[News] Energy bills to top £4200 at the start of next year

[Weststander]

We can’t be self sufficient, which is the reason global trade exists. That has been the case for thousands of years. There is stuff we don’t have and stuff we have too much of so we trade. We actually import a very small proportion of our gas. That isn’t an EU issue. Norway would respond to the point about helping co members by asking shouldn’t the same have applied when the EU reneged on long term contracts and having done so it’s a bit rich to decide they no longer like that decision now prices have gone up.

Exactly.

But, it will take a very long time, we can massively expand nuclear and renewables production.

 

[Neville's Breakfast]

We don't need to vote for a Government to do so, the current one can do that now.

Also, I understand that the UK not being part of the EU internal energy market will affect prices, and will do even more so if the shit really hits the fan and we have to rely more on our current interconnectors...

https://www.cornwall-insight.com/divergent-electricity-prices-in-the-wake-of-brexit/

It’s a bit more complicated than that and you need to understand day ahead prices, auctions and clearing mechanisms to get the full picture. You also need to look at the change in the energy mix in the UK compared to other European countries. There are lots of proposals not least decoupling from gas powered electricity pricing. Arguments for and against.

 

[beorhthelm]

I think the UK should nationalise the entire sector and this includes green energy businesses, for energy security and to eliminate quirks such as green energy producers of electricity currently making £b's in profits (because electricity prices here are wrongly pegged to global gas prices).

green energy requires gas backup, and unless you decouple from european markets (which provide surplus demand/supply), price would still be linked to gas. nationalisation doesnt change this. chap from EDF was making this point this morning, in France the costs have simply been transfered to taxpayer. some might say thats the way to go in a crisis, will happen anyway, means more public debt if we did this normally.

 

[LamieRobertson]

It's funny how things/thinking change over time.

When Norweb etc were floated in 1990, I had little interest in it either way. I wasn't against it.

Putin's set in chain some events, which I really feel means we should have 100% state control of elec and gas supply, renewables

production.

I’ve got some of that renewable equity stuff in my ISA paying a nice 7% div

 

[pb21]

It’s a bit more complicated than that and you need to understand day ahead prices, auctions and clearing mechanisms to get the full picture. You also need to look at the change in the energy mix in the UK compared to other European countries. There are lots of proposals not least decoupling from gas powered electricity pricing. Arguments for and against.

I am not suggesting it is easy, just that leaving the EU and the IEM specifically, means that some trading is done less efficiently, and therefore more costly, and that impact would be greater if we need to rely more on interconnectors in the near future.

 

[Weststander]

green energy requires gas backup, and unless you decouple from european markets (which provide surplus demand/supply), price would still be linked to gas. nationalisation doesnt change this. chap from EDF was making this point this morning, in France the costs have simply been transfered to taxpayer. some might say thats the way to go in a crisis, will happen anyway, means more public debt if we did this normally.

Worth a read:
https://www.telegraph.co.uk/news/2022/08/20/kwasi-kwarteng-rein-green-profits-energy-price-cap-set-soar/

I think the decoupling of electricity prices from wholesale gas prices, in the UK at least, is something that should be looked at with urgency. At the moment we have the worst of all worlds where all energy costs, no matter the source and type, are priced on gas markets.

Let's not allow to Putin to screw us to a maximum extent. Let's not allow producers here of renewables to make eye watering windfall gains, we're talking £b's, from this maelstrom.

I agree that there's no such thing as a free lunch. Where Italy and Spain are making subsidies for example, or Germany offering cheap as chips rail travel to appease, there's usually a real cost.

 

[Weststander]

I’ve got some of that renewable equity stuff in my ISA paying a nice 7% div

Nationalise at a £1 per share

 

[beorhthelm]

Worth a read:
https://www.telegraph.co.uk/news/2022/08/20/kwasi-kwarteng-rein-green-profits-energy-price-cap-set-soar/

I think the decoupling of electricity prices from wholesale gas prices, in the UK at least, is something that should be looked at with urgency. At the moment we have the worst of all worlds where all energy costs, no matter the source and type, are priced on gas markets.

Let's not allow to Putin to screw us to a maximum extent. Let's not allow producers here of renewables to make eye watering windfall gains, we're talking £b's, from this maelstrom.

I agree that there's no such thing as a free lunch. Where Italy and Spain are making subsidies for example, or Germany offering cheap as chips rail travel to appease, there's usually a real cost.

yes read it earlier. might help, looks a lot like state backed futures with fixed price. when price returns to normal, they'll be getting a larger subsidy (noted at the end about existing green levy they've been enjoying) and we'll have permantly fixed higher energy prices. this is probably the future though.

doesnt really get round the core problem market pricing. example of US, they arent seeing the same problem because they arent tightly coupled to another market, their gas is kinda stuck (they do export some as LNG). those interconnects between us and France, Netherlands, Norway tie us to europe prices, unless we cut off with the risks that follows (cant sell/buy surplus) that isnt going to work.

 

[Neville's Breakfast]

I am not suggesting it is easy, just that leaving the EU and the IEM specifically, means that some trading is done less efficiently, and therefore more costly, and that impact would be greater if we need to rely more on interconnectors in the near future.

I just don’t know. More volatile pricing certainly but that could mean higher or lower prices. It’s very difficult to demonstrate either way given what else is going on in the market.

 

[Weststander]

yes read it earlier. might help, looks a lot like state backed futures with fixed price. when price returns to normal, they'll be getting a larger subsidy (noted at the end about existing green levy they've been enjoying) and we'll have permantly fixed higher energy prices. this is probably the future though.

doesnt really get round the core problem market pricing. example of US, they arent seeing the same problem because they arent tightly coupled to another market, their gas is kinda stuck (they do export some as LNG). those interconnects between us and France, Netherlands, Norway tie us to europe prices, unless we cut off with the risks that follows (cant sell/buy surplus) that isnt going to work.

Digressing, I've read non-political pieces recently on how the US is set fair economically. Largely energy independent unlike Europe outside of Norway, low energy prices, not reliant on Ukrainian wheat and food staples, the other side of the world from where Putin may deliberately cause radioactive fallout devastation at nuclear power plants.

Europe meanwhile

 

[Thunder Bolt]

Will charging electric cars be rationed in winter or will there be power cuts?

 

[pb21]

I just don’t know. More volatile pricing certainly but that could mean higher or lower prices. It’s very difficult to demonstrate either way given what else is going on in the market.

Things I have just been reading all suggest/say it would be higher

This means that trade across electricity interconnectors with the UK will continue, although less efficiently when compared to the single system used inside the EU.

https://energy.ec.europa.eu/topics/...rtner-countries-and-regions/united-kingdom_en

Could leaving the IEM lead to blackouts?

In a word: No. But it does make keeping the lights on trickier and more expensive.

https://unearthed.greenpeace.org/2018/06/14/brexit-eu-internal-single-energy-market-interconnector/

GB’s internal and cross-border trading has temporarily been decoupled from European markets.

This is expected to result in less efficient trades

https://www.cornwall-insight.com/divergent-electricity-prices-in-the-wake-of-brexit/

Maintain access to the IEM, and little changes. UK consumers would continue to benefit from access to lower wholesale prices in many neighbouring countries, as well as increased diversity (and therefore security) of supply

https://assets.kpmg/content/dam/kpm...rexit-implications-internal-energy-market.pdf

And all those are only related to increased prices, nothing to do with decreased energy security, which would further increase price if we have to rely on interconnectors even more.

 

[LamieRobertson]

Nationalise at a £1 per share

Currently trading at 120p to sell

 

[Neville's Breakfast]

Things I have just been reading all suggest/say it would be higher



https://energy.ec.europa.eu/topics/...rtner-countries-and-regions/united-kingdom_en



https://unearthed.greenpeace.org/2018/06/14/brexit-eu-internal-single-energy-market-interconnector/



https://www.cornwall-insight.com/divergent-electricity-prices-in-the-wake-of-brexit/



https://assets.kpmg/content/dam/kpm...rexit-implications-internal-energy-market.pdf

And all those are only related to increased prices, nothing to do with decreased energy security, which would further increase price if we have to rely on interconnectors even more.

I’m guessing the Government agrees with you. Haven’t they been in talks to rejoin ? I’m not sure about your point about the interconnectors. They are a part of our energy infrastructure regardless and are a good thing rather than a bad one. They enable energy trade.

 

[Neville's Breakfast]

Will charging electric cars be rationed in winter or will there be power cuts?

There is talk of rationing in Germany although that would be business rather than residential. Not sure about here although I did read this about planning;

https://www.bbc.com/news/uk-politics-62604653.amp

 

[pb21]

I’m guessing the Government agrees with you. Haven’t they been in talks to rejoin ? I’m not sure about your point about the interconnectors. That is a part of our energy infrastructure regardless and are a good thing rather than a bad one.They enable energy trade.

I am not sure about plans to rejoin the IEM, although just reading about it now I saw some reference to the European Court having involvement in it, which wouldn't go down well...

I absolutely fully agree about the interconnectors.

Making it more difficult and costly to use these today, and even more so in future with an increased number and/or reliance, is completely bonkers, and one of the main reasons why I don't think we should have left in the first place, but I will say no more about that!

 

[Neville's Breakfast]

I am not sure about plans to rejoin the IEM, although just reading about it now I saw some reference to the European Court having involvement in it, which wouldn't go down well...

I absolutely fully agree about the interconnectors.

Making it more difficult and costly to use these today, and even more so in future with an increased number and/or reliance, is completely bonkers, and one of the main reasons why I don't think we should have left in the first place, but I will say no more about that!

From last year;

https://www.reuters.com/business/en...g-back-into-european-power-market-2021-09-30/

To be clear though the interconnectors are being fully utilized whether in or out. The systems are simply different.

 

[pb21]

From last year;

https://www.reuters.com/business/en...g-back-into-european-power-market-2021-09-30/

To be clear though the interconnectors are being fully utilized whether in or out. The systems are simply different.

Well, that sounds promising, although it doesn't sound like talks to re-join as such, rather "...a consultation on ... how to realign its electricity market more closely to Europe and improve cross-border trading".

I know the current interconnectors are being fully utilised, we are a net importer, it just seems we are paying more for the privilege. The amount we import has the potential to increase significantly too in the near future, if gas gets low...

The other main issue, other than the inefficient market / higher prices, is future expansion, with diverging standards, it will be more difficult to get these things up and running, although not impossible.

EDIT: the Government consultation paper is here:

https://assets.publishing.service.g...wholesale-electricity-market-arrangements.pdf

 

[KZNSeagull]

"Tariff Deficit Fund" finally being reported on the news. Prices capped at current level or slightly higher, fund covered by banks in short term with government guarantees. Questions remain over who will ultimately pay for it - windfall taxes, levies or general taxation. But at least a plan is now being mooted more widely.

From the Beeb:

"Energy bosses are becoming increasingly vocal with their ideas for staving off an energy price emergency.

Keith Anderson, the boss of Scottish Power, is going to present his £100bn plan at a meeting with Scottish First Minister Nicola Sturgeon later.

It's a scheme that he has already run past Business Secretary Kwasi Kwarteng, who is tipped to be the next chancellor if Liz Truss is prime minister.

So how would it work? The plan would involve the government guaranteeing loans to the energy companies, enabling them to keep bills frozen while still forking out higher prices for wholesale gas. The so-called deficit fund would be repaid through bills over the next 20 or so years.

Energy companies want to see more action on this. They are urging members of the next government to treat the energy crisis as it did the Covid pandemic, requiring similar levels of intervention. The furlough scheme, for example, paid the wages of 11 million people and cost around £70bn."

 

[Wardy's twin]

Gaining independence did not mean decoupling from global markets. Economic isolation has never been the aim of any independence movement ever. It certainly isn’t for the SNP for example.

if you can't control your position in the global market it means you don't really have independence you do what others want or make you do.