Electricity Prices.

[Diasi]

I hope that our electricity prices won't increase alongside our gas prices.

[klondike]

Considering a big chunk of our electricity is produced by gas it's hard to believe it won't.

https://news.sky.com/story/why-the-uk-producing-half-its-electricity-from-gas-12431632#:~:text=Let's%20start%20by%20looking%20at,coal%20a%20little%20over%201%25.

[Diasi]

Well I don't expect ours to increase since Shell, informed us, gloatingly, that the electricity they supply to us comes from 100% renewable energy.

If it does I can ask how much the cost of wind & sun has risen. 

[klondike]

 

I think mine is supposed to be all renewable. Not sure what fancy electronic devices there are in the grid that stops that nasty coal produced electricity getting into my kettle though.

Market forces will ensure that it will all go up by the same amount.

[Diasi]

I think mine is supposed to be all renewable. Not sure what fancy electronic devices there are in the grid that stops that nasty coal produced electricity getting into my kettle though.

Market forces will ensure that it will all go up by the same amount.

I'll await, with interest, the justification from Ofgem if it does.

[klondike]

The rise in gas price will just make those running the wind turbines even richer.

Each provider buys from particular sources. If they all swap from gas then the wind farm producers will just adjust their pricing to balance supply and demand. Them little electrons ain't painted green.

[Diasi]

The rise in gas price will just make those running the wind turbines even richer.

Each provider buys from particular sources. If they all swap from gas then the wind farm producers will just adjust their pricing to balance supply and demand. Them little electrons ain't painted green.

My understanding of Ofgem is that the price cap has to reflect the cost of generating the electricity & not be based on market supply & demand, which is why I'll be interested in their justfication reasoning if the price does go up based on supply & demand.   

[klondike]

I haven't studied it but North Sea gas just follows market prices as I understand it.

I have dug out this explanation though which does seem to be about right

https://www.thedailymash.co.uk/news/business/we-read-your-meter-then-randomly-pick-a-figure-you-cant-afford-how-your-energy-bill-is-calculated-20220204217096

[Diasi]

I haven't studied it but North Sea gas just follows market prices as I understand it.

I have dug out this explanation though which does seem to be about right

https://www.thedailymash.co.uk/news/business/we-read-your-meter-then-randomly-pick-a-figure-you-cant-afford-how-your-energy-bill-is-calculated-20220204217096

Lol, classic. 

Ofgem says "Every six months we work out how much it costs a supplier, on average, to get energy to you." so to my mind, as the cost of sun & wind is fixed & it costs nothing anyway, I can't see any reason for a sudden 150% increase "to get energy to you".

That's what I mean when I say it'll be interesting to see how any massive increase in renewable energy prices is justified.

[klondike]

Clearly it can't be. It will still happen though I expect.

[Michael Rolls]

Clearly it can't be. It will still happen though I expect.

Sun and wind are not free- there is a very considerable capital cost setting ip windmills and panels
Mike

[klondike]

Which didn't increase when gas prices did is what Phil is pointing out.

[Michael Rolls]

Which didn't increase when gas prices did is what Phil is pointing out.

Actually, he said the cost of sun and wind is fixed & costs nothing anyway. In fact turbines are still being installed here there and everywhere, so the cost is neither fixed nor zero
Mike

[Diasi]

Actually, he said the cost of sun and wind is fixed & costs nothing anyway. In fact turbines are still being installed here there and everywhere, so the cost is neither fixed nor zero
Mike

The cost of gas & coal generated energy comprises the cost of the gas & coal plus the distribution.

The cost of renewable energy comprises only the distribution since the sun & wind cost nothing.

The cost of the new installations can & will be recovered by the supply of the energy from the new installations, it doesn't affect the cost of producing & supplying the existing renewable energy.

The cost of gas & coal energy has never been shown to have increased to fund new power stations, it's always been explained as being due to the cost of gas & coal.