Is it OK to waste electricity when Agile prices are negative?

mmmmikey

The idea of wasting electricity (and by that I mean things like putting a fan heater on in the garden) seems intuitively very wrong. But there are times when Octopus Agile prices go negative (i.e. "plunge pricing") and you are actually paid to use electricity so there are cost savings to be had by doing so.

As I understand it, the only time plunge pricing is offered is when the National Grid (or whoever?) have already committed to buy more green electricity (wind and/or solar?) than they can sell so they have to pay people to take it off their hands as they cannot cost-effectively stop the generation.

So

(a) there is no environmental impact because the electricity that is being wasted is green and already being generated - i.e. no-one is generating more electricity than needed specifically so you can waste it. As such it's OK from an environmental stand point to waste the electricity. You're not damaging the environment by doing so, and if you don't all that will happen is they will have to pay someone else to do the same thing.

(b) there is no adverse effect on the pricing for other consumers because the cost of this is already baked in, and presumably they need to cater for the possibility of over generation from time to time to reduce the possibility of going the other way and not having enough.

Have I got this correct?

masonic

It would be a bit more nuanced than that. Up to a limit, you are soaking up excess electricity from the grid that would cost money to deal with by other means. There will be some limit to this excess energy.

If the supply and demand mechanics shift too far, presumably that would affect prices achieved at future auctions. That could have some impact on other consumers. It would depend on how many people are doing this and how much energy they are using.

The other factor to consider is wear and tear on your own appliances. This has both a monetary cost to you and an environmental impact.

[Deleted User]

There is an impact on all consumers when energy supply exceeds demand. Wind farm generators are paid a constraint payment to feather the blades on their turbines. As suggested in this article, these payments are often higher than the payments made for producing electricity:

https://www.energylivenews.com/2023/01/30/are-switched-off-wind-turbines-generating-more-cash/

Constraint payments are necessary as electricity generated has to be used or stored. We have little in the way of storage and our fragile grid infrastructure cannot get the electricity to where it might actually be used. We therefore end up in the bizarre situation where turbines in the NW of Scotland are constrained, and gas suppliers are being paid to produce electricity in the South of England.

Paying customers to use electricity is how a smart Grid has to work until we get affordable storage and/or improved Grid infrastructure. As said before, the cost of doing this is less than the cost of a constraint payment. Conversely, when demand is high but supply is limited, it costs less to pay consumers to use less electricity than it does to have a conventional power station idling on a ‘just in case it is needed’ basis.

Edit: it is also worth pointing out that Agile tariff is available to all consumers with a smart meter on a 30 minute profile. That said, many posters have fallen for the hype that Agile is just a way of charging very high unit prices at times of high demand. Also, there are those who say they cannot be bothered to load shift to save a few pennies. 

As the Agile 30min price follows the cost of producing electricity, it might be better for people to look at it through a different lens. We are helping to save the environment by using electricity when prices are low. This is where our electricity is coming from as I post (nearly 80% from renewables and nuclear)

QrizB

Yes - fill your boots! It's not harming the environment or anyone else, so go for it!

If it helps, don't think of it as waste - think of it as helping to balance the UK electricity grid.

mmmmikey

Thanks for the responses so far. It's a genuine question and I am certainly interested in the responses. The gains from "wasting" electricity like this are modest and it's not something I would feel happy about if I thought it was unethical. I have been doing this today at full tilt by way of a test of the automation, but I haven't decided yet whether to do this going forward which is where the question comes from. The same automation will give me free heating in the winter and I certainly have no qualms about that as nothing is being wasted.

Scot_39

Firstly the energy you would actually be wasting isn't all green, right now I doubt it ever is(*) or can be in UK(**).

Because there is always a core base generation from likes of gas, biomass etc in use.  Paying to switch off wind doesn't make that any greener.

(**)And if immediate future their just aren't the plans to improve transmission in step with new renewables fields (egl1 and egl2 both run 2-3 years behind major Scottish field expansions), and far too little investment in the literally 100s GWh (1000s to get rid of most gas plants etc)  storage required.

So using electricity is for now always harming the environment.

As does the production and installation of renewables capacity in the first place.

Have a look at grid monitoring sites and actual generation mix vs demand.

It's been abnormally windy over last 24 hrs for summer and not too warm.

[Unlike last July where heat, things like office Air con loading maxed out  its share of UK demand - remember the £9724 record on Belgian interconnect - paid to keep London and SE grid up when no wind and high temps aligned for days.]

(*) And even then if look at sites like grid iamkate com  over last 24 hrs c15% was still gas, c5% still biomass - both emitting greenhouse gases.  Only c58% wind and c9% solar.

So literalky at no time was there zero emissions in the mix of power you were or would have been drawing from the grid.

Roll that back to last week's averages - gas 36% biomass 6%, so 42% generated with live real time emissions.

Roll that back to last year similar, so wind c30%, solar c5% - so about 1/3rd - coal gas and biomass - c47% or about a half.

I'd definitely vote for still impacting the environment.

Price - that's potentially more debatable if only look at spot rates.



It is arguably nonsense to have negative pricing for anyone at any time - but that is the stupid situation we have gotten into by failing to invest in storage and grid tranmission fully in step with renewables capacity.

There are £100s of billions of pounds in conventional and renewables plant installed and being installed - it all has to be paid for.

But then investing in storage as part of the headline cost - suspect that would have stopped the renewables roll out in its tracks. Making the true price of renewables much higher - transparent - and directly comparible to conventional plant - and in all likelihood unpalatable to the masses.

As it is many are beginning to see decades of greenwashing and bad planning for what it has been.  And with energy prices staying high for years to come - more are questioning the decisions, the march to ever more over renewables capacity.

By 2027 UK will have c45GW installed wind and solar - demand when strip out base gas, biomass and nuclear - sub 20GW on a summer weekend.
15GW from last 2 auctions for 2023-2027 delivery.
I hate to think what we will be paying that extra 15GW in new capacity - over 20GW in total potential unused capacity - in compensation.
As the figures already run into £100s of millions.

Scot_39

QrizB said:

If it helps, don't think of it as waste - think of it as helping to balance the UK electricity grid.

Only because our politicians have farmed out responsibility to energy suppliers and so have allowed it to become so.

There is absolutely no need to over generate.

It is a result of the pricing models, renewable contracts designed for and approved by decades of politicians looking to do uk energy on the cheap.

And greenwashing the reality of green goals whilst deliberately biasing price comparisons against nuclear for political reasons.

Designing contracts - that enable greenwashed stats like the kWh at c3.7p auction prices - that don't reflect the actual true cost to consumers.

Like the simple fact we pay compensation when not using that kWh of capacity.

Figures already running into £100s millions - only likely to expand massively as another 15GW capacity comes on stream by 2027.

People sadly let our inept politicians away with it when energy in uk was relatively cheap - it isn't anymore.

Sterlingtimes

Electric patio heaters are a good idea.

Scot_39

Burning 20% last 24 hours  - 42% last week - and 47% last year - of carbon emissions generated electricity mix.

So yes great to save money now, but kind of defeating the goals behind the pricing imbalance to stop those emissions.

michaels

SO why don't we invest in batteries to provide grid services and ideally some load shifting - seems to make sense in Australia so why not here?

Also how about our friend demand management 'Turn up and save' anyone?  We are on a cheap night rate tariff so fill our car battery then but could fill it in the day if incentivised.  Similarly anyone with an immersion hot water tank could have it switch on automatically when the grid has an excess if supported by the correct pricing.

Ectophile

michaels said:

SO why don't we invest in batteries to provide grid services and ideally some load shifting - seems to make sense in Australia so why not here?

If it's Lithium Ion batteries, then it's because they are horribly expensive.  Cheaper batteries are being developed.