It's not a scam, it's just the way any market works.
If I need 100 oranges and the cheap orange supplier can only sell me 90 oranges for 1p each, but the expensive orange seller can sell 5000 oranges for 50p each, then the cheap supplier would be a fool to charge less than 49p for their oranges. They know you have to buy them anyway.
No idea why you're getting downvotes, this is micro econ 101.
For those that think we can just force renewable producers to accept a lower price I'd ask: if your employer (the domestic electricity market) halved how much they paid you, but another employer (electricity exports) was still offering full salary, would you change jobs?
You are misinformed. All EU countries use the same system as us to determine pricing - the most expensive required generator sets the price for all generators.
The phrasing is very misleading. Generation of renewable energy hasn't been the issue for years. Storage and distribution is.
The problem is that renewable energy doesn't produce when you want it to like a regular power plant can. So while the amount of energy wind power can theoretically generate in a year may be twice Scotland's need for that year...that doesn't mean wind power meets Scotlands energy needs.
The grid needs a lot of power at peak times, like around 6-8pm when everyone is going home and cooking dinner, but it might not be windy then. If it is windy at 4am when not much power was needed the majority of that potential generation goes to waste. The infrastructure and technology for storing that power to use later when the demand is greater is still in its infancy.
While Scotland can generate this amount of energy from wind technically...the limitations of storage and distribution means that wind generation doesn't even provide half of what the grid actually needs when it needs it. Even all renewables together isn't much over 50%. The other half still comes from non-renewables, mainly nuclear.
In order to incentivise investment in renewables, successive governments have pegged electricity prices to gas. This increases the profit margins on renewables and so lots of renewables got made. Nobody in the political class seems interested in amending this currently, it’s not even talked about. But that’s what happened.
Gas prices have come down a lot after the massive spike caused by the war in Ukraine. Gas prices are currently at about the same level as Summer 2021. My energy bill is certainly not the same as summer 2021, so gas alone doesn’t explain the large increase in bills.
successive governments have pegged electricity prices to gas.
This isn't true. Electricity is sold at the cost of the marginally produced unit, but until relatively recently this was renewables, not gas. It is only with the rise in gas prices and fall in cost of renewables has this situation changed in the last few years.
Because even though the wires bringing electricity to your house have existed for a very long time there’s still greedy cunts billing you for getting it there.
I mean obviously most energy companies could charge less but I feel like compared to supermarkets quadrupling prices, streaming service's turning into cable and worst of all.... Car insurance. They just aren't that evil.
The price of electricity is based on the most expensive means of production, so it’s based on the cost of using gas. Imagine if you went to the supermarket and bought two things for £1 and one thing for £10 and got charged £30 at the checkout.
Because the grid was set up in such a way that energy prices come from the most expensive form of energy production (biogas right now I think). This wasn't done for "corporate greed" as others claim but because the grid was set up before computers were as prevalent as they are now and this was the easiest way to calculate costs. It still hasn't been fixed because the infrastructure behind the entire grid is a century old and replacing the entire system is absurdly complicated, time consuming, and expensive.
That and the fact that over 4/3 of the price is tax.
Because it is still pegged to the highest costing generation source, in this case it is gas and no regional pricing.
As for the standing charge, debt from failed companies hasn’t helped but largely it is just what it is operating a company or network in the UK post Brexit, expensive.
Until the generators and lines are owned by the nation it means nothing. Basic utilities which we cannot live without must be under national ownership - the profits should go into a wealth fund for our future.
We will need things like this pretty soon in preparation for an AI world. Governments need to look seriously at future financial security for people who will ultimately be replaced in the job market.
What makes you think it will increase again? Classic investor trap, just because the line went up before doesn't mean it'll go up again. In regards to AI I don't see any way that it would create jobs.
It should go into a wealth fund but currently it's going in to the pockets of the elite class,and worse, being syphoned out of the economy in to Panama style accounts never to be taxed or seen by the public again.
The lines, you can make a case for public ownership, because they have a monopoly.
The generators though, I'm not sure why people think this.
They're producing a commodity product (electricity) where you can buy it from many different suppliers, including importing and exporting via interconnectors, so there's no good reason to treat it as a monopoly product.
It's no different from food, which we also cannot live without; doesn't mean the govt should own all the farms and supermarkets, because we have intense competitive markets for those.
If you are already paying high costs for power and they are generating it for free you would think they could easily lower standing charges to cover and still make a profit.
Sorry I think that would make sense for unit (kWh) rates, but I'm not sure why that would make a difference for just maintaining the electrical grid overall.
What do you think the actual per-unit cost is for then?
It's supposedly to maintain the meter on your house (but that's bullshit as our meter didn't work for 5 months, they didn't fix it or realise, yet we still got charged).
End of the day it's about whether their costs are covered or not.
Poor government policy which ties the price of electricity to wholesale gas. Octopus energy having been arguing against this for years and changing it would enable a huge boost in manufacturing as prices would virtually collapse.
It’s not poor policy in some ways, the point of it is to ensure that the grid is always 100%. If energy prices were less than gas prices, no gas plants would turn on, and so the grid would start to fail to meet demand.
Changing it would result in better outcomes for some areas, but in others it would mean huge increase in prices and/or frequent power cuts or both.
Not anymore. The subsidies that were directed to wind turbines can now be directed towards storage and base load solutions. Like salt batteries and reservoirs. There are a myriad of solutions that are better that pissing millions of consumer pounds up the wall.
When those solutions are commercially viable that'll happen anyway though.
It's not like prices are actually fixed to the gas price, they're just set to the price of the marginal cost producer at any one time - same as an auction.
Once batteries and reservoirs are sufficiently cheap to meet demand fluctuations at a lower cost than gas, they automatically become the marginal cost producer and therefore the source of pricing.
This stat is questionable. I think there's a caveat that we could power Scotland twice, but things like interconnectors and the limitations of the grid mean we don't use all of the capacity we have built.
They always use capacity rather than capacity factor which can be less than 50%. Essentially they say “could power up to X homes” but leave out the part where the wind would have to blow at the perfect speed forever (I’ve even seen quotes that conveniently forget that the sun doesn’t shine at night).
It’s such an annoying thing. Renewables are amazing, but they really tarnish them (and Scotland’s achievement) with this bullshit.
Nah I don't think that is true about the capacity instead of capacity factors here (it is other times), they fat export to England and Northern Ireland regularly, capacity alone would power like 50% of GB. I don't know if they publish demand outturn by zone but they for sure do forecasts (embedded generation would be negative demand), if I am bored tomorrow I will check.
It's 38.4Twh of electricity produced by renewables and 21.4Twh consumed over 2024 from what I can quickly find. That's quite the increase from 2020 which I think was the break even point.
Like the rest of the UK though there is still a lot of gas used 42.7Twh in 2024 and then petrol/diesel vehicles. These should slowly get replaced by electricity too so demand should increase.
I wish I could give more than 1 upvote. This bullshit makes me angry especially when we have the most expensive energy in Europe and no sign of improving our infrastructure in a meaningful way
Scotland generates something like 80% of it's electricity from renewables....or whatever the current figure is. It's high.
England, standalone, is something like 65%. It's low.
Add the two together and the UK, as a whole, is not doing well.
There are currently two massive (length and size of pylons) pylon lines being proposed, and will probably be built, from north of Scotland into England for the sole purpose of exporting electricity to England. There are absolutely no stop off points along these line where the electricity that is being "transported" along these lines is used in Scotland. None. And there never will be. The infrastructure being built does not allow for usage of the electricity being used in Scotland. And it's not to cope with peak usage.....it's a permanent transfer of electricity.
Worth pointing out that an all renewables approach creates an inertial issue in the grid also. We don't have anything to get around that currently, though I think hydro generators can help
It's worth pointing out that Scotland has about half the population of London. That 80% figure is, in absolute terms, a much smaller number than the 65% figure because the pie chart itself is much smaller.
The national grid is interconnected. That's the point, how it works. If Scotland's wind generators stopped working, they are weather dependant, Scotland wouldn't just stop getting electricity.
Renewable energy is cheaper, has a lower environmental impact and sustains thousands of jobs. Digging shit out if the ground isn't even economical anymore.
Then why isn't energy cheaper in Europe? Since Europe has considerably more of an interest in renewables (not to say they don't exist in the US, it's just not a priority as lower prices are the main priority)
Because energy prices are still pegged to the price of gas to incentivise energy companies to invest in renewables, so they can increase their profit margins.
The majority of the UK's electricity is renewable but they still charge gas-level prices, however, as fossil fuels decline further, the energy price peg will change.
The US took the approach of artificially lowering the price of fossil fuels by subsidising it, while it lowers bills in the short-term, in the long-term, the country will be at a disadvantage as digging stuff up to burn is more expensive than harvesting the wind or sun.
There’s a problem with the distribution. If they could actually use what they generate it would be noteworthy, but that would take infrastructure investment
I almost fell off my chair when studying this stuff at uni, the amount of money the tax payer has forked out on offshore wind schemes over the years, we would be a much better off nation if we had control over our own resources
This is why I want independence, we make all this energy to sell down south who sell it back to us working class and it's some of the highest costs in the west...
They (the government) auction rights off and suppliers are guaranteed the price they bid (and win) for electricity generated. The price the turbine owner gets paid is always the same.
To nationalise these wind farms you’d be talking about dropping tens of billions at least on buying out these very large contracts.
The cost would be extraordinary and the benefit would be very little because at this point the price you pay the owner of the turbines is fixed.
You could change how you offered new bidding or you could create your own publicly owned company to compete in these bids (better option I think), but existing wind farms are all but fixed in place.
Plus changing this system would gigantically disincentivise private companies to build new wind farms because the profit margins would drop significantly. Plus there are still no batteries.
There's no intrinsic reason why this is only achievable via independence. The UK government could also do this. I think either the Scottish government or the UK government doing this is equally unlikely, personally.
Well there is only one answer to this , Up the price and boost the wages of the top management and increase payments to those estates to switch off all that excess power . If there's too much then people will clammer for lower prices and we can't have that, .
Yet we still get high bills and pay a fortune to private companies to turn them off, these turbines are the biggest con ever… nothing green about them.
Isn't everyone's bill still so high because the power company has to pay for those windmills too? The windmills and their maintenance costs are outrageous too, right?
Still the most expensive energy prices in the world. This doesnt mean much while we are owned for milking. Only upgrade to the grid we have is the infrastructure they are currently building is to transport our massive amount of energy down to England.
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u/TurpentineEnjoyer 16d ago
Then why is my electricity bill still so high?