Why is energy charged differently across the country?

monkeyboy1074

I have just received an email from EDF detailing my future energy charges. Does anyone  know why different regions of the country are charged different standing charges and different unit prices?

[Deleted User]

Because it costs a different amount to supply energy into different regions of the country.

Tesla6518

SparkyGrad. brief and unclear of why there are regional differences. I find it hard to understand even being a
degree electrical engineer. throughout the UK we have several generating units, be it fossil, nuclear or renewable energy these all connect one way or another into the national grid  for redistribution. One would think that a standard charge would be payable to the national grid for repairs etc to this system. The end user energy companies may or may not have investment in these generating units, but do not own the distribution cables. they are merely tax collectors for the standing charge. So why the differences in charges across the UK?

Ultrasonic

I'm not an electrical engineer* but it seems fairly obvious to me that the cost per household of delivering energy will be cheaper where lots of people live close together (e.g. London) compared to fewer households living further apart (e.g. the South West).

*I'm a physicist FWIW.

Ectophile

One would think that a standard charge would be payable to the national grid for repairs etc to this system.

There's your problem.

Back when I was young, we had regional gas boards and electricity boards.  The prices they charged included not just the price of the energy, but also the cost of maintaining the infrastructure.  Dense urban areas are cheaper to supply to that sparsely pupulated rural areas.  So the price reflected the population density over that board's region.

Those gas and electricity boards are long gone, but the price for delivering energy is still calculated on a regional basis, and added to the charges for electricity and gas.

[Deleted User]

Tesla6518 said:

SparkyGrad. brief and unclear of why there are regional differences. I find it hard to understand even being a
degree electrical engineer. throughout the UK we have several generating units, be it fossil, nuclear or renewable energy these all connect one way or another into the national grid  for redistribution. One would think that a standard charge would be payable to the national grid for repairs etc to this system. The end user energy companies may or may not have investment in these generating units, but do not own the distribution cables. they are merely tax collectors for the standing charge. So why the differences in charges across the UK?

Being an ex electricity network engineer, it is a precise and accurate summation of the reason.

Every one of the assumptions you are making is incorrect.

 Generators cost different amounts to connect in different parts of the country. Building, maintaining and upgrading the network costs different amount in different parts if the country. There are different amounts of people in different parts of the country, so policy costs are different. There are different effective wholesale prices in different parts of the country due to the proximity or distance to different generators or transmission links.  There are different areas of congestion in different parts is the country which cost different amounts to resolve.

70sbudgie

The equipment that is the electricity network in the UK is split into different parts - the transmission network and the distribution network. It all operates under license from OFGEM. There are 14 distribution license areas (the DNOs). In most cases, companies operates several license areas. The transmission company and the distribution companies charge the suppliers for sending electricity along the wires / cables etc. How much each DNO (and National Grid) charges is agreed with OFGEM on a regular basis and this is called the price control period. The next price control period starts on the 1 April 2023 and will be for 5 years (so it currently being negotiated). As each DNO has a different combination of the different types of equipment, it costs them different amounts to operate and maintain their networks and therefore they charge different amounts to the suppliers. As far as I am aware, that is where the regional price variances come from, though it is possible that the transmission network also has regional variations in its charges.

Glum

Worth mentioning that some of the standing charge is being used to claw back cash to cover the failed providers but I don't know if this varies by region.

[Deleted User]

I don’t have the spreadsheet at hand to check, but I think it was the same everywhere.

Chrysalis

My thoughts in the duplicate thread here.

https://forums.moneysavingexpert.com/discussion/6391250/regional-variations-in-pricing#latest

Ultrasonic

Glum said:

Worth mentioning that some of the standing charge is being used to claw back cash to cover the failed providers but I don't know if this varies by region.

I don't think this does vary with region. Or at least I've never seen it said that it does and I'm struggling to think of a logical reason why it should.