Extending the EPG at its current level for the 3 months April-June 2023 - For or Against?

Scot_39

EssexHebridean said:

There are definitely some situations where almost the only option is to throw money at the problem and then work out how that can be funded, but once a situation has been ongoing for a while, it should be IMO that some forward planning has been happening simultaneously alongside the initial almost "knee jerk" support being given, and that should enable better more targeted help. In this instance for whatever reason this doesn't seem to be happening though. (For what it's worth, and where possible, that forward thinking should be happening at a consumer level as well as at a government one - it's a bit like not going out and signing up to a brand new expensive mobile phone deal when you have a strong feeling that your job might be at risk). 

Suspect the Cons govt thought they had done their radical bit in 2012 when introduced their Contract for Difference indexed capped pricing model for Hinkley C.

Replacing Labour's 2002 contract terms (effectively uncapped) due to grid bid system - a system not unique to UK.

The Cons might try to revise that - some in Europe priced more by actual mix rather than highest price etc.

But they failed to persuade old renewable suppliers to accept CfD like capped prices - so reverted to current windfall taxation.

The wider energy policy still iirc as revised in 2008 under New Labour.

New Hinkley should have been online by now - delayed by several years - environment, EU / Austria cost subsidy, cost, French sister plant  build problems, Covid delays etc.


Edits in ""

The 2015 renewables auctions and beyond priced on CfD.  "Very little actually on line - few GW maybe ( installed capacity - not actual generated.)"

Last 2 auctions sold another 17GW of renewables under CfD for connection 2023-5 and 2025-7.


"CfD rebates already" worth c£54pa in rebates to average bill according to latest Ofgem cap (up from £40 last quarter).

No one plans for a war in Europe after decades of peace.

matelodave

I couldn't understand a word of that 

Scot_39

Basically 3 points

1) There is major change already taking place in the UK domestic energy market .

The move from gas to electric.

And to improve price stability for electric, that electric, increasingly under new Cons govt Contract for Difference.

And its already influencing domestic prices. 
And the percentage of supply should already have been higher, sooner.
Hinkley project start delayed - and now 2 years late from initial estimates once under way so 2027 (not 2025 from consortium estimated in 2018).
And CfD renewables will be growing rapidly in coming years with more - 16.8 GW more of licenses - a lot of it in 22 auction at c30% 2015 pricing for FOS wind.

CfD rebate now £54 in £3280 Ofgem DFDD cap breakdown, up from £40 in £4279 last quarter.

2) Attempts to alter existing arrangements failed last autumn with renewables suppliers - many on old 2002 style contracts.
Having failed to achieve that renegotiation, and given come July EPG likely to be irrelevant if predictions correct, govt probably more reluctant to take on whole electricity generating sector and grid price bid system.
And depending on pricing, may even be deliberately avoided, in favour of maintaining windfall tax plans on old renewables now in place.

3) Knee jerk if by that means EPG and other funds like EBSS, was a widely called for reaction to Ukraine war / sanctions price impacts

See 1) for long term changes already working / in place to mitigate future price risks, and point 2) for possible reasons why govt may not do much else too radical in near term.