Martin should campaign to fix the broken electricity pricing model

glynbristol

The real reason electricity prices are so high is because of the broken model for rewarding energy generators .

According to EDF, "the price you pay for your power is set by the marginal generation unit. By this we mean whatever type of power, from whatever source, met the peak demand". So what they are saying is that if I am a solar generator and am quite happy supplying energy to the grid at say 2p a unit, if there is a surge and gas comes on line for 4 hours at 20p a unit, I will get paid 20p a unit for my solar electricity provided during that period.. That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of gas in electricity generation may only be 15%. . (This also explains why those on a 100% renewals tariff, also pay the quadrupled price!!!!!)  So why doesn't the govt step in and change that formula. Can Martin campaign to get the govt to look at this broken pricing model? .

 

razord

The government (BEIS) are already well in the process of changing this, but it will take many more months to achieve due to all the regulation that needs to be drawn up to make it happen.

TheMilkmansDad

I think Martin already does way more than his fair share of campaigning! He's only one man (with a great team behind him), I think they have many things on the go at the moment, adding to that list may not be practical at this time.

casjen

No he shudnt.. it achieves nothing...

pochase

If they cannot sell in the UK for the price, they will sell it to other countries.

It is a free market, if a KWh electricity costs 20p, it does not matter how it is produced, that is the market price.

Why do you believe the government can force somebody to sell for 5p when they can get somewhere else 20p?

FreeBear

glynbristol said: That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of gas in electricity generation may only be 15%.

You need to research your statistics a bit better.

https://www.energydashboard.co.uk/live shows that as of *now, 45% of electricity is being produced by gas - Other sites are showing slightly different figures.

Section62

pochase said:

Why do you believe the government can force somebody to sell for 5p when they can get somewhere else 20p?

Or make more money with their plant on standby, or shut down and the land sold for redevelopment.

The time for Martin to have been campaigning was when our coal fired power stations were being demolished before they were life expired, with no clear plan how to fill the energy gap.

Boat missed.

onomatopoeia99

And let's face it, if the wholesale market described (which I've known about for 30 years but it seems like the rest of the country is just discovering) is "reformed" we'll end up with the situation where if supplier A can charge 5p/kWh while supplier B charges 50p, then everyone will try to buy from supplier A who will sell out, meaning the next day they put their prices up to 49.9p as they will still be cheaper but can make more money.

I'm intrigued as to what functional alternative the government will come up with.

ab1234567890abcdefgh

FreeBear said:

glynbristol said: That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of gas in electricity generation may only be 15%.

You need to research your statistics a bit better.

https://www.energydashboard.co.uk/live shows that as of *now, 45% of electricity is being produced by gas - Other sites are showing slightly different figures.

They were giving an example.  It's fairly clear from the way they worded it.

Either way, paying everyone the rate of the most costly generator needs to end, it makes no sense at all.

doodling

Hi,

ab1234567890abcdefgh said:

FreeBear said:

glynbristol said: That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of gas in electricity generation may only be 15%.

You need to research your statistics a bit better.

https://www.energydashboard.co.uk/live shows that as of *now, 45% of electricity is being produced by gas - Other sites are showing slightly different figures.

They were giving an example.  It's fairly clear from the way they worded it.

Either way, paying everyone the rate of the most costly generator needs to end, it makes no sense at all.

Why doesn't it - that is how much the electricity is worth - there is nowhere you can buy it cheaper.

Are you really proposing to pay renewable generators less than their electricity is worth?  That doesn't sound like a good way to encourage investment in other energy sources?

Chrysalis

doodling said:

Hi,

ab1234567890abcdefgh said:

FreeBear said:

glynbristol said: That is why the cost of electricity (from all sources)  quadruples when the price of gas quadruples, even though the mix of gas in electricity generation may only be 15%.

You need to research your statistics a bit better.

https://www.energydashboard.co.uk/live shows that as of *now, 45% of electricity is being produced by gas - Other sites are showing slightly different figures.

They were giving an example.  It's fairly clear from the way they worded it.

Either way, paying everyone the rate of the most costly generator needs to end, it makes no sense at all.

Why doesn't it - that is how much the electricity is worth - there is nowhere you can buy it cheaper.

Are you really proposing to pay renewable generators less than their electricity is worth?  That doesn't sound like a good way to encourage investment in other energy sources?

My thoughts on this are quite simple.  We shouldnt need to encourage private investors to invest in a supply of energy, instead we just invest ourselves as a state, so yes bring energy extraction to state ownership.  There would be a mandate where only excess energy that isnt needed by the UK can be sold off (exported).  Energy supplied for UK needs would be isolated from the open market and not affected by market costs.

I am not sure the private market is fixable, points have been made by others on here, we could remove this very strange pricing model, but the market would likely still end up with inflated prices with the trading that goes on.