mitigate in a small way which contributes to volatility. Most of Europe is putting gas into storage at the moment, Poland for example has four months of gas supply stored (just over 35% of it's annual consumption), the UK has four days supply and that is our maximum storage capacity, a little over 1% of our annual consumption so despite the current issues the UK has been exporting gas for almost all of this year. Most other EU countries have storage for 20-30% of their total annual usage. 

We are not "being fleeced", but we have no state owned energy production and pretty much no storage. Countries in the EU/EEA that have cheaper energy than us have it because they have either large state owned electricity generation capacity or they subsidise energy from general taxation. The USA and Canada have cheaper energy because of large domestic production and being net exporters, as well as lower tax. Australia's is similarly cheap because of large domestic reserves and extraction of fossil fuels. UK energy costs are actually fair when looking at input costs. One can argue that there might be a need for subsidy from taxation, but that does not mean we are being fleeced.

MattMattMattUK

wittynamegoeshere said:

Thanks for that.   We're definitely in the top bunch, but look at the differences - there are some very major countries paying a fraction of our prices.

Some are paying a fraction, almost all of those have huge domestic production, or subsidy from taxation.

wittynamegoeshere said:

It's no wonder we can't compete and end up importing everything.

We have much bigger problems that energy, UK manufacturing is incredibly inefficient, our tax system discourages investment in "factory" style operations, we have a very inefficient workforce, on top of that a strong pound for many years impacted our ability to export and more recently we had the Brexit vote which made the UK very unattractive for inward invesment.

wittynamegoeshere said:

Even the supposed "free market" USA is paying less than half of our price.

The USA having huge domestic production, not having the ability to export much more than it already did and government investment and incentives in fossil fuels for decades is the major reason their energy is cheaper. 

jimjames

Seajays said:

I don't know how the wholesale energy market works, and I haven't managed to see any clear description of how it works.  I know "energy" is traded in an open market , but somewhere someone/something must set prices for energy, my question is how does that happen?

No different for energy to any other product. Supply less than demand will increase prices. Look how much people were prepared to pay for toilet rolls. Exactly the same thing.