2y ago

Energy bills to tick lower this winter but will remain high

www.bbc.co.uk Energy bills to tick lower this winter but will remain high

A new price cap by regulator Ofgem means a typical home will pay £1,923 a year from October for energy.

An annual energy bill for a typical household will fall to £1,923 in October under regulator Ofgem's new price cap.

I honestly think it's appalling that they're continuing to let these energy providers make obscene profits from us.

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32 comments

On the other hand. It's the only thing that's made people change their energy use habits.
People on the news with thermostats at 24 degrees c because they like to wear t-shirts all year... 🤦
- Ah yes, shift the focus onto the individual rather than the profiteering polluting energy companies.
  I'd rather have cheaper renewable energy, warmth and comfort, than wear hat, gloves, thermals multiple layers, and sit in a sleep bag in my own living room.
  
  I didn't say that though.
  I said the price increase changed behaviour. It's reduced fossil fuel usage. I only care about net results. If you're cold, go for a run. It'll help reduce stress on the NHS
  Renewables are only economically viable because the cost of power is paid on the last generator, which is natural gas.
  So higher gas prices make renewables a more efficient use of capital and justify the capex
  You have a problem with that?
  
  If you're cold, go for a run. It'll help reduce stress on the NHS
  Not if you fall, or get hit by a car...
  Renewables are only economically viable because the cost of power is paid on the last generator, which is natural gas.
  This is not true, renewables are economically viable at much lower prices than fossil fuels because their next unit cost is effectively 0.
  It is true the price paid to generate is the market rate, and that is set by the last generator. That does make renewables immensely profitable, which in turn acts as an incentive to build more.
  But we are talking about electricity generation here, not heating which is what you were doing on about, and the vast majority of heating in the UK is non-electric and transitioning to renewable sources is extremely expensive.
  That said, using less gas in electric generation would reduce supply shocks in the gas heating network.
  Edit: next unit cost, not just unit cost.
  
  Their unit cost is zero?
  Capex is huge, and there will always be opex for people, repairs and maintenance. The blades and motors etc all have to be replaced regularly.
  Solar output is also much less during winter
  My new boiler can run a hydrogen mix and all the UK metal pipes are being replaced with plastic inserts so at some point green hydrogen could offset natural gas and that itself could be replaced eventually with syngas from biofuels.
  
  Their unit cost is zero?
  Apologies, I meant to say Next Unit Cost, didn't spot the missing word. As in the cost to produce one more unit of electricity. This measure ignores capex and is just opex plus associated usage costs like amortised wear and tear, depreciation, etc.
  It's near 0, but not 0, because the input (wind, sun) is free, whereas gas (for CCGT) is not. As such renewables can sell in to the grid, profitably, at lower prices than fossil fuels can.
  The big problem, as you show with the example of cloudy winter days, is disconnecting generation from usage, via storage.
  Green gas from anorobic respiration, including hydrogen (or just blue hydrogen, made via electrolysis of sea water) is a useful step for retrofitting, but not something - in my opinion - that should be considered for new builds.
  
  Ah, yes. But we can't actually ignore capex, because most of the fossil fuel infrastructure is sunk cost.
  Renewables are net new capex, which needs a return. The reduction in cost of renewables is the best thing. A barrel of oil isn't going to get any cheaper to pump out but wind and solar will. The war is already won, we just haven't seen the benefits yet.
  I think green hydrogen would help smooth the peaks of renewables but it's not very efficient, probably a better use is making ammonium nitrate for fertiliser or as a replacement for heavy oil for shipping
  
  Context of the situation is important. You can't use them interchangeably.
  Capex does not matter when we are talking about choosing to generate using existing infrastructure, because capex amortisation is the same regardless of whether you're generating or not. Choosing whether to generate at 1am on a random Tuesday has nothing to do with your previous capex, but everything to do with your next unit cost. If price is higher than cost, you'll generate, it not you (probably) won't.
  Capex payback is important when businesses are evaluating building new generation. The spot price at 1am on a random Tuesday has nothing to do with whether you're choosing to build new infrastructure. What does matter is average unit prices, over time, not one data point.
  
  But you said you wanted more renewables... That's capex.
  
  I'm not the person you originally replied to when you falsely claimed that renewables are only economically viable because of last generator pricing.
  I have explained why that isn't the case, how both generation and new capacity decisions are made, the different aspects those decisions consider, and how because their next unit cost is lower due to generation input being free they are able to operate profitability at lower spot prices than are achievable for fossil fuels.
  One last time - capex payback is a consideration when building new capacity, yes, but that is based on average prices over decades. It is not a consideration when choosing whether to power up or down on at a specific time on a specific day.
  Attempting to simplify this to just capex is wrong.
  
  Economically viable means you can raise the capital to build it...higher returns attract more capital
  https://www.designingbuildings.co.uk/wiki/Economic_viability
  Spain has cut the last generator link so now renewables are not charged at the gas rate.
  Let's see how it works out. It's already helped reduce inflation there.
- People were just not putting their heating on in the winter. It's unhealthy at best, dangerous at worst and allows your home to get damp. I was honestly miserable last winter without heating.
  
  You can thank the Tories for that. Other countries imposed a cost cap. UK, Netherlands and I think Belgium didn't and used benefits to offset with differing levels of effectiveness.
  
  Yes, we have the highest energy bills in the world due to our government and it has put people into fuel poverty. Saying it's purely stopping people from sitting at home in 24°C heat is naive.
  
  Net highest? Got a source for that?
  I didn't say it's purely doing that. I merely stated that the only thing that has made people change their behaviour during a climate crisis is the price of energy going up.
  
  https://www.cityam.com/revealed-brits-are-paying-the-highest-electricity-bills-in-the-entire-world/
  Yeah and people would lose weight if we had famine. It's hardly a silver lining.
  
  I said net. Like I said, they let the energy shock into the economy and paid benefits
  Here's the size of it. UK's was one of the largest 2 years running
  
  Here's a comparison by the OBR
  https://obr.uk/box/an-international-comparison-of-the-cost-of-energy-support-packages/

32 comments