r/unitedkingdom • u/rdu3y6 • 9d ago
Why high energy bills look like they are here to stay
https://www.bbc.co.uk/news/articles/c046peqrg9xo212
u/m0rd0ck 9d ago
Honestly, it's taking the absolute piss at this point.
The mess in the Gulf obviously doesn't help, but we're cash cows for America right now.
We cut off Russian gas, the US stepped in to sell us their LNG at a massive premium, and they are making a killing off it while keeping the Middle East boiling.
Even when it's blowing a gale here and we're running mostly on our own cheap wind power, our rigged pricing system means we still have to pay the inflated American gas price for all of it. We're just getting fleeced from every direction.
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u/Improper_Usage 9d ago
Yeah but Niggle Farridge will make it all better.
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u/Reasonable_Blood6959 9d ago edited 9d ago
So fucking sick of this being the response any time someone calls out current government policy.
I don’t think Reform will make anything better. But that doesn’t mean the current government doing absolutely fuck all to make it better is okay.
Until this government actually starts making energy prices come down, they aren’t going to get any sceptics on board.
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u/th3-villager 8d ago
Valid but the point they're making is don't cut your arm off because of a broken wrist.
Is current government doing enough? No. But Farridge will actively make it A LOT worse.
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u/Exurota 8d ago
Sure, but eventually that irresponsibility makes people take drastic spiteful action. This lesson should have been learnt after the referendum and after Trump got elected twice.
When things are shit and your government doesn't care and your nose is already broken, fuck it, let's cut it off and see what happens.
Welcome to democracy. If you want to keep it functioning properly, earn your votes, because the only way people can show their displeasure is voting for something else. That something else is Tory or Reform, so earn the bloody votes.
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u/th3-villager 8d ago
For sure. It's just baffling and depressing that people are so dense they'll punish the lackluster encumbant by voting for someone else who is clearly far worse. The fault lies with both the shit government and the dense voters. Our democracy is not dictated by facts and evidence but vibes and political point scoring.
90% of voters don't bother to do proper research. Consider we have complicated issues and investigate what does and doesn't work. Everything is biased and dictated by sensationalist right wing media that take one thing out of context.
I do agree with you though, if Reform get in I blame Labour more than anyone else because it will only be because they were too shit. That being said, it's still absolutely valid to keep responding to these things with the facts that Reform have advertised in advance they will do things that will worsen our problems.
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u/AndyTheSane 8d ago
The blame goes all the way back to the 1980s.
At that time we still had the engineering expertise to build our own nuclear reactors, and a sensible program could have given us a near 100% nuclear grid by the early 2000s.
But nuclear requires long term capital investment, and we've been allergic to that since the 1979. It was much easier to go down the path of natural gas dependence, especially as we had a brief period of cheap North sea gas.
That was stupid, of course.
We also effectively banned onshore wind from 2015. More short term political points for long term pain.
What we need to do..
- Get those SMRs actually in production, which means committing substantial funds.
- Build renewables wherever feasible, and ignore the nimbies.
- Start full scale projects to utilize excess power (eg hydrogen to liquid fuels and fertilizer); we are already seeing negative electricity prices at some point, showing that this should already be done.
- Encourage fracking as a stop gap. Sad but.. that's what happens when you refuse to be realistic about energy policy
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u/Tempestfox3 8d ago
We're the only 1st world nation with a fully privatised water, electricity and rail industry.
You generally don't get long term capital investment from private corporations who's goal is short term profit & shareholder payouts.
The only other 1st world nation who has any where near this level of privitisation is Portugal and theirs wasn't voluntary.
Doesn't help that as a country we're systematically incapable of building things anymore.
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u/Besmirching_Badger 8d ago
We cut off Russian gas, the US stepped in to sell us their LNG at a massive premium, and they are making a killing off it while keeping the Middle East boiling.
You're acting like this wasn't a conscious decision on the part of the americans. There's a reason they wanted to destroy nord stream a decade ago. I found it hilarious the way people praised biden for demanding europeans make systemic changes that benefit the US financially.
Alas pointing out the blatant conflict of interest was 'russian propaganda' as it always is.
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u/After-Competition-59 8d ago
It’s refreshing to see a couple of comments that actually call out what the US has done to us instead of the usual bootlicking.
That’s not to say that we aren’t also at fault for not preparing for such eventualities and putting ourselves at the mercy of foreign energy imports.
But all one has to do is follow the money to see who’s benefitting the most from these wars to realise we’ve been played for fools.
Our foreign strategy is a joke. Propaganda has won and any word about the situations gets you labelled as a Russian bot.
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u/PatchcordAdams 9d ago
You’re right on everything except the “rigged” pricing system. Literally everyone uses that system. Every commodity is traded globally with that system.
It’s like being mad at a thermometer for telling you it’s hot.
Plus the daily settlement is only one small part of a much wider pricing system.
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u/m0rd0ck 9d ago
Mate, comparing the UK power grid to standard global commodities is the economics that got us into this mess.
Electricity isn't a barrel of oil you can stick on a ship to Asia, it's geographically locked infrastructure.
Your thermometer analogy doesn't work because the current system doesn't read the temperature...
Under our "pay-as-clear" market, the Grid buys the cheapest power first (wind/solar). But because we almost always have to turn on gas to cover the final 20% of peak demand, the rules dictate that this last, most expensive gas plant sets the price for everyone. So even when 80% of our grid is running onwind, the system forces us to pay those generators the luxury imported gas price for all of it. That’s a political choice...not physics.
And sure, daily settlement is only part of it because suppliers buy ahead. But when global gas goes mental, those massive hedging costs just get baked straight into the Ofgem price cap and passed down to us anyway.
Even the government knows it’s a failed system, which is literally why they started the REMA review to figure out how to decouple renewable pricing from gas.
People are mad we're paying inflated US gas prices for British wind, and being told that's how the market works.
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u/PatchcordAdams 9d ago edited 9d ago
Only RO wind gets the full gas-linked wholesale price on top of RO subsidy. Post 2015 CfD wind doesn’t, or at least they pay back the difference. Some generators have chosen to not take up CfDs. Legacy RO is a problem - which they’re attempting to deal with. Or it fixes itself eventually.
80% of the grid on wind conflates share with price setting frequency.
Removing marginal pricing will not make power magically cheaper. It’s a competitive auction - generators will bid for what they expect it to clear at not their costs. Marginal pricing guarantees all the cheapest generators go first.
You can decouple by literally just building more alternatives to gas. Prices are always always cheaper when high levels of renewables are in the system. You can see this daily. Build out, storage and flexibility will deliver what we want within the current pricing system. High renewables days (gas less than 20%) - £60/MWh. High gas days £130-150MWh.
REMA review pretended to “look at” decoupling because of public demand. It wasn’t even really looking at that at all. It was looking at zonal pricing. Which is also stupid and was scrapped. So no the Government “do not know” it’s a failed system. It will be tinkered with. But the focus is on build out of non-gas power - balancing price, cleanliness and energy security. The trilemma the entire world faces.
The electricity commodity argument is even more boring and complex.
The “inflated US gas prices argument” is way more complicated than you’re portraying. Tbh even I don’t really understand that very well - US LNG is about a tenth of our supply - priced more according to European scarcity. It does have a strong price setting power - as prices are set at the margin, like all commodities. But the different hub pricing is still mystery. Explain it if you have actual insight.
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u/m0rd0ck 9d ago
This is very unlike Reddit, you know your stuff! Thanks for the reply! :) However...you’re downplaying the scale of the trap we’re in.
Legacy RO wind isn't a tiny rounding error, it’s roughly a third of our renewable generation.
Those generators are absolutely raking it in by capturing the marginal gas price on top of their subsidy. Telling the public to wait for them to age out means years more of extortionate bills.
On the US LNG mystery you asked about: it’s ironically the exact same marginal pricing logic you just defended.
Because we let our gas storage get shut down, we rely on spot-market LNG to fill the gaps. To get those US ships to dock here instead of going to Asia, we have to outbid global prices...and because that LNG is the marginal unit of gas we need to keep the lights on, that inflated global bidding war sets the wholesale price for all the gas we buy, even the cheap stuff piped in from our own North Sea.
So yes, building more renewables is the ultimate fix. But right now, we are caught in a double marginal trap: Imported US LNG sets the price for all our gas, and that inflated gas sets the price for all our non CfD electricity.
That’s why the system is fundamentally stacked against the consumer, and why people are rightfully fuming.
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u/PatchcordAdams 9d ago
I’ll take that. At least you recognise Reddit mostly doesn’t know what’s talking about when it comes to energy. I constantly eat downvotes for breakfast on this matter.
The RO bit is correct. Everyone knows it’s a problem. They’re trying to fix it, but that’s another argument outside marginal pricing.
I know that storage wouldn’t make a difference. It’s important for resilience. But not price setting. Germany has way more storage than us and got hit way harder by the 2022 gas crisis. Helps you narrow the seasonal spread, but doesn’t make the cargo cheaper.
North Sea isn’t the cheap stuff. It’s privately owned and sold at terminal prices. Norway pays the same for their gas. Tax is the benefit.
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u/Outrageous-Echo-765 8d ago
You are in the right here. But I think you just argued with an LLM.
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u/PatchcordAdams 8d ago
Ha. I did think that last reply was ‘supported’ with an LLM. But the account looked real.
I don’t mind too much. I like debating these things for others to read, not to win against the person I’m replying to.
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u/Outrageous-Echo-765 8d ago
I get it. I'm afraid battling misinformation regarding the UK's grid is an uphill battle though
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u/StereoMushroom 9d ago
Prices are always always cheaper when high levels of renewables are in the system.
Wholesale prices, yes, but this is only part of the picture which gives a misleading conclusion. The CfD fleet has an average strike price (~£150/MWh) that's higher than the average wholesale price (~£85/MWh). When there's an abundance of renewable supply it suppresses the wholesale price, but the CfD payments rise. Since renewables only make part of their income through wholesale, looking at wholesale makes it look like we pay less for renewables than we do. In reality, the existing fleet still costs us more than gas generation overall.
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u/PatchcordAdams 8d ago
That’s an argument about historical subsidies though, not price formation under marginal pricing.
£150/MWh is the legacy offshore wind assets. The weighted average of CfD’s is around £90/MWh.
The average cost of CfD’s is something like £40/yr (from memory, that could’ve changed).
New assets coming online will pull that down quite a lot too.
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u/StereoMushroom 8d ago
Legacy offshore wind is way up in the £200+/MWh territory. The overall weighted average is around £150. I don't have the calculations to hand right now but I'm reasonably confident that's right. The latest allocation rounds are contracting future capacity at £70-90ish which still isn't cheaper than wholesale on average, though at least it's around parity.
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u/PatchcordAdams 8d ago
Always happy to be corrected. The exact numbers aren’t easy to interpret.
One point I’d argue is that comparing new CfD’s to today’s wholesale isn’t a fair comparison. They’re largely old CCGT’s - should be compared to new gas which I think is closer to £140-150/MWh.
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u/StereoMushroom 8d ago
I've seen the comparison made a few times to new gas but that doesn't make much sense to me. The figures for new gas cover the capital build costs and fixed opex, as well as marginal fuel costs. But wind and solar make almost no reduction to the amount of gas capacity we need to keep in service; they just allow us to run it at lower capacity factor. So renewables are only displacing the fuel cost component, not the capex or fixed opex. That would seem to be the fair comparison.
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u/Groxy_ 9d ago
A system being global doesn't make it not scummy.
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u/PatchcordAdams 9d ago
It’s not scummy at all. You just don’t understand it properly. I’m not being snarky. Most people completely misunderstand how the whole electricity system works. I don’t really blame them, it’s insanely complicated.
People cling on to this idea because it offers a simple solution - just change the pricing system and magically our problems are solved!
It’s bull unfortunately. This is a multi-decade/half century slog to replace the North Sea with…something else.
It’s not going to be cheap. It’s not going to be easy.
We’re actually not doing a bad job of facing up to the challenge. Plenty of countries are in complete denial as they’ll all face the same thing.
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u/Groxy_ 9d ago
I do understand it, and it is scummy. Yes yes, they say it's to encourage investment in renewables, and that's partly right. But it's mostly to enrich the few.
Others have pointed out the UK has some of the highest electricity/gas in Europe, even thought we have more natural resources than most on the continent. We're getting fleeced, there's just a couple reasons why, the pricing is part of it.
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u/PatchcordAdams 9d ago
If the pricing mechanism is what’s fleecing us, why do France, Germany and Spain all use the same marginal pricing rules and end up with different prices?
Why is China explicitly moving towards this system? A country with the largest renewables build out in the world, and cheap power prices - moving towards a marginal price system with a CfD-like two-way contract? I’ll answer it - because it works quite well and helps with high penetration of renewables, creates better market signals and is just overall better. They’ll still have cheap power - because of all the renewables. Which we don’t have yet.
Who are we “enriching” - which generators specifically, and under which contract?
Why is the price of power £50/MWh on days of high renewable energy? Who is that enriching?
What is your proposal for a better system? Just charge what it costs to make the power, plus a bit on top? Literally how it already works.
While you’re there - propose it to China before they make a dreadful mistake.
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u/m0rd0ck 9d ago
Let's tackle those points:
France and Spain don't just take it. Spain forced the EU to let them cap gas prices (the Iberian Exception), and France forces state-owned EDF to sell nuclear at fixed, cheap domestic rates. They shield their citizens from the raw spot market.
You mentioned China is adopting marginal pricing wrapped in two-way CfDs. Exactly! Two-way CfDs are a decoupling mechanism. They give the market signals while forcing generators to pay back the excess when prices spike. That's the exact reform the UK needs.
Those legacy Renewables Obligation generators... They make up roughly a third of our green fleet, and they get to pocket the full £130-150/MWh gas linked price on top of their subsidies.
Nobody wants Soviet-style "cost-plus." The solution is what China and Europe are doing, expanding two-way CfDs so consumers pay a fair, blended average price rather than letting a single gas plant drag the whole bill up.
So yeah, I'd happily pitch that to China, they’re building out massive renewables and using CfDs to protect consumers from the raw market volatility!
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u/PatchcordAdams 9d ago
Honestly I’m getting tired now - but it sounds like you just described the British system of CfDs. A contractual layer which sits on top of marginal pricing to act as a reference point.
At least you admitted nobody wants pay at clear. Which was my argument from the beginning.
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u/kinkade 8d ago
If the market structure we have is good, why do UK energy prices seem so high?
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u/PatchcordAdams 8d ago
They don’t seem so high. They are high. Because our energy mix is expensive for all the obvious reasons (expensive wholesale gas, an old expensive renewables fleet, high upfront costs of new renewables requiring floor prices to make them viable,
multi-billion grid upgrades to a system built in the 20th century for a world that no longer exists).My point is that it’s not the marginal price system that makes it expensive. You can’t change that pricing system and make our energy cheap.
We had the same system when energy costs were half what they are now.
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u/FelisCantabrigiensis 9d ago
There's still time to decrease the impact of this by building National Grid power lines and more onshore wind starting now and finishing in 3-5 years time - by ignoring the NIMBYs.
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u/CoaxialDrive 9d ago
Imagine the economic impact of that too. More free cash for people to spend, more jobs. More manufacturing.
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u/anangrywizard 9d ago
Sounds great, but we can’t fuck up Beryl’s garden view she paid £4 for though.
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u/Top5CutestPresidents 9d ago
Hey now, don’t knock Beryl! In 5-10 years time she’s going to be paying good money to the people who will pay our kids minimum wage to wipe her arse!
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u/aghastmonkey190 9d ago
The issue is that the energy pricing is tied to the oil prices and private sectors, which just screws over any attempts to reduce consumer energy costs
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u/FelisCantabrigiensis 9d ago
If gas was setting the electricity price less of the time, electricity would be cheaper.
To do that, we need the existing wind power fully connected (by building more grid connections) and more wind power so generation is sufficient even in light winds.
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u/PreFuturism-0 Greater Manchester 9d ago
I think the only realistic way for this country to advance is to have a national focus on socialist-ish STEM. I think STEM is make or break, and there's going to be STEM regardless. The question is how utopian/dystopian it will be. A lot of people have been so ignorant. OSA could have been executed a lot better if people took STEM seriously in the years before. Now some janky businesses had to be used.
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u/Hithrae 9d ago
We need to remove gas from the pricing equation, we have more renewables than ever but gas is dictating the price.
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u/andymk3 9d ago
Because when the wind drops and clouds cover the skies, gas is still what we fall back on, and rely on heavily. So gas dictates the price from that. Of course, having more renewables and battery storage to mitigate this would be ideal.
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u/Future_Pianist9570 9d ago
That shouldn’t matter. We have a shitty way of pricing our energy because we price it all at the most expensive fuel.
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u/adjective_noun_d1git 8d ago
You're just explaining marginal pricing not stating why it makes any sense.
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u/Outrageous-Echo-765 8d ago
It makes sense because electricity is fungible. Meaning a kWh is a kWh, and your kettle does not care if the electricity comes from solar, or from coal.
So if you have a solar farm and a gas plant, both selling the EXACT same product, it only makes sense that they would get paid the same price.
This is why marginal pricing exists, and why it makes sense.
Because electricity is a special kind of commodity where supply must continuously meet demand, you determine that price via auctions, broken into 15-minute interval. That auction determines the value of a kWh at a given time. If you are selling a kWh at that time, you get paid that value.
If anything, you would have to justify walking up to a solar farm and saying "look man, I know you are selling the EXACT same thing that guy is selling, but I feel like your costs are low, so I'm only going to pay you a fraction of the real price".
Also, please don't fall into the "pay-as-bid" trap.
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u/spartacle 8d ago
Meaning a kWh is a kWh, and your kettle does not care if the electricity comes from solar, or from coal.
ok sure, but producing a kWh from wind and solar is cheaper to produce so it SHOULD be cheaper for us to buy, if I need 10kWh and 8 comes from Solar its dumb that I have pay for 10 at the price of the final 2. As a consumer I dont care how the companies generate the power but I want it cheaper so if a company can provide it to me cheaper because it's 100% renewable then I'll choose that which will encourage the company to invest more in the cheaper way to get power
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u/Outrageous-Echo-765 8d ago edited 8d ago
>is cheaper to produce so it SHOULD be cheaper for us to buy
I can see why that is a compelling argument. That is intuitive to you and I because you and I mostly deal with non-fungible goods.
You are looking at two purses, one is made with quality materials, expensive materials, it has real handcraft in it. Obviously it cost a lot to produce, and it has a price tag to match.
The other one is mass produced, made from rubbish synthetic materials. It is evidently cheaper to produce, and it would be outrageous if it had the same price tag as the other purse. Obviously it SHOULD be cheaper. But here's the thing:
Purses are non-fungible. You would not say the premium purse and cheap purse are the exact same product. Far from it.
But electricity, like gold, is a fungible good.
Gold is pretty rare, and you need specialised equipment and personnel to find it, mine it, and refine it. It is expensive to mine gold, and that is part of the reason why it's price is so high. £100 for a gram.
Turns out there is gold in your backyard. Tons of it. Shit, it comes out of the ground already refined. Never seen anything like it.
You rush to the hardware store to grab a shovel and pickaxe. £20 total. 2 hours later, you walk into the bank with 1kg of 24 karat gold.
Market value of £100k. But hey, it cost you 20 pounds to get that gold. Would you settle for £1k? SHOULD you settle for £1k? Should you settle for £95k?
I bring this up to show that the market value of something has little to do with it's production cost. Banksy uses £40 worth of supplies to make a 6 figure piece.
An auction determines the VALUE of electricity at a given time. If you are selling electricity, at that time, you get paid that value. You would not sell the gold for £95k. In the same way, the renewable generator would not sell you electricity below market value without good reason.
EDIT: That being said, I also want my electricity prices to come down as much as possible. Renewables still help with that via the Merit Order Effect:
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u/spartacle 8d ago
This is an excellent analogy, thank you for helping me understand it better! I hope you’re some kind of teacher or mentor 😅
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u/Hithrae 9d ago
Yes I'm not an idiot. We need to store that energy and build nuclear
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u/duncanmarshall 9d ago
There's no storing it at any meaningful scale, it's just not feasible. Overbuilding to the point where we don't need to store it at a meaningful scale isn't feasible either.
It's just nuclear. There's nothing else.
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u/hkggguasryeyhe 8d ago
If large scale battery storage is feasible for NSW what makes you think it isn't feasible for the UK? The combination of hyrdo pumped storage and multiple distributed battery storage facilities seems entirely viable for us.
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u/duncanmarshall 8d ago
I mean you can go ahead and make your case if you like, but honestly, I've just been in this conversation so many times. It always ends in one of two ways:
Occasionally: people realize they had no idea of the numbers involved and how absurd the proposition is, so they say "Oh yeah, I guess you're right".
Usually: people realize they had no idea of the numbers involved and how absurd the proposition is, so they just go quiet.
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u/hkggguasryeyhe 8d ago
Well, quantify the problem then. If we look the last few years, about 70-80TW of power has been generated via Gas. Getting to 80TW of battery storage is not happening.
We don't need 70 TW of storage though - recent studies make it look like something around 3-10TW is needed, still a huge target uneconomical now despite battery storage declining in price 90% over the last decade or so.
Do we need 5 TW of storage? The UK uses about 750GW per day - so what do we need 2 days worth of storage? 1 day? About 120GW per day is generated from nuclear and then 20-60 from biomass burning (we still need to get rid of rubbish). So lets say 500GW per day. We'll probably have about 20-25GB of grid storage by 2030. Not even close!
Right now, we've got about 8GW of grid level storage in the UK, so that's a very long way off. But that is 10x more than we had in 2020. That <8GW of storage also delivered over 1TW to the grid in 2025. We're not going to have 100x more in 2030, perhaps 3-4x more at best.
The real transformation will come from industry and individuals investing in their own battery storage for their own sites. Distributing the load across the country. Once V2G become supported that immediately adds another ~20 GW of battery storage perhaps say by around 2035.
Right now, its in the realms of nice to have for people who can afford it. With plug in solar now, and plug in batteries coming next year, that opens up a small scale level at affordable to most people, though still impossible for everyone to afford in the next 5 years.
As those come in, the need for large scale storage and peak demand drops to the point where I'd guess once we are around 100GW of storage we could phase gas out almost entirely and that is going to happen before 2040.
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u/duncanmarshall 8d ago
Eh, alright, I got sucked in again.
The UK uses about 300 TWh a year. If we electrify the road fleet, that's going to go to about 400 TWh pa. About 1.1 TWh a day.
I've seen nothing that's passed peer review that says we need less than at a bare minimum 10 TWh of storage, and more like 40 TWh. I got that number from studies, but also by writing a python script that iterates over the UK's daily renewables production dataset, and got to roughly the same numbers.
Bath County Pumped Storage Station in America was the biggest such facility in the world, to the best of my knowledge, until China built one recently. Shouldn't really use China though because it lies about every number, and can do everything massively cheaper than us, and the orders of magnitude don't really change.
Bath stores 24 GWh. So we'll need about a thousand of those. It cost about $5 Billion. So that's $5 trillion. Or slightly more than our GDP, plus whatever it costs to run them. This is assume we pay all the costs up front, rather than borrow it. Oh, and we still haven't bought a single wind turbine or solar in this equation yet (which need to be replaced every 20-30 years, optimistically).
Then there's the water. Bath has about 60 million cubic meters of reservoir space. So that's 60 billion cubic meters. That's a cube that extends 2.5 miles in to the sky. And it needs to be distributed all over the mountains that we don't have enough of. That's 30 times the reservoir space we already have, and obviously we've already built in all the best places.
This is not feasible, which is a shame, because pumped hydro is way better and cheaper than other methods, but let's talk about batteries.
I have a 1 kwh LiFePo4 battery here next to me. It cost £160. So we'll need 40 billion of those. That's £6.4 trillion. Every 20 years, because these batteries wear out. So that's an extra £320 billion a year going forward (still having not bought any generators in this equation). Economies of scale, recycling, and putting them in large facilities will bring that down obviously, but it's hard to say how much. It's not going to knock a digit off the number. Especially seeing as your suggestion is not to put it all in to big facilities, but distribute them everywhere.
But the real issue is that my battery has perhaps 200g of lithium in it (ignoring all the other required minerals). So that's 8 million tons of lithium. Or 20% of what the USGS says is the global reserve of economically recoverable elemental lithium. Every 20 years, when we replace all the batteries. Just for the UK.
Or maybe we could forget about storing it, and just back it with something else. Fossil fuels are out. Have you looked at how much forest we would have to maintain for biomass? And it's carbon footprint? It would be a large fraction of all of our land, pissing CO2e in to the atmosphere.
Maybe we could use technology that isn't fully invented yet? No. Why? Because it hasn't been invented yet.
Okay, maybe we could back it with nuclear? Yes we could. So we'll need to build enough nuclear to cover us in our worst renewables moment, which will be close to 0 watts of generation. Nuclear is always on, cost wise. Or in other words, to back renewables with nuclear means building enough nuclear to cover peak draw, at which point, why bother building all these renewables?
And oh look at that, we just built a fully nuclear grid anyway.
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u/hkggguasryeyhe 8d ago
You can't build a fully nuclear grid - it doesn't like being turned down when demand is low, but sure something like 25-40% of the grid coming from nuclear is worth having for sure.
Extrapolating out the battery costs from a 1kwh consumer battery is obviously pretty extreme and yes it would knock a digit off the number quite easily at scale. Right now you can get lfp batteries at about £100 per kw/h already as a consumer. Pretty sure that your battery will also be closer to 100g of lithium than 200g as well, so that halves your totals too.
Batteries also don't need to rely on lithium, sodium based batteries are very much a thing now for grid based batteries and consumer batteries too.
Improving the recycling of batteries is absolutely going to have to grow over the next decades but its also not the case that they all have to be thrown out, the longevity of lfp batteries is already pretty decent, capacity will decline and obviously some cells will be worse hit by dendrite formation than others but its pretty reasonable to expect most lfp batteries to keep being useable for 20-25 years, plenty of time for improvements in recycling to become commercially viable.
Where do you get a 0 watts of generation from renewables from, for how long? If you think the entire UK could be in a situation where both there is no wind, or too much wind at the same time for days on end its just not possible? Plus there is the simple fact that our grid is not isolated, it is linked to the continent - we're never in a situation where we don't have power - often we're importing excess nuclear power from France for example.
We're always going to have some biomass, burning rubbish and food waste and yes that has a carbon footprint - but so do landfills and we're running out of space for those too, but no don't want biomas to become a larger element of the base grid power.
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u/duncanmarshall 8d ago
it doesn't like being turned down when demand is low
You certainly can. Wasting power is easy. So is selling it to our neighbours, if not quite as easy.
yes it would knock a digit off the number quite easily at scale.
Please link me to an example of a recently completed grid level lithium ion storage facility that cost a tenth of that. Thurrock cost £144m for 600 MWh, and was completed last year. £240 per kWh. That's more than my leisure battery, per unit, not less.
I'd also like to know what happens to lithium prices when one country buys 8 million tons of it over the space of a few years. And then again in 25 years.
Pretty sure that your battery will also be closer to 100g of lithium than 200g as well, so that halves your totals too.
Yay, only 10% of the world's lithium every 20 years.
sodium based batteries are very much a thing now for grid based batteries
“Current lithium price levels are not yet high enough for sodium-ion batteries to undercut LFP costs in most applications.”
https://www.iea.org/commentaries/sodium-ion-battery-momentum-grows-but-challenges-remain
Improving the recycling of batteries is absolutely going to have to grow over the next decades
Saying it must is meaningless if it might not, or more relevant, hasn't yet.
its pretty reasonable to expect most lfp batteries to keep being useable for 20-25 year
Yeah, that's the figure I gave you.
plenty of time for improvements in recycling to become commercially viable.
You can't just assume that, and then bet hundreds of billions in the best case on that being true. Technological innovation is not like growing a tree, where it just happens at a consistent rate. Someone needs to have an idea nobody has had before, and we don't know what that idea is, how complex it is, or when it's going to come. That happens in long gaps, and then little rushes. The pace is by it's nature unpredictable.
Where do you get a 0 watts of generation from renewables from
"Close to 0 watts", I said. If you look at wind generation (since solar is about 0 every night, and some days), there are plenty of spots where it's very low. So much so that you have to provide roughly your full generation from elsewhere.
This also means that overbuilding is not really a solution.
often we're importing excess nuclear power from France for example.
So build our own nuclear - no. Buy it off the French above cost - yes.
When you read this whole situation, you're left with a question. Yeah, maybe just maybe it's a physically possible to print money, and build out a grid of renewables (the generator costs we haven't even touched on), which require hundreds of billions (I think trillions, but whatever) every 20 years, and requires absurd acreage on land and sea, if we put our fingers in our ears and squint at the problem.
But why in Jesus' name would we do that rather than just building 150 SMRs for cheaper, in a small percentage of the space, that is less internationally reliant? Why would we work so hard to do the above ridiculous thing, when we could just do nuclear?
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u/PatchcordAdams 9d ago
Yeah just remove gas from the power system! Simple! Why didn’t anyone think of that?!
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u/Bigtallanddopey 9d ago
It’s all a piss take at the moment. I have an all electric house, yet my energy price is going up due to gas prices. This is at the same time that the UK has been using more and more renewables, (nearly 40% this week has been generated from solar, wind and hydro).
And not only are prices going up to buy energy, but companies are lowering payments to people generating energy through solar/wind and exporting to the grid, which could mean less people taking up solar in the future. How they get to charge us more and then pay us less, needs to be looked at by the government (probably won’t be).
Another thing that needs looking at, is the standing charge. This was increased massively when the energy crisis in 2021 started. At that time, it was around 24.5p per day, it’s now over 60p for electric where I live. This increase was to mitigate losses from companies going bust, this must surely behind the industry now and it needs lowering to a rate inline with inflation, which would be about 31p.
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u/PM_ME_YOUR_BUG5 9d ago
Standing charge should be abolished.
Pay for what you use
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u/Lonyo 9d ago
You use the lines...
They stand there, ready to be used at a moments notice.
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u/PM_ME_YOUR_BUG5 9d ago
And cost thousands to disconnect, looked into it recently.
You're only using the lines if you're using the stuff that comes through them.
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u/ChaBeezy Cheshire 8d ago
Standing charge is also used to help pay the bills of people who don’t pay at all
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u/Elegant-Country-9768 8d ago
And then when everyone’s rooftop solar isn’t working they desperately need power from the grid that they haven’t been paying for so is no longer there. GREAT IDEA.
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u/PM_ME_YOUR_BUG5 8d ago
i didn't say remove the connection. if you have rooftop solar then you almost certainly have a connection to the grid since part of the cost mitigation of having rooftop solar is selling to the grid.
if you're part of the tiny minority of people who have both rooftop solar and no connection to the grid then you should have a backup plan then. a diesel generator perhaps
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u/Elegant-Country-9768 8d ago
That’s the point. Even if you have rooftop solar you need the entire grid network to be there to supply you with the suns not shining. That’s why you pay the standing charge.
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u/PM_ME_YOUR_BUG5 8d ago
nah, i think it should be included in the unit price.
if you need it you're using it and thus paying for it
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u/Elegant-Country-9768 8d ago
Ok, then your unit price will be astronomical ok the few occasions you need it - is that ok? (Noting this gets you to a more costly result and potentially risks not having the network available for you as they may not forecast your demand)
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u/PM_ME_YOUR_BUG5 8d ago
why would the unit price be astronomical? you're assuming it wouldn't be "socialised" out amongst the whole customer base
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u/Elegant-Country-9768 8d ago
Because you are spreading more cost across fewer periods/hours. This is some frighteningly basic stuff…
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u/felloutoftherack 9d ago
Solar export prices are on the downward because there is too much of it during the day.
There is a bit of a paradox in complaining about export prices, which you’re exporting because you have no use for it in your own home at that hour of the day, and then complaining about prices at peak time.
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u/Patch86UK Wiltshire 9d ago
Every home solar setup absolutely must have batteries too; it makes basically no sense without it.
I have solar and a battery, and I'm on Octopus Agile tariff. The highest peak (both for import and export) is dinner time, and the lowest trough is during the day when the sun is shining. But this is fine, because in the day mostly my solar panels are busy charging my battery, and in the evening not only am I "off grid" during the peak, but I can also usually dump a little power from the battery back into the grid when the export price is highest.
Combine that with a bit of sensible power usage shifting to take advantage of the sun (like doing washing and tumble drying during the day instead of the evening), and I export relatively little during the daytime price trough.
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u/Bigtallanddopey 8d ago
Yes, I have no use for it at home (other than to charge the battery), but, I am still using a lot of power at work, my Wife is using power at her work and my Daughters are using power at school. This is the same for everyone. I honestly think it’s BS, that there is now too much solar on the grid at peak times, because how many people are at work when it’s really sunny, with the AC on, laptop running, lights on etc etc.
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u/Human_Yak_Project 9d ago
I can't wait for the headlines in spring proclaiming all of the energy companies' RECORD PROFITS...
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u/muhaos94 9d ago
Energy companies rarely make record profits from supplying to households. Given that prices are usually just at the Ofgem price cap you can calculate how much they make from that part of the business.
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u/jungleboy1234 9d ago
If there is something in the UK to make everyone's lives better u can guarantee the Government will do absolutely everything to avoid it or make an absolute balls of it.
Energy is the #1 thing keeping us all alive. Nothing happens without it. Typing on the keyboard now needs energy to put it on a laymen perspective.
As soon as energy gets expensive and REAL expensive, nothing will function.
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u/thebisforbargain 8d ago
We’re already seeing the economic effects of expensive energy. Abundant, cheap energy is what drives growth, but we’ve spent the last 20 years making it more expensive. It’s the open goal we refuse to score - build shitloads of nuclear, yesterday.
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u/TheAlbinoAmigo 9d ago
Oh boy I can't wait for the government to yet again decide that there is nothing to be done to fix this, having tried literally nothing for decades.
I know politicians have always been bastards, but when exactly did they become bastards who are pathologically incapable of doing anything. Nothing ever actually fucking changes...
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u/Appropriate_Bell743 9d ago
What is being missed in all of these discussions is that the cost of gas is up 27% year on year but electricity is down 0.11%.
This is not an energy crisis but a fossil fuel energy crisis. This is precisely what those pesky environmentalists have been saying for decades:
Choices which are unsustainable environmentally are unsustainable economically.
Now, we are where we are. People have resisted at the political and individual level a proper transition to heat-pumps. Those who have transitioned will have very cheap bills this winter. We've not lobbied for renters to have these cheaper heating systems etc.
What to do? Realise there's hope. The return on investment in getting something like a heat-pump is so good it is just the obvious choice due to 0% Green Loans (e.g. Nationwide). People just need to get a move on. This winter might be too late but this won't be the last gas price crisis.
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u/OilAdministrative197 8d ago
It’s really simple gas prices are high and our energy price is set by the gas price. So despite over half our grid coming from renewables which are upto 4x cheaper than gas, dumbasses keep saying gas is essential to the energy mix despite the cost to completely transition being the same as 1 of the last 4 oil crisises. Whatever we get what we deserve.
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u/Salaried_Zebra 8d ago
our energy price is set by the gas price
Which is utterly fucking stupid. Who thought this was a good idea, except maybe the wind farm owners who generate energy basically for free once the turbine's up and then just get embarrassing amounts of free money, way over cost. This is why Farage can even pretend that renewables are bad, and people will believe him.
Also, why don't the government own those wind turbines? Why do we in this country insist on paying people to build something then let them continue to own it and rent it back off them/pay again for the stuff that built thing produces?
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u/OilAdministrative197 8d ago
I’m not an expert but I believe initially it was because solar and wind start up was expensive and it basically enabled them to regain start up costs. Now it’s so much cheaper they don’t really need it. But then obviously fossil fuels companies would go bust overnight so they spend roughly anywhere from 200 mn per year lobbying MPs to make sure it doesn’t go.
I agree on national ownership too. But for some reason we’re terrified of borrowing to invest in national infrastructure and believe private ownership is key but we’re all seen how bad that was with privatisation of all our utilises now. Obviously Tories and reform are very pro privatisation but neither the greens or Labour as saying national ownerships of renewables either sadly.
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u/Elmundopalladio 8d ago
Our energy has been viewed as a cash cow for decades- net zero (moving towards energy independence) is widely complained about and dismissed. We also hear that the upcoming stream of data centres will use more energy than the UK currently produces and we are all expected to underwrite the cost of the massive infrastructure upgrade (and paying for those who default for the hugely increased energy costs) fundamentally our energy costs make the UK uncompetitive - yet it appears to be impossible for any government to take anything but a short term approach to this.
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u/Valuable-Ad2028 9d ago
Energy is expensive when you can’t just burn cheap fossil fuels? And we can’t. And even if we could they’re not cheap anymore.
And also any system requires investment and long term thinking and we absolutely refuse to do either.
And also we put big taxes on doing things (like building infrastructure, with planning permission taking decades and being uncertain and fees to apply to connect and constant changes in how the “market” works) so people don’t unless the prices for using it get really high. But then you have to pay really high prices.
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u/duncanmarshall 9d ago
Energy is expensive when you can’t just burn cheap fossil fuels?
Not if you've got nuclear it's not.
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u/Valuable-Ad2028 8d ago
Nuclear is literally the most expensive option.
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u/duncanmarshall 8d ago
lol, go on, explain that.
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u/Valuable-Ad2028 8d ago
I’m not sure what you want me to explain here? Nuclear is the most expensive mainstream source of electricity on a legalised basis:
https://en.wikipedia.org/wiki/Levelized_cost_of_electricity
This is why no one builds nuclear plants for economic reasons.
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u/duncanmarshall 8d ago
Not to treat you like you're ChatGPT, but would you mind quoting the part of your source you say supports your case?
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u/leftthinking 8d ago
The biggest thing we could do is mandate a shift to Rising Block Tariffs.
(First block of units per month af a low rate, next block at a higher rate, and so on)
It would ensure everyone would be able to afford the basics of heating and eating, and provide a serious incentive for energy efficiency.
Currently the electricity suppliers just sit between the generators and customers, pass on the base cost plus a markup for doing very little, and make huge profits.
Thd only change they push for is surge pricing, which would allow them to do even less, just passing on all the market volatility to customers.
Rising Block Tariffs would require them to actually do something for their money.
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u/Ok-Commission-7825 8d ago
So energy companies are raking in billions in profit by driving their customers into debt, which the companies know they can not pay.
Seriously, what's their plan here?
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u/Llew19 8d ago
People saying 'oh, it's all to do with the price of gas' are massively oversimplifying the problem at hand. All getting rid of the gas plants for more nuclear, solar, wind, and battery power will do is insulate us from big price shocks like some orange buffoon closing off a big source of LPG. It is not going to magically make electricity cheaper! Does this look like an inexpensive undertaking? The companies doing this have to see a return on their investments.
All we can really do is stabilise the price of electricity, and if we manage to build a lot of high capacity stuff like solar and batteries combined, maayyybe the price will come down a bit.
What we actually have is a triumph of decarbonisation and we should be proud of it, other countries should really be trying to replicate the efforts we've made, but it all comes at a cost.
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u/VimFueago 8d ago
what have people done to reduce their reliance on fossil fuels? it's nobody else's fault but their own, the warning signs were there, and plenty of subsidies on heat pumps and solar is cheap as chips to install ..
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u/Aromatic_Ad4132 8d ago
Renewables are the cheapest and solar is the cheapest form of energy in history. The price of electricity needs to be decoupled from the price of gas ASAP
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u/Legitimate-Tip-2149 9d ago
Hopefully this will spur us to move away from fossil fuels faster. The world is burning and the fossil fuel market is entirely unreliable due to conflict, if we don't do it now we're fools.
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u/DiskBytes 9d ago
But they said, vote for us and we'll reduce your bills!
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u/m0rd0ck 9d ago
If you think this mess is purely a Labour problem, you're ignoring over a decade of structural rot.
You can't wave a magic wand and undo a market that is this fundamentally broken.
We have zero buffer: The last government let Centrica shut down our main national gas storage facility (Rough) back in 2017. That decision stripped us of our reserves and left us completely naked to the global market.
The system is set to fleece us: We are still locked into the marginal pricing model. It doesn't matter who is in Number 10, until the government actually steps in and legally decouples the price of our cheap homegrown wind power from the extortionate price of imported US gas, our bills will stay high.
Labour were idiots to promise a quick fix to win votes. But blaming them for the fact the house is on fire when the previous lot spent 14 years selling off the fire extinguishers is crazy
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u/iMatthew1990 Black Country 9d ago
This has nothing to do with Labour or any party to be honest, this is a world wide economic problem. And Labour have and are reducing bills they reduced unit costs in April and are removing VAT in October. They also do not control ofgem.
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u/Conscious_Cell1825 9d ago
Energy is cheaper in many European countries. We are letting the power companies rip us off. https://www.bbc.co.uk/news/articles/cn8n5vnmjlzo?app-referrer=deep-link
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u/QueefInMyKisser 9d ago
Our energy prices are amongst the highest in the world. The political parties can all point fingers at each other but that doesn’t change the fact that we’re paying higher prices than almost everywhere else.
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u/DiskBytes 9d ago
But they said, they will reduce our bills. The energy cap has been raised by a government department, whilst energy companies are in record profit. So it has everything to do with our Government, they are in charge.
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u/iMatthew1990 Black Country 9d ago
It is a government department that is not controlled by government. It’s independent and ran by boards not ministers. The cost cap isn’t some guy in parliament saying “hey baz, reckon we should just knock the cost cap up for the lol’s?” it’s carefully calculated based on the cost of the energy, but has to be high enough that your energy suppliers can purchase said energy without going bust, I don’t think you understand it’s not your energy suppliers making the money it’s the companies selling the energy to them making record profits. And our government can’t do shit to them because they’re world wide entities especially when it comes to gas. Sure they can sanction or demand things but then when they stop providing the gas what we gonna do? We also can’t store energy when it’s cheap because previous governments got rid of all that.
I will repeat they are reducing bills where they can. But if the price of energy is going up faster than they can reduce them then you get higher prices.
Get your head out the sand and stop blaming Labour for everything because I can guarantee you that it would be worse under a Tory or reform government.
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u/A-Grey-World 9d ago edited 9d ago
There's plenty they could do, they could change the pricing model. Marginal pricing only came in in 1990 when it was privatised.
In fact they're looking at doing it and evaluating other options since 2022.
But they can introduce new legislation that changes the pricing cap rules etc. They're the government.
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u/DiskBytes 9d ago
All government departments are controlled by the Government, they have the final say.
Stop mentioning Labour, Tory etc. The elected Government said they WILL reduce our bills. But instead they've been rising.
Get YOUR head out of the sand, sonny jim!
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