Alarming rise in electricity prices
Discussion
coetzeeh said:
So if most power was sold/purchased on the forward market, why has Everyone's electricity cost increased by these vast percentages?
I’m sure you’ve read all the comments and missed this…..Meeten-5dulx said:
No ideas for a name said:
Gary C said:
coetzeeh said:
UK Wholesale electricity price for Q4 was at £412/MWh yesterday (or 41p/kwh + 10p/kwh grid/green costs)
Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
half hour spot prices are meaningless in isolation.Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
It is only power companies that didn't seem to understand how it worked - or bet on static or falling prices - that bought on day ahead rates. Most seem to have run out of cash in a rising market as they are not allowed to pass on the costs.
Do you think they can get that level of accuracy 1 or 2 years in advance?
Also their is no crystal ball to say where prices will out turn.
I agree that spot prices in isolation are not the complete story, but they are a major component.
£450/MWh for winter 22 for the commodity, add another £150/MWh for the non commodity element….
OutInTheShed said:
I don't think the non-commodity element should be 15p, if the whole retail price was about 15p not long ago.
Also, most people pay the same price winter and summer, so the consumer price may look like the retailers are making a loss in the winter.
Sure it may be lower but this includes all Transmission and Distribution costs, and is a ball park.Also, most people pay the same price winter and summer, so the consumer price may look like the retailers are making a loss in the winter.
It is not going down so whilst commodity may have been circa 10p/kWh, non comms were about 5p
BsuoS has gone nuts, that much I do know!
The reforms in Apr 22 have resulted in higher distribution costs across the base and the 2023 transmission review will no doubt do th same
Upgrading the network (cost) is borne by consumers……
Meeten-5dulx said:
coetzeeh said:
So if most power was sold/purchased on the forward market, why has Everyone's electricity cost increased by these vast percentages?
I’m sure you’ve read all the comments and missed this…..Meeten-5dulx said:
No ideas for a name said:
Gary C said:
coetzeeh said:
UK Wholesale electricity price for Q4 was at £412/MWh yesterday (or 41p/kwh + 10p/kwh grid/green costs)
Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
half hour spot prices are meaningless in isolation.Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
It is only power companies that didn't seem to understand how it worked - or bet on static or falling prices - that bought on day ahead rates. Most seem to have run out of cash in a rising market as they are not allowed to pass on the costs.
Do you think they can get that level of accuracy 1 or 2 years in advance?
Also their is no crystal ball to say where prices will out turn.
I agree that spot prices in isolation are not the complete story, but they are a major component.
£450/MWh for winter 22 for the commodity, add another £150/MWh for the non commodity element….
coetzeeh said:
Meeten-5dulx said:
coetzeeh said:
So if most power was sold/purchased on the forward market, why has Everyone's electricity cost increased by these vast percentages?
I’m sure you’ve read all the comments and missed this…..Meeten-5dulx said:
No ideas for a name said:
Gary C said:
coetzeeh said:
UK Wholesale electricity price for Q4 was at £412/MWh yesterday (or 41p/kwh + 10p/kwh grid/green costs)
Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
half hour spot prices are meaningless in isolation.Spare a thought for our friends in France where yesterday Q4 prices increased to 890 euro per MWh.
It is only power companies that didn't seem to understand how it worked - or bet on static or falling prices - that bought on day ahead rates. Most seem to have run out of cash in a rising market as they are not allowed to pass on the costs.
Do you think they can get that level of accuracy 1 or 2 years in advance?
Also their is no crystal ball to say where prices will out turn.
I agree that spot prices in isolation are not the complete story, but they are a major component.
£450/MWh for winter 22 for the commodity, add another £150/MWh for the non commodity element….
So yes, they may have gotten some in covid times when it was cheap, but prob only a small percentage.
At that time demand forecasting was a nightmare….
Still 450gbp for q4 even though Putin has started flowing gas via NS1….
Mikehig said:
Thanks for the insight - tangled indeed!
There's one point where, aiui, things are not quite as you said: "Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what."
Nearly all onshore wind and over half of offshore are covered by the old ROC (Renewable Obligation Certificate) system where producers are paid the market price of power plus they are awarded ROCs: 1 ROC per MWh for onshore wind with offshore wind receiving 1.5 - 2 ROCs/MWh. A ROC is presently worth about £50.
So all of the ROC-based producers are paid between £50 and £100 per MWh on top of the market price, depending on the nature of production.
A further wrinkle: some of the latest offshore projects have declined/postponed their CfD contracts because they can earn far more selling at market price. Apparently they can choose to do this for up to 3 years.
Completely forgot about the renewable obligation stuff. Markets are not my stuff. The company makes a conscious decision to keep us insulated from it as much as is possible so that we think about Nuclear safety first rather than commercial risk but I still have legal obligations under REMIT so not totally divorced from it. There's one point where, aiui, things are not quite as you said: "Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what."
Nearly all onshore wind and over half of offshore are covered by the old ROC (Renewable Obligation Certificate) system where producers are paid the market price of power plus they are awarded ROCs: 1 ROC per MWh for onshore wind with offshore wind receiving 1.5 - 2 ROCs/MWh. A ROC is presently worth about £50.
So all of the ROC-based producers are paid between £50 and £100 per MWh on top of the market price, depending on the nature of production.
A further wrinkle: some of the latest offshore projects have declined/postponed their CfD contracts because they can earn far more selling at market price. Apparently they can choose to do this for up to 3 years.
Gary C said:
Mikehig said:
Thanks for the insight - tangled indeed!
There's one point where, aiui, things are not quite as you said: "Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what."
Nearly all onshore wind and over half of offshore are covered by the old ROC (Renewable Obligation Certificate) system where producers are paid the market price of power plus they are awarded ROCs: 1 ROC per MWh for onshore wind with offshore wind receiving 1.5 - 2 ROCs/MWh. A ROC is presently worth about £50.
So all of the ROC-based producers are paid between £50 and £100 per MWh on top of the market price, depending on the nature of production.
A further wrinkle: some of the latest offshore projects have declined/postponed their CfD contracts because they can earn far more selling at market price. Apparently they can choose to do this for up to 3 years.
Completely forgot about the renewable obligation stuff. Markets are not my stuff. The company makes a conscious decision to keep us insulated from it as much as is possible so that we think about Nuclear safety first rather than commercial risk but I still have legal obligations under REMIT so not totally divorced from it. There's one point where, aiui, things are not quite as you said: "Wind of course, operates in a very different way. Should be a price taker, but the CfD's mean they get paid a fixed price no matter what."
Nearly all onshore wind and over half of offshore are covered by the old ROC (Renewable Obligation Certificate) system where producers are paid the market price of power plus they are awarded ROCs: 1 ROC per MWh for onshore wind with offshore wind receiving 1.5 - 2 ROCs/MWh. A ROC is presently worth about £50.
So all of the ROC-based producers are paid between £50 and £100 per MWh on top of the market price, depending on the nature of production.
A further wrinkle: some of the latest offshore projects have declined/postponed their CfD contracts because they can earn far more selling at market price. Apparently they can choose to do this for up to 3 years.
I follow (but can't comment on) the Power Generation thread where there are quite a few comments about the low pricing for the latest CfD round and the rebates from a few of the later projects.
The reality which I outlined doesn't get a mention.
All of those ROC schemes are adding significantly to the cost of power which, as we all know, has escalated brutally yet there doesn't seem to be any action to redress things.
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