Free electric heating for an hour a day Mon-Fri when you come home from work?

TheElectricCow

M25 said:

'Free' is not factual a good term would be unbilled or uncharged (no pun intended)

But the energy is both billed and charged for, so are both those terms not less factual and accurate than simply calling it free?

If I buy a train ticket and then claim the cost of that ticket back from my employer as a travel expense, I think it would be quite reasonable to refer to my train journey from my perspective as free considering that the overall cost to myself would be zero. I don’t think it would be correct to say I boarded the train uncharged, because a charge was indeed made for the purchase of the ticket.

M25

Gerry1 said:

'Free' is just shorthand for 'Free of Charge' !

Yes, that's true to an extent (like a free copy of the Metro newspaper or NHS at the point of service) no doubt but I was pointing out it's free to those that can afford it ie someone else is paying for the 'free' as the whole energy market is now a Ponzi scheme.

So, yes the OP isn't  on the face of things paying extra but the rest of the market is paying for his 'free' electric and there's no doubt his company has figured in the 'free' with their costings eg we used to get 'free' plastic bags at supermarkets.

As I said the only way to get free electricity is to steal it.

JSHarris

Pretty clear that you aren't familiar with the mechanics of electricity generation and the way this interacts with wholesale pricing, @M25 , as that's what's behind this.  It has nothing at all to do with suppliers or anyone distorting the market (other than some choosing to pass on savings to customers), just pretty simple physics impacting the laws of supply and demand.

In mild weather when there is a lot of wind we have a problem with the grid, in that there can be too much generation that cannot easily be turned off.  For example, we cannot turn nuclear off, or even reduce its output much, reactors like to keep running all the time.  Same goes for coal and wood chip, and some older gas stations, they take a long time to get their boilers up to pressure, so like to be run pretty hard, and if turned off they need to stay off for days at a time.  Not much good for dealing with the peaks and troughs of diurnal electricity demand (we use twice as much during the day in winter then we do at night).

This makes it cost effective to pay some faster response (mostly gas and perhaps hydro) generators to turn off when there is a surfeit of generating power, as all thermal generating plant still incurs costs when turned off to keep their plant hot and ready to fire up again (it can take the best part of a day to get a coal plant up to heat, for example).  Rather than pay generators to stop generating it makes sense to drop the wholesale price of electricity to a negative figure.  This encourages more demand and is cheaper overall that turning generating plant off.  It's also more ecologically sound, as it allows renewable generation to still run at full output, reducing the CO2 emissions of the grid as a whole.

These negative wholesale pricing periods are a feature of winter, whenever the weather is particularly mild.  By spring they are usually over, as grid demand drops and we pretty much stop using coal and wood chip fired generation through the summer (it is the coal and wood chip generators that need most time to start up from cold).  We can go for weeks on end through summer without using coal, using nuclear for background, renewables whenever they are available and gas to provide balancing power (together with pumped storage). 

masonic

Theft is the dishonest appropriation of property belonging to another with the intention of permanently depriving the other of it. "Thief" and "steal" are construed accordingly in law.

Therefore, if you bypass your meter and use more energy than is recorded and billed to your account, that would be theft, whereas if an energy producer has a surplus they cannot sell and gives it away for free or pays for it to be used, that is clearly not theft, and that surplus energy was free of charge to the user and the grid. That is what is happening for many people enjoying free of charge electricity today.

The situation the OP is referring to is different again, as they are exploiting a promotion. They are paying for their energy and receiving an incentive from National Grid that may cover its cost. Note 'may', because there is no guarantee the incentive will be earned at the time the energy is used. Many people naturally use a high proportion of their energy at the peak time suggested by the OP, as that is why there is peak demand, and by reducing their usage on days when demand is disproportionately high, they are helping to avoid costly (monetary and environmental) additional generation to be brought online. For this, they are granted an incentive.

JSHarris

The national Grid ESO incentive is designed to try and save them money, as it's cheaper to pay people to use more electricity during low demand periods than it is for them to pay generators to curtail.  It's really just normal economics of supply and demand.  

If something has a low demand and an over-supply it becomes worthless, or even costs the producer money (think of surplus crops and their high disposal cost).  Electricity during mild, but windy, winter weather, with a surfeit of generation and lower than normal demand is just the same as the farmer producing loads of crops that no one wants to buy that he has to pay to get rid of.

M25

JSHarris said:

Pretty clear that you aren't familiar with the mechanics of electricity generation and the way this interacts with wholesale pricing, @M25 , as that's what's behind this.  It has nothing at all to do with suppliers or anyone distorting the market (other than some choosing to pass on savings to customers), just pretty simple physics impacting the laws of supply and demand.

In mild weather when there is a lot of wind we have a problem with the grid, in that there can be too much generation that cannot easily be turned off.  For example, we cannot turn nuclear off, or even reduce its output much, reactors like to keep running all the time.  Same goes for coal and wood chip, and some older gas stations, they take a long time to get their boilers up to pressure, so like to be run pretty hard, and if turned off they need to stay off for days at a time.  Not much good for dealing with the peaks and troughs of diurnal electricity demand (we use twice as much during the day in winter then we do at night).

This makes it cost effective to pay some faster response (mostly gas and perhaps hydro) generators to turn off when there is a surfeit of generating power, as all thermal generating plant still incurs costs when turned off to keep their plant hot and ready to fire up again (it can take the best part of a day to get a coal plant up to heat, for example).  Rather than pay generators to stop generating it makes sense to drop the wholesale price of electricity to a negative figure.  This encourages more demand and is cheaper overall that turning generating plant off.  It's also more ecologically sound, as it allows renewable generation to still run at full output, reducing the CO2 emissions of the grid as a whole.

These negative wholesale pricing periods are a feature of winter, whenever the weather is particularly mild.  By spring they are usually over, as grid demand drops and we pretty much stop using coal and wood chip fired generation through the summer (it is the coal and wood chip generators that need most time to start up from cold).  We can go for weeks on end through summer without using coal, using nuclear for background, renewables whenever they are available and gas to provide balancing power (together with pumped storage). 

Yes, that's all correct and perfectly well explained. I understand totally what you're saying.

You missed my point. I'm not talking about what the companies say or what the people who run the grid claim I'm simply saying that the market is essentially musical chairs and the people not getting seated are picking up the cost.

The reason the electricy or energy isn't 'free' is beacause someone somewhere is paying (ie those who either don't have a so-called smart meter or don't play with the casino electric system) . It's like 'no standing charge' a few years ago. Yes, if you think you're not paying a standing charge then that means you're stupid/easily scammed or whatever. It's in there somewhere.

'Free' electricity is a scam.

M25

I'd better give an example of this casino energy market and/or Ponzi sceme as we're all part of the same experiment governed by the official energy gambling regulator OFGEM.

All those bankrupt energy 'providers' in the last few years we've all had to pick up -quite literally- the bill for their marketing ('free' goodies) and financial failures. Indeed OFGEM are next year charging us BEFORE a company might go bankrupt. How bizarre.

If a crisp factory goes bankrupt the potato supplier takes the loss. If a quasi-energy company (eg. the far from bright Bulb) goes bankrupt all the other people using energy pay? Makes no sense. Their supplier should take the loss not other customers of the grid.

'Free' energy falls into what I'm saying it's all fur coat an no knickers.

JSHarris

@M25,there is no cross subsidy at the consumer level.  This is just the way that government has chosen to regulate NG/ESO and ensure that we always have a reliable electricity supply.  When someone is producing something that no one needs to buy it has no value, and may well result in a loss, effectively a negative value.  There are costs associated with retaining the capability to produce and sell electricity when demand returns, which may only be half an hour later for electricity, and costs need to be met somehow – ultimately the consumer pays.  This has nothing to do with the scenarios you've suggested and everything to do with the mechanics of producing something for a very variable market, one where demand swings up and down rapidly over a wide dynamic range.

The NG/ESO has an obligation to ensure that there is always enough electricity available to meet demand, that's written into the regulations they work to.  This results in them maintaining a buffer of spare generating capacity on short notice call, to meet sudden increases in demand (the infamous TV end of a major sporting event pick-up, for example).  To do this they have to place contracts with generators.  The definition of a contract is that it must comprise an offer, the acceptance of that offer and the exchange of a consideration in order to be valid.  In this case the key part is the last, the exchange of a consideration.

For contracts with generators most of the time the exchange of a consideration is them producing and supplying electricity, and in return being paid for it.  However, when their electricity isn't needed (times when there is a surfeit of generation relative to demand) the exchange of consideration effectively reverses, they get paid to not produce electricity, but to stay on standby ready to produce when demand increases again.  This system ensures that they stay in business when not selling electricity,  and is handled via a system of curtailment payments that pay them to keep running but not supply electricity.  This is needed as it's essential that they be able to supply at short notice when demand increases, perhaps in half an hour, an hour, or a few hours time.  

It is these curtailment payments that drive negative pricing on the wholesale market, as it is cheaper for everyone (including consumers) for curtailment payments not to be made, but instead pay all consumers to increase demand.

It is definitely free electricity as far as consumers are concerned and there isn't any sort of cross subsidy from other consumers.  Negative pricing reduces the cost to consumers overall, because the negative pricing costs are lower than curtailment.  If ESO didn't encourage negative pricing during times of surfeit then everyone would pay more, due to the increase in operating cost from making higher curtailment payments to generators.

The farming produce analogy works here, as I mentioned in another post.  Years ago there used to be a big problem with excess straw on arable farms.  Farmers would burn it, as it had zero value and cost money to dispose of.  Stubble burning was then outlawed, leaving big arable farms with a problem; they had massive amounts of straw and no way to sell it or get rid of it without paying someone a lot of money.  As always, the market finds a way to take advantage of situations like this and decades ago an arable farm in East Anglia set up a straw supply business to the West Country (before energy companies found a way to burn straw to generate electricity).  There was a demand for straw down there for animal bedding (and my ex-wife was one of those trying to buy straw for bedding at that time), as there's not much arable farming in the far South West.  The farmer paid to transport his straw down there (so to him the straw had a negative value), as that was cheaper than paying to dispose of it locally.  The farmer was losing money by paying to move the straw but that loss was smaller than the loss incurred by paying to have it disposed of locally so overall he benefitted by doing this.  This is exactly what happens with the grid and negative electricity pricing.