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Energy bills in Great Britain rise by 5% as price cap increases
(www.theguardian.com)
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this post was submitted on 01 Jan 2024
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I've still not found a satisfactory explanation for why we have our electricity prices pegged to gas prices. It seems breathtakingly stupid, not to mention infuriating. Is there any sense behind it? Or is it just more corruption as usual?
Isn't it still that around 40% of electric is generated by gas turbines?
So less than half, with more wind and solar being added all the time. Hmmm.
2023 was about ⅓, down from ⅖ the year before. The drop came from a decrease in demand, and an increase in wind and imports.
https://www.mygridgb.co.uk/historicaldata/
That's good. Each year the link gets more tenuous, but I can see that there was logic behind it however many years ago whenever it was set. Of course it'll have to get to the point where it's so totally absurd that even the Tories can't ignore it before there's any chance of a change.
Tories won't do shit. They've got an election to lose.
The electricity supply auctions need to stop paying all generators the price/MWh that the most expensive auction winner is at. For one thing, it means we're in this kind of feast or famine situation where the electricity price collapses when we have enough wind to cover demand. That kind of bimodal market is going to send companies to the wall, I'm sure.
Not sure what the right model is. The current on does have the advantage that generators really want to get into wind because the margins are so high, being able to sell for gas prices. Great, but it's at the expense of consumers. We need to balance that better.
I guess the silver lining is that it encourages investment in wind and PV.
There are two components to the rise - the consumer's gas price (which is linked to the wholesale gas price for obvious reasons) and the electricity price, which as a substantial linkage to gas because a big chunk of generating capacity is based on gas for most consumers.
The government wants to avoid more energy suppliers going out of business, so it is raising the cap in recognition of the increased gas prices.
We have a lot of gas power stations. These are more efficient, cheaper and cleaner than coal or oil and can be brought online when it's a cold, windless winter day but when gas goes up, so does the cost of electricity.
Until there's a considerable battery base installed, this is the way of things for now.