As someone who works in the energy sector, this is one of the videos I clicked on immediately,. Overall, I think Simon did a fine take on things. The relationship between grid congestion and the energy market is really simplified but it's fine. What surprised me was the electricity price comparison to other European nations and the following criticism on marginal pricing (pay-as-clear). Those nations are following the same market model, so the electricity price difference can't be due to marginal pricing being used. While marginal pricing seems very odd and old-fashioned it's actually the renewable generators that benefit the most from it. (1) While variable costs of renewables -- i.e., the costs to produce a unit of energy, especially for wind and solar -- are almost zero, marginal pricing ensures that renewable power producers receive the revenue they need to cover their fixed costs. Whenever the clearing price is higher because bids from peakers are also accepted , it's the renewable projects that generate the most additional revenue. (2) It negates unnecessary speculative bidding. Marginal pricing (pay-as-cleared) allows producers a no-regret bid as low as they can to just cover their variable costs. If their bids get accepted, they get to cover their marginal costs or get more, depending on the demand. With a pay-as-bid model, producers would try and predict hours of high and low demand to set their prices accordingly, because why bid low when you're sure you can get more? That way, marginal pricing allows for cheap renewable generation to almost always get a sale, making the power mix greener in the process and keeping the market close to the true cost of energy. This is probably too long for RUclips, but the problem -- at least for the British energy market -- is correctly identified in the video. The gas power plants set the price too often because there's not enough renewable generation (during off-peak hours). If you get more renewables into the grid and ideally make them flexible enough (storage) so they give off their energy during peak hours, electricity prices will tumble -- at least in the short to medium term.
Is there enough competition between peaker plants to keep profit margins low and prices reasonable given the cost of gas? Or are they colluding to keep prices high and maximise profits?
@@adrianthoroughgood1191 Also working in the electricity sector. Electricity pricing is one of the most highly regulated areas of the economy both in the UK and in Europe. It is highly unlikely there is any collusion. He mentioned it in the video, but introducing electricity pricing regions would be a great idea for the UK and being them in line with the rest of Europe. (Though it wouldn't necessarily resolve the issues raised in the video)
The grid itself is a $TRILLIONS infrastructure investment that needs cashflow to the owners. ROI, return on investment. This is a fixed cost and owners are entitled to maximise profits or at least get a minimum cashflow, minimum ROI. As demand peaks, supply $kWh prices peak. As demand falls, the fixed costs of the national electrical grid would have to be recovered by higher $kWh supply prices. I see my feed-in 5cents kWh and my supply 50cents kWh which reinforces the reason for even dirt cheap nuclear electricity is expensive to the customers. Grid costs are not trivial.
The one good thing about the existing price market for energy is, if you produce cheap electricity you sell it incredibly expensively. Meaning there is a big rush to go in for renewables and batteries.
Yep. The problem is that this isn't actually a good way to invest. For instance, increasing renewables will drive baseload fossil fuel generation (e.g. coal plants) from the grid. But that makes gas turbines even more important because more renewables means a less controlled and more variable supply, that has to meet an already pretty variable demand. So the market will drive the grid towards a mix of more renewables and more gas turbines.
It also means there is no incentive for energy companies to find cleaner alternatives to the gas peaking plants as they are the ones that maintain the high prices
Would this encourage batteries? this only encourages generation thats cheaper than gas. if something is more expensive then it will never get used. further, if the winds blowing in the morning, its more profitable for the wind turbines to sell to the grid, because their price is artificially propped up by gas, so theres no point saving that electricity in batteries, until the wind dies down and prices increase, because they won't. In a situation where the grid is dominated by wind, and no gas, the current situation could work, youd have extremely low prices when its windy, and extremely high prices when its not, that would provide opportunity for arbitrage. another problem is that as wind power increases, you get less and less gas generation, so the gas plants need to charge more per unit of electricity to cover their costs. That works to a point, but in a situation where you only need gas to cover that one windless week in january, it isn't going to work, so eventually were going to have to move to a system where gas generation is basically a backup, and funded just to exist, just in case. Basically I think you probably want a system that divides gas generation from everything else. Gas plants can be moved to a system where they are paid to exist, as a backup, and the main (renewable) grid finds a balance.
Good point. Those are a great incentive but at the expense of the consumer. In many ways this is a market failure - national level planning of energy production suddenly seems attractive. (That suddenly gets political!). p.s. some of the other replies are spot on as well.
Great presentation. A few items: > Here in the USA I am a member of an electrical cooperative. Over half of the land area of the USA is served by energy cooperatives. American energy cooperative were created to serve rural areas not served by municipal or private providers. >Also, there is also the option of community energy projects which are mostly solar. > I would also like to mention the developments of enhanced geothermal. If things go well electricity from geothermal will provide a carbon free baseload. The heat deep in the earth comes from decaying uranium. So, in a way the earth is a nuclear reactor. >The issue of decentralizing a centralized system will require a renegotiation. Edited Note: The word "Cooperative" might have different meanings between its use in UK vs USA.
Re geothermal there is a company called quaise energy testing to commercialise gyrotron drilling to vaporise rock which will hopefully make geothermal viable virtually anywhere on the planet. Current drilling is limited to shallow depths and thus limited in location. This could be game changing for clean energy.
Yeah millimeter wave drilling by the company stated by the above guy looks promising. Quasi Wave or whatever. I hope they combine that drilling tech with the other tech that allows closed loop systems for geothermal. I don't like the idea of just shoving water deep down letting it turn to steam. Lots of nasty stuff down in the ground, and it can come up by the pressure to pollute ground water. We also have solar pervoskites coming soon. One company called Oxford Solar is making hybrid panels now which are much better than any other one on the market. So geothermal and solar with batteries will be the future. If nuclear doesn't finally take off. Battery storage is becoming significantly cheaper each year. Kinda crazy how fast it is dropping. I also seen a new tidal system that looked promising. Yet my hopes are slim on tidal ever being affordable versus other sources. At least it is an option with theae 1,000 KW sized buoys I think they were.
@@David-bi6lf Yes, Thank You. One could say that geothermal is a hot subject. There are a number of technologies being developed. Time will tell on which ones will work out best. I could mention a number of startups, but just one is Sage Geosystems out of Huston Texas. Cindy Taff is their CEO and I like what she said in a RUclips interview titled: Geothermal is Having a Moment, Can it Deliver? Ep179: Cindy Taff
@@Bozebo Well, if the earth's heat did NOT come from radioactive decay, earth would be dead and nearly as cold as Mars. Now its a bit uncertain with gargantuan error bands but current estimates is that radioactivity accounts of 1/3 to 2/3 of the excess heat. That heat balance is still less than 1% of the earths heat radiated to space. Rest of course is the sun.
I meet Ripple Energy at the london EE show. I liked the idea, but then everyone at the stand claimed not to know what LCOE was, and also couldn't explain how buying generating capacity equal to 120% of my home's needs translated to only a 25% saving on my bill. IMHO it's a pretty big red flag that the company representativers don't know fairly basic electricity market terms, and also don't seem to understand how their company works. For the record, the 3.5kWh system discussed in the video would be slightly over twice the price of what Ripple quoted me, but would bring my bills down 80%.
It is a slightly complicated model but there are some good explanations on their web site and FaceBook comments. Basically you receive payment for the electricity that your share generates at the *wholesale* price (which is what the cooperative receives), which is a lot less than the retail price that you pay. As you say, the returns are quite low compared to having your own solar. There are other cooperatives that have much better return.
@shponger-q7o Fair enough, but marginalised pricing means that at least some of the time, Ripple is paid ~13p per kWh, because that's the LCOE of gas, which sets the market price. So if maintenance et all is 2p, you should be credited with 11p. (And what capital costs? Surely that's what you pay for?) Maybe it all averages to 25% over a year... Though I wish there was more hard numbers and less guesswork on their page, and show stands.
@shponger-q7o Regular plants need to factor in capitol costs to LCOE because it's a loan they need to repay. But for Ripple it isn't. The upfront 'membership fee' quoted on their website is within the range of values for the total capital cost per kW of building a wind turbine. If you have already paid the capitol costs (and it very much looks like you have) they shouldn't be charging you for it a second time. If there is a regular investor that makes up for a shortfall of private membership fees, then their repayment comes out of their share of the turbine or solar plant, not yours.
@@anticarrrot Ripple are not involved in the spot market. They have Power Purchase Agreements for 6 month or 1 year periods which are a fixed price for every kWh. They do benefit during price hikes because they can negociate a higher price for the following year, but this has nothing to do with marginal pricing.
The problem with Ripple is that you sell kw at market wholesale price, say 5p per kw, but are charged at 28p per kw. So even when you buy 100% of your energy bill, you actually only save a % of on your electricity bill, typically 10-20% off your bill. Despite this sounding negative, I have done this, more as a point of principle than sound investment. If you look to save money, far more effective to put money into a battery limked to a cheap tariff, then possibly solar. (battery first, as in winter, when usage is higher, it delivers savings. In summer, panels are great but same panels fairly useless in November, December, January.) Again, I have a full array of panels, and 14kw of battery storage, which I charge overnight in winter at 7p per ke enough to last the entire day. In summer, overnight charging isn't needed, panels run house, charge house battery, and then trickle feed my car)
I think that your analogy of mixing Cocktails to explain the energy market was excellent. Most of my career was in electricity generation (coal fired and nuclear) and following privatisation, the companies would offer their generators to the grid (zero bidding?) such that they would be paid the same for each MWh as the most expensive generator on line. A nice little earner for some. This is all that many of today's population know as the norm. However it wasn't always run like that. The National Grid, which was part of the CEGB, used a table called the Merit Order which listed each individual generator and its cost of generation. Apart from specific areas where security of supply would mean out of merit generation, each generator was synchronised to the grid as required, according to its position in the Merit Order thus ensuring that the cost of supply was kept as low as practicable. In the power stations, we responded to directions from Grid Control, and never had to deal with financial bidding in the event of a reactor trip. It was better for the consumer and cheaper, too. No shopping around for deals very year or two. One bought electricity from the electricity board, gas from the gas board and water from the water board. Simple, effective, and not the rip-off that has happened since privatisation.
You assume that had the grid not been privatised the government would have been rushing to invest in the grid as a private investor would, even though we are one of the lowest countries for investment in the OECD group. Those higher prices are paying for the infrastructure as well, the profits that these private companies generate, which can be excessive (particularly in the past 2 years) is because the government regulation allowed this and kept the system the same. The government could have reformed the system 20 years ago, yet it didn’t, which is reflective of the performance of our government & the regulators. There have certainly been benefits to the privatization and the competition that it indroduced which increased productivity, efficiency and innovation in the Uk energy sector. Renewables being the biggest highlight. Don’t assume it would be better off if privatization didn’t occur, that’s nostalgia. Often the comparison is made between the UK government and others in Europe, but how those governments institutions run is different to the UK and crucially the amount of tax they collect (particularly for France & Denmark) helps paint EU countries in a better light when doing a comparsion. That's not to say privatisation could have been done differently, though I would argue reforming how the UK government runs in general is a bigger priority (particularly productivity, transparency & digitalization) and if the uK gov was reformed done, then it would bring down the differential between a government owned company and a private company. While I may argue that for energy infrastructure, I don’t for water companies as there is way no way for competition to occur in that market unlike the energy market.
@@OkamiPara Investment in the National Grid was continuous before privatisation, as it was also in power stations. The collapse in a steady stream of orders led to the loss of British manufacturing industry. The large items of generating plant now come from France and Germany. This belief in consumers getting better value from competition in the energy market is ridiculous. Furthermore the assets were sold at a knockdown price below their true value. Almost the entire energy supply networks is now under foreign control. Wonder why the UK is going down the toilet? Having to be nice to the foreign owners of our industry (recent example P&O/DP World).
How would you see a Merit Order system working in today's market with such a fluctuating supply coming from the 40% renewables? Would we have to use those as the base line and then work the other plants around them? Meaning a much higher polling rate to change production levels
@@thesherbet > How would you see a Merit Order system working in today's market with such a fluctuating supply coming from the 40% renewables? Of course, I am not MervynPartin, but it seems to me .... make intermittent RE generators like wind/solar provide dispatchable power! If THOSE companies have to invest in storage to make the happen - so be it. Why do you presume the problems wind/solar create should be solved by the rest of the grid? Why do you presume wind/solar should get first crack at fulfilling the demand load? If you ran a lunch counter, would you put up with, no matter how cheap, an employee who sometimes did and sometimes didn't show up for their shift at 10-2? Would you fork out a little more for the reliable employee who always showed up?
I signed up with Ripple a while back, I won't start to see returns until the Derril Water solar park comes online this winter though, but as a renter, it's nice to have an option.
There’s a potential middle ground between single-home solar and co-operative projects. Many homes in the UK are owned by Housing Associations, (basically a job the councils used to do, farmed out to, I think, a non-profit). The UK government could design financial channels to give UKHAs interest free loans to install local generating/processing plants in or near the enormous estates of houses/flats owned by HAs and fit solar to all the local properties. The tenants wouldn’t have to pay, but would benefit from a communal source of renewable power and the government could rightly claim the renewables against their targets.
Germany and much of the EU have the same market design for electricity. While it has problems, when peak plants run often it, the reason for marginal pricing is that you need these expensive powerplants for a functioning grid, because production must always match demand. So only paying a proportional price would basically mean nobody builds these plants because it wouldn't pay. Pricing zones may help. Another idea is a capacity market where a gas plant receives some amount per MW (power) that it is possible to produce (just in case) - seperate from the electricity market. This would either be paid by taxes or some added component on the elecrity price. Another problem is redispatch, when to much e.g. wind energy is produced locally and can't be used/transfered. Then some wind turbines have to be shut of, but the (already sold) electricity has to be provided somewhere else on short notice - mostly gas plants.
Do you not understand what he is saying? The fossil plants get paid marginal price. It's the variable renewables who get paid way above what they deserve, it's a giant subsidy to uneconomic wind and solar and against fossil plants, destabilizing the grid.
it's a pity that although energy sale price is set with marginal pricing, production isn't paid the same. When we had a windmill we were paid 3p/unit delivered to the grid but were paying 15p/unit received from the grid. that 500% difference seems a lot, and shows the inconsistancy of pricing.
I thought you would cover Octopus Agile electricity tarrif, as that is such a quick and easy way to halve your electricity bill as well as helping peaker plants to stay offline.
I recommend everyone in Britain read a fair and reasonable Money Saving Expert review of Octopus Agile (not applicable to those elsewhere), See " Octopus Agile - is it now an energy tariff worth switching to?" Definitely one to out in your top 3 ...
I have PV and invested in Ripple - ironically the Kirk Hill project that was delivered late and cost more than expected pays a measly 3.2p/kWh - I halved my electricity import with PV and have reduced that even further with battery storage- import is down to around 175kWh/yr but with the standing charge that then equates to £1.20/kWh - unless I massively increase my PV and battery storage I am getting shafted the harder I try 😳
Uk just converts coal fired power plants to wood pellet fired power plants and slaps a green sticker on it saying its renewable. The wood pellets are manufactured in Canada.. The carbon used for manufacturing and transporting by several ships and trains every week is not included. It actually takes twice as much wood pellets as coal to achieve the same energy output! So, that carbon figure is inaccurate.
I've been to the places where the wood chips are produced, the carbon for shipping and transportation is included and shipping has the lowest carbon intensity of any form of transport per tonne transported.
Another nice side effect of this cooperatives, that comes to mind: It's non-profit (kind of, I guess). So, less billionaires, that laugh their asses off by ripping us off.
Honestly, I'm suspicious of Ripple and other companies like it. The power cooperatives which make the most sense (to me at least) are local.... basically a neighborhood or town level thing. There does seem to be a niche for a company which would organize and manage those sorts of projects though.
A point to raise is, as I understand it, a physical issue with the grid. As it was originally established electricity was carried from power plants, particularly in coal producing regions, and transported to homes. Power was generated in a few central locations and distributed. The locations where renewables projects are most viable are not always going to align with where the old power generation was, so there now needs to be work expanding the capacity of the grid in these areas. Renewables projects can also be close to homes and widely distributed. The grid no-longer just carries power from plants to homes, but has to take electricity flowing in the other direction too. Homes can now be net generators and that means more work on infrastructure to accommodate this.
The same thing happens in Greece. the price is calculated on the gas ,and traded on the "market" ,that only has 4 suppliers who have formed a cartel. Nationalization is the way forward.
Let's not forget that burning methane ('natural gas') for electricity has been found to be likely worse for the climate than coal thanks mainly to leakage during production and transport (anything above 3-4% loss puts it worse than coal - it's estimated 5-8% may be standard and some producers may be significantly over 10%). LNG in particular has up to 30% more climate impact than coal on average.
Sounds like the UK "just" needs more energy storage, so that the energy storage can take over the role of setting prices from gas when variable renewables are varying downwards. In a solar dominated grid, batteries with 4 hour storage are very profitable in this role. Dunno about wind, possibly you need longer term storage for that, but pumped hydro works. Hydro power usually gets a bad reputation because it destroys river ecosystems, which is fair, but if you just want storage (not net energy generation) then you can use off-river sites. Some countries are starting to use disused mines for this, presumably some of the UK's old mines could work (they already have detailed geological surveys because of all the mining...)
The problem with pumped hydro for us is partly geography. Upland areas in the UK, _especially_ those with large bodies of water conveniently situated, are almost entirely in the north (either the north of England or in Scotland) which is _not_ where most of the population (and so energy demand) are. _And_ we just don't have that many. (the same is broadly true of former mines BTW though I haven't really looked into mine based pumped hydro so don't really know enough to judge their feasibility in general)
And the other hydro electric projects that probably get a bad press from an ecology perspective are tidal ones, especially those looking at the Bristol Channel as a power source, e.g. Swansea Lagoon, the Cardiff equivalent, or the Severn Barrage. There is a LOT of energy storage in the Bristol Channel, with predictable timing (unless something nasty happens to the Moon).
Uk 🇬🇧Switches from coal to natural gas to stabilize electricity grid. ---The UK's electricity mix in 2024 from zero-carbon sources(Nuclear, biomass, hydro, solar and wind) is 51% of the electricity used" China🇨🇳, nah we just use coal to stabilize our electricity grid. ---The china electricity mix in 2024 from zero-carbon sources(Nuclear, biomass, hydro, solar and wind) is 40 % of the electricity used"
We're not at the point where we need lots of storage quiet yet. Gas and wind each provides about a third of our power. Even the solar peak only reaches about a third of the total. There are a few times a year when we use very little gas, but I don't think we've managed an hour without gas yet. Right now, we mostly need a lot more renewable power.
6:24 a few years ago we had ONE OCGT (Open Cycle Gas Turbine - peaker - power station, Indian Queens, used to support Cornwall's peaks) Now we have THIRTY THREE ( of a total 402 power stations), most of which burn Diesel. 😢 Source: Gridwatch UK
You can build diesel back up power quite cheaply. Let's face it, we're not getting battery storage backup, all your other technologies are unproven, and probably unscaleable. So we'll spend a fortune burning diesel for electricity, and it gets worse, the World is running short of diesel. Hydrocarbons is increasingly made up of condensate and NGL's, you don't get much diesel refined from these. If you think diesel generation is expensive now wait till you see what's coming. The sensible thing to do would be to build more Gas fired power stations, and invest in our own methane production. But our Green idiocracy don't permit this, consequently we'll get something worse, diesel generators; more polluting, more expensive, less reliable.
Gridwatch's list of power stations also includes coal, so it's not up to date. The price of diesel is set by OPEC+, and it doesn't have the added efficiency of a combined-cycle power station, so diesel generation is only used in unconnected grids (like Hawaii) and oil-producing countries.
But then how is it possible that electricity is so expensive in the UK? In Europe it cost just 7-8 cents to generate a kWh from diesel. Explain to a Swede When it’s really cold here in Sweden we have old oil plants fired up to drastically lower the price.
Solar PV panels with battery at approx 12k, are good value compared to a new kitchen or bathroom, or a conservatory, especially as they are an asset that pays for itself, as opposed to other home improvements that are a depreciating liability.
@@adrianthoroughgood1191 they got it from weezy waiter, I'm pretty sure he's patient zero on that, but the vlogbrothers would be the super spreader event
WheezyWaiter came up with it, and still uses it. He did a day in the life with John Green a few days ago and John says that he got it from Weezy. @@adrianthoroughgood1191
@@adrianthoroughgood1191 In a video with WheezyWaiter (titled "A Day with John Green", posted on WW's channel 27 Sep 24), John Green reminded us about three minutes in that it was actually coined by Craig Benzine (AKA WheezyWaiter). A video of Craig's from 9 Mar 09 called "The Point of Yes Return" in which Craig uses it is linked in the video description. While the vlog brothers probably use it more frequently than most, I've definitely seen other RUclipsrs from the same period use it. It seems to be less common now, but the number of people still doing RUclips from back when it was more common are a tiny fraction of today's RUclips creator population.
Marginal pricing is excellent over the long run, because when you pay the same price to all suppliers, the lowest cost provider (wind and solar) will have the largest profits. That means more batteries, wind and solar will be built, and soon we won't need the gas peaker plants.
I assumed this video would be about energy storage and grid inertia, two very important, boring, and incredibly solvable problems with conversion to 100% green/renewable/intermittent power. Grid inertia is why you hear some energy regulators saying it's "impossible" to add more green energy to a given grid, because they're attached to a specific ideology for how that's provided.
As someone who has kept up with the rise in solar. It is weird and incredibly wonderful to hear people just casual say "renewables are insanely cheap." like that's just the way things are/have always been. It's genuinely beautiful.
@@Kian139 Could I please recommend looking at Octopus Flux tariff. It helps balance the grid over the day, and also helps battery owners make money. Basically, instead of large industry owned batteries, individuals have batteries that help them store their own solar produced energy which can be used overnight, and also import at low price times (early hours) and export at peak times (16:00 to 19:00) in effect flattening the variability of renewable energy and making money at the same time.
@@Kian139 Simon Clark has a video on this too. TLDR even including storage solutions renewables are still so much cheaper than gas or coal. Have a look on his channel for the video; it's claled something like "What is the cheapest way to beat climate change?" he does a good breakdown on all the costs including installation, storage etc.
Renewables win when they are sufficiently over built to supply 100% of demand year round. The challenge then becomes how to use and sell the excess power without more craziness in the pricing structure.
I mostly use Ground News to check what different perspectives are saying. As a result, Ground News thinks my 'blind spot' is articles that align most with my actual views and biases 😂.
Do also remember, if you watch FaceBook at all, they have promised to make you the best by supplying down your chosen avenue; this could be your antidote... unless you actually want to get away from some kind of addiction; in such a case it is likely FaceBook will keep drawing you back in, deeper and deeper AND more frequently, as THEIR business model and THEIR success depends on this!
Interesting study on the imported lpg gas in which the true environmental cost of producing and transporting isn't taken into account in our carbon intensity. This actually points that lpg is overall worse that coal.
This is how it works in Sweden as well. And we are the largest energy exporter in Europe. I think you can imagine that people in sotuhern Sweden gets mad when we export A LOT of cheap electricity to countries like Germany because they destroyed their energy grid by shutting down nuclear power plants, and then we need to fire up emergency oil plants to meet demand in southern Sweden, and BOOM suddenly all electricity cost is based on the emergency dirty oil plants. Great. Gotta love capitalism 💁♀
important to understand the the UK grid is not "broken" - it has never been more reliable. Pricing structureas are about regulation and not the operation of the grid. Most people are not interested in how electricity is generated so long as it comes out of the wall when it is needed. Fully automated smart grid systems need to be as unobtrusive as possible and should not need a STEM degree from Oxford to understand.
The UK failed to move forward with renewing it's grid. (Expensive and is making some voters mad. ) Then they failed to contract and build up offshore wind power ar prime locations to really good prices and conditions.
It's possible you're getting mixed up with _onshore_ wind ? That was indeed effectively "banned" in 2015 by David Cameron, the then Conservative Prime Minister (it wasn't _actually_ banned but a policy was introduced that meant a _single_ objection to a wind turbine worked as a veto, resulting in an _effective_ ban because it's rare for literally _no one_ to object to, well, pretty much anything :). Last year the then (also Conservative) government removed that provision so, hopefully, UK onshore wind can start expanding again.
Huh. The UK is a leader in wind and solar. Much of the profiteering goes into more solar. Look at Google maps, there are solar farms everywhere, and we're building more.
@@Samark-J We are, but we're also falling behind the targets the government set themselves. The last time they offered rights to build off-shore wind farms, the price they offered was so low that no one bid for it. We were hoping to have mostly renewable electricity by 2030 but it's now unlikely.
Effectively it’s a big pile of sand that soaks up heat. Thermocouples to get the energy back out. The output is not linear. They lose heat steadily. To make them work you need a lot of cheap electricity to heat them up to begin with. You need absolutely massive sand storage units to get even small capacity. The only good thing about the high price of electricity is that lithium battery storage is viable - at some risk of unquenchable fire, and probably only with a decade of life.
Even with an Energy Cooperative you will still need the Gas or Wood burning (Drax) CO2 generating peak electricity when the sun doesn’t shine (every night) and the wind doesn’t blow.
Another way to get around the prices set by gas is a dynamically priced contract based on the hourly day-ahead market prices. Gas plants typically set the price during peak hours, because that's when they run. In a traditional contract, those peak hours typically determine the overall price of electricity. But with a dynamically priced contract, you also get access to the lower (sometimes zero or even negative) energy prices during off-peak hours.
@@Kian139 I charge my EV during the low cost periods. This significantly lowers my average cost per kWh. Over the last 12 months, I saved 430 euro this way.
@@wcoenen good for you. That does not change what I wrote. Peak hours will always be a thing. You can have someone average the cost for you. They will charge you a fee for it and they will know that it will disincentivize you from moving consumption away from peak hours and they will charge you for that too. The only function of a high price during peak hours is to make people move consumption away from those hours until demand matches supply.
@Kian139 yeah that's exactly the goal. By moving consumption away from peak hours (especially things that use a lot of energy like a car) you'll lower your average energy cost. Because fixed prices don't have this incentive, they should be more expensive.
@@AykevanLaethem but you cannot remove the peak. People still prefer to consume power at peak hours despite the high prices. I don't believe charging contribute much to peak load to begin with. Are you arguing my case for me?
Big fan of ripple and have shares in a few of their projects. Having said that if you own your own home installing your own solar will be a better investment by far.
The supply companies are raking it in so of course they and by extension the government don't want it changed. Most of my utility bill is standing charge anyway meaning if I stopped using electricity and gas all together my bill would largely stay the same. "In the future we'll have flying cars" no we just have to pay just to exist.
May I ask a couple of observational questions based on every day weather:- What factor affects the temperature conditions experienced in the daylight hours? Answer : - Full Cloud cover = Cold day, No cloud cover = warm day What factor affects the temperature conditions experienced during the hours of darkness? Answer : - Full Cloud cover = A warmer night, No cloud cover = a colder night. The influence of the cloud cover is obvious, as it is a dominant factor. The Clouds reflect the sun's ray and the, air and earth are not heated and it stays cold after a previous night. If the sky is cloud free overnight the temperature drops as the heat radiates back to the upper atmosphere. No blanket effect from the clouds, it gets cold. The influence of the clouds is obvious. Meanwhile the CO2 is constant. By the way, the Artic ice is increase. It is getting colder
As someone who is vacationing in London an was quite chocked by the single pane windows and electric boilers in the apartment we rented, I’m not surprised you need to run expensive peaker plants. What you need are more insulation and district heating using combined heating and power plants. Run them on trash, bio methane or refuse wood.
Doesn't marginal pricing only apply to the spot market? How much of the supply contracted for under Power-Purchase-Agreements (PPA) and long term contracts? That must tend to reduce the wholesale price fluctuations.
Industry and big players buy energy directly, the issue is not in they way that electricity is priced for public. The same pricing is in use elsewhere without same issues. The real truth is that renewable energy has risen electricity cost and UK energy usage has been declining. This means that the country produces less real added value (not just pushing loaned money to your economy). Only in Nordic countries renewable energy hasn’t shoot electricity prices high, and that’s because we have lots of hydropower. This solves the very expensive grid balancing problem.
I'm seriously dubious about Ripple. They continually state their customers have some sort of ownership, but that's simply not true. You do not own anything. At best you are a leaseholder in 'common tongue' of a cooperative. Essentially you offset a venture who owns some or all of a generator (partially funded by the Welsh government). All you are really doing is offsetting your home energy bill at quite a high cost - and that source of energy may very well be fuelled by good old dino juice. Tbh I wouldn't have a problem with this if they were honest about what you're really buying. It's essentially another form ROC in my opinion, ie: Paying someone else to make yourself feel better whilst you get to keep burning a finite resource.
How to fix it, we should focus on building nuclear power instead of relying on renewables. Solar and wind energy can't keep up with demand, which drives up electricity prices. When there's an oversupply, prices drop into the negative, meaning we pay to export electricity, only to import it back later at a higher cost. Taxpayers end up covering these costs through subsidies. Ironically, electricity prices increase as more renewables are built, because they add instability to the grid. This isn’t just a pricing issue, but a result of poor planning and a failure to consider how renewables could harm the broader economy. In fact renewables are not the cheapest in practice.Take Germany as an example. Over the past two decades, Germany has invested more than €500 billion in renewable energy through its 'Energiewende' (energy transition) policy. Despite this massive investment in solar and wind energy, Germany still relies heavily on coal and natural gas to meet energy demands when renewable sources aren't sufficient. In 2023, Germany emitted around 675 million tons of CO2, making it one of the largest emitters in Europe. While the country has increased its renewable capacity significantly, the intermittent nature of solar and wind energy has made it difficult to phase out fossil fuels completely. This has led to higher electricity prices for consumers and continued carbon emissions, illustrating the challenges of relying too much on renewables without a stable, low-carbon energy source like nuclear. This wouldn't cost hundreds of billions either.
well yes, but actually no. this is a false dichotomy. i would agree that nuclear can be very good option for the base load of energy consumption. (certainly better than fossil) but on the other hand we definitively should still focus on renewables and in addition we should invest in energy storage and a smart grid. and electrical cars might be able to help with that (yes, thats just energy storage with extra steps) used to complement each other we could get to net 0 CO2 AND cheaper energy cost in the shortest time. there just is no one size fits all.
The UKs grid power stations were built near to coal fields, hence why they are down the backbone of Gt Britain. Now generation is coming from the coasts in wind and solar, the power lines are being rerouted.
When you said 'marginal cost' I figured out the rationale and effect. You're charging the price for the 'next joule'. That actually makes a lot of sense... It just begs the question of who gets to pocket the baseline profit.
A bit sloppy This isn't just marginal pricing, this is a marginal pay-as-clear market. Pay as clear markets are important in the context of renewables for several reasons. One you begin outlining at around 6:30 If a source is cheap but intermittent and needs other sources to fill the gaps, then the source isn't that cheap, you need to consider the cost of them together, because the cheap one doesn't function without the other. It's also important for a structural region, that quantity supplied and demanded have to be very precisely matched, and marginal pricing very effectively does that, with generation coming online when the price exceeds their marginal cost, and users using less when the price exceeds their marginal benefit. Thirdly it is important for an economic-ecological one: Profits. Because profits are revenue-costs, to the degree to which renewables are cheaper than fossil fuels, marginal pricing makes them more profitable. Because investments are made in what is most profitable and firms use profits to re-invest in themselves, making renewable energy as profitable as possible is the way to make the transition to it go as fast and smoothly as possible. Interfering with this interferes with the incentive to deal with climate change. Marginal pricing is the best way to incentivize the building of enough storage, nuclear, and renewables that gas doesn't need to be relied upon (thus pushing down the price) Another issue mentioned is that the grid was designed for coal fired plants, the configuration of transmission lines and other infrastructure that is most profitable/lowest cost with coal plants is not the same as configuration of transmission lines and other infrastructure that is most profitable/lowest cost with renewables. New transmission lines and other infrastructure have got to be built to accommodate that.
Thank you so much for this video. I was sceptical of its title and intended to watch and criticise but two mins in I was praising it! The sooner that marginal pricing is replaced the better and if this Labour govt want to actually help people and the planet, they should be working hard to make this happen.
Perhaps, for clarity and honesty, it should be mentioned that expressed as an average where in the UK literally everyone has an electrical supply and isn't afraid to use it, vs as an average in China an awful lot of people live outside of developed areas and either have minimal electricity use simply because they don't really have anything but the basics to operate or may not have an electrical supply at all.
The cheapest way to generate electricity, even factoring cost-overuns on projects like Hinkley C and decomissioning, is nuclear. Bar none - and it's a big gap too. The only way to arrive at that not being the outcome is factoring in - as usually happens - the cost of nuclear weapons programs. Even when you do that it still looks pretty good. France has the lowest pre-tax energy prices on the planet, because most of France's energy comes from nuclear reactors. That isn't an accident. The fix, by the way, is to strip all the subsidies away from installing power generation, all the CFDs, all the subsidies for not generating power and let the market fix itself. Throw in carbon trading/taxes too if you like. In the UK we pay for electrictity like 10 times from install to it reaching our houses, and it has got to stop.
i find the introduction a bit misleading. The comparison between Chinese and the British CO2 emissions in the first few minutes. The first half of the 1900s China was a 3rd world country. with little industry and massive famine a generally a subsistence existence. The UK on the other hand was fighting for the good side of history in 2 world wars and still a world leader in manufacturing. and i would wager the CO2 emissions compared to other European nations would show a similar curve. The last half, The UK ditched its industry and ship it overseas. the Chinese population also means that the UK CO2 emissions are a fraction that of Chinas. The tone seems to be that the UK produce more pollution. This is not the case. However i agree with the overall message that the pricing of the UK electrical grid is terrible.
Marginal pricing is alright in concept. Pricing is reasonably transparent and suppliers are rewarded for continuing to be more efficient than their competitors. The issue is that there are two different types of supplies - ones that can vary with demand and ones that don't; these different supplies need to have separate pricing.
@@nullid1492I would say the best way to do it is you buy your electricity through a private provider so they can set the price and compete with each other therefore meaning the customer can take the best deal and the expensive ones go out of business, this will mean people will pay the cheapest price and each method has its advantages and disadvantages put into numbers, the actual grid costs will also be on a per usage cost based off the pure power line costs
PPA are being pitched to customers in the USA. It's a 25yr contract to buy energy from the PPA company. They own the solar equipment and they are using your roof and connection to the grid.
You forgot to tell why the gas is so expensive per unit: gas power plants have to pay large capital and maintenance costs whether they sell energy or not, so the price for the energy they sell is almost the same no matter how much energy they sell, the difference being the price of gas. Had they been producing and selling energy without interruption the unit price would be much lower, and they can't be shut down because the "renewables" are in fact intermittent, and not very predictable, and the gas power plants can start faster than coal but not in a fraction of a second so they have to stay on even when they don't sell energy. The intermittents are a scam without cheap batteries, and cheap batteries are still science fiction.
@@EmilNicolaiePerhinschi Gas is quite difficult to store as well, we manage this because demand has historically been quite predictable but if demand becomes linked to something as unpredictable as wind then this may cause issues. Currently a lot of power stations link directly to pipelines from the North Sea, a lot of this gas is a byproduct of oil production and North Sea operators like to maintain steady production. If oil producers have to shut in production whenever the wind is optimal then that's another energy provider that has to be compensated, ie more cost.
Even if you had cheap batteries most of the studies state they will be 100% charged when you need them and 0% when they can fill up cheap. This just cannot happen.
@@Swwils .... What? Cheap batteries would solve solar and wind erraticness. But sadly they need to drop 90% in price, and that aint happening. It almost is cheaper to just build 10x the normal load in solar and wind and hope somewhere in europe there is sun and wind. Thats how not near we are to using batteries to balance the 3 months that is January to March dark calm time. 10x!!!!!!!!
@@colinmacdonald5732 Ah, so we shouldn't have torn down all our gas storage tanks! Pity those planning things don't either have a crystal ball - or consult someone who has - OR actually act with caution when moving in an irreversible direction... - Beeching and the railway cuts - Gas storage that we had in every city and most towns, how useful they would be now - blowing up working coal powered power stations - as yet we don't know if war or volcanic eruptions will make such facilities an eminently sensible ONLY fallback
The simplist way is to use micro nuclear plants, these are like the ones used on subs & aircraft carriers. they are only the size of a couple of containers & can be linked together. we already have the infrastructure to link them into the grid at all the disused coal power stations.
Agree to disagree. Marginal pricing you mentioned is there for a reason. How would you determine value of a unit of energy otherwise? You take volume weighted average of each source’s / each company’s / each power plant’s cost? Then why a plant with more expensive cost would generate? They won’t. You might say let them not. Well, they are generating for a reason in the first place: not enough cheaper supply. You give them a percentage of profit they can make? Well, sometimes wholesale prices will be so low that you won’t be running at all. So, your upside is whatever the government decides and your downside is unlimited considering the investment you’ve made. Why bother? You might say let them not: Who do you think will pay for that lacking unit? The taxpayer because the government will have to fill that gap when there won’t be anymore investment into generation assets.
Well, peaker power is a necessity due to flaws of base load and/or variable renewable power. I would say if you are supplying peak load power as an "on demand" service, you deserve to be paid a premium. Whereas if you are just supplying base load then you should have a different fee. Keep the marginal pricing but with two different pricing models. There are multiple different ways you could set these though. Either way, the cost to the consumer would be reduced. The peaker power suppliers higher pay can easily be justified as they are providing a different service altogether. Maybe this would even incentivize renewable sources to invest in battery tech.
In my country, the grid operator is run by an independent government agency. If the grid is not supplying demand, they can direct market participants to increase supply regardless of the economics. Is the UK grid the same?
We have this issue considerably more than you here in NL, as we have a lot more solar. The only real solution is to switch to nuclear for baseload, or to turn excess power into something useful like storage during peaks. But storing energy is actually quite hard if you dont have hydroelectric dams.
we have a junk in, junk out problem with bad data. The Lazard cost of electricity based on LCOE which you used has been proved to be incorrect. Lazard/LCOE uses short term costs, and does not include the cost of backup power, new transmission grids, waste disposal/decommissioning of renewables. Simply put, Lazard LCOE compares building tents (renewables) with building brick houses (nuclear). So because renewables are quick to build, but do not last long, there costs appear low. And many other incidental costs of renewables are not included. Renewables appear low cost. Whereas nuclear takes longer to build, but lasts longer and does not need backup or new transmission grids, but lazard does not use 80yr costs of nuclear, where after the first 15yrs of nuclear, nuclear electricity becomes very low cost, but at 15yrs most wind/solar is already broken and useless. Lazard needs to compare 80yrs of renewables to 80yrs of nuclear, plus recycling nuclear waste in a green economy to reuse nuclear waste to generate more electricity. Nuclear power stations have utilization rates of 95% so nuclear power backs up nuclear power. More nuclear power, less backup costs are required. Whereas renewables cannot backup renewables. Cold night across northern Europe and no renewable electricity for 1000's of KMs. So the issue is we are in a false green renewables virtue signaling cycle where we are not honest with costs, decommissioning and having to build two generation systems for renewables, one when renewables work and one generation system when renewables does not work. Taking into account that renewables work (utilization factor) 35% of the time, that is 3 days per week, we need to build another generation system for the 4 days per week renewables do not generate electricity. Summary, build one generation system, 80% nuclear, 10% renewables, 10% hydro/waste recycling and we do not need a backup for renewables. However, this does not meet the problem or appearing green and does not meet the virtue signaling criteria. Conclusion, we have a political/ideological renewable virtue signaling problem which causes high electricity prices, but we cannot admit that wind/solar are the problem, because wind/solar are falsely portrayed as renewables and wind/solar will solve climate change. However, after 20yrs of renewables failures we now see that the answer is not more renewables, no wind/sun plus more wind turbines/solar means no electricity. The scientific problem of renewables of; 0 (sun/wind) x (lots of renewables) = 0 electricity. Very simple problem, but we cannot admit it for political/ideological reasons. Lets not get into the hidden subsidies, and payments to boom bust renewables not to produce. When there is too much sun/wind renewables are paid not to produce, when there is no wind/sun renewables cannot produce of sell electricity. Hence, we have a broken renewables electricity system. Also, ask the question, all the people who installed solar on their rooftops, who will pay to dispose of the old solar panels. Lots of renewable problems we do not acknowledge.
So cocktail price also includes: Storage cost, electricity for cooling, cost of the venue you are at, cost of chair you sit on, cost of music you are listening to, cost of the place being cleaned after you leave, cost of manager running the place, cost of accountant calculating the costs and so on.. you get my point
Hey Simon. I love your video. I want to offer a recommendation on terminology though. Electricity grid is the physical machinery that allows to match demand with supply. To my knowledge, that part, the engineering aspect isn't in crisis. What's clearly not working well is the energy market. Market is just a human invention. How do you price things is independent from matching electrical demand with generation and transmission. The finance model not the physical model is what you are describing here.
@@charlielyth1982 transmission constraint and lack of storage can indeed be problems, but that wasn't the focus of the explanation of this video. I'd be interested to know actually how close to crisis actually is though. The typical solution when you have more generation than what you can store or transmit is curtailment. It's not that grid breaks. The wind generator loses though as they can't sell all the energy they are generating
One advantage of owning your own renewable generation is decentralising the generation or power. A fully decentralised power infrastucture could join together in virtual power stations. Ripple does not afford that security.
How is Oz not running on solar by now? You have year round sunshine, large houses perfect for home solar and a hell of a lot of land that is not suitable for much else.
@@David-bi6lf Tell me about it. Would you believe they're talking wind. Yes people do have solar on their roofs, many people do if only the government would fund it for everyone it would be heaven. Instead they just put the price up and no one is talking solar on the land. 🤑
We’ve got a similar issue in oz with big power companies that manipulate the electricity market to jack up the spot price, despite all the renewables. Won’t change until we have enough wind, batteries or EV’s to smooth out the peaks and put the gas peaker plants out of business.
@@David-bi6lf Over a quarter of Australian households have rooftop solar already, so we're well on the way as far as generation goes. Storage is another matter. At the moment, home batteries are only worthwhile for new solar systems. If you've already got solar panels, it's just not economical to add them yet.
The UK pricing system is crazy! But the grid has a few problems. You are way behind in storage. The NIMBY's have limited onshore wind. And, your transmission lines need to be recabled to carbon fiber core. The best long duration storage technology is still up for grabs. It may be liquid air, iron air or nickel-hydrogen. We should know in the next 24 months.
The Tories allowed the nimbys to stop on shore wind which was absolutely crazy by stopping them being built if there was just one person object I believe. Labour have seen sense and scrapping that.
@tiepup Salt-cavern hydrogen is one of the few cost-effective long-duration storage mechanisms, that can be used to deal with seasonal shifting and dunkelflaute conditions. The inefficiency just affects the cost, same as it does for everything else. PV is only 20% efficient, peakers are only 40% efficient; they still make financial and engineering sense.
@@Lewis_StandingHydrogen is garbage for everything, but niche. Much better options. From thermal, compressed, to chemicsl batteries. So many in fact that there are no clear winners for energy storage. Just won't be hydrogen. Already better forms of energy storage, and they are less hazardous. It is weird Britian doesn't have a ton of storage. Some states in the US found out they can cut costs, and sell electricty high with batteries. So with that, and government subsidizes some states energy storage has been growing substainally the last year or two. Like Texas.
@tiepup If PV and wind is "free", how does the efficiency of storing and un-storing it make it un-free, given that those efficiencies are 'paid' for by 'free' PV and wind in the all-RE scenario? That's a basic arguing error.
I like economics and enjoyed taking several upper-division econ courses in college. The thing the "econ 101" crowd doesn't seem to realize is that pretty much everything after 101 is about how what you learned in 101 isn't quite right. That's true of many disciplines, not just econ... but the false sense of competence/expertise in econ does seem to be particularly bad.
Do your homework on ripple if you are interested, I love what they are trying to do but the numbers aren’t great, speaking as an investor (I’m also a bit bitter my supplier isn’t supported and I’m not prepared to switch)
Get solar panels, large batteries in your home and side connect the solar panels so that they work independent from from the electric grid. That way, if there's a power outage you have power and the solar panels continue to work and generate power. There are now technical solutions that work with both the electric grid and solar panels in home.
That’s what worked best for me. Being off grid,the small system can be payed for with cash, and is easily scaled up DIY without coordinating with anyone else. It is essentially like having a generator that you use when and how you want to. I have progressively increased my battery bank to 65 KWH so I can benefit from hourly rates. Presently in Texas we can pay double in daytime and free at night. That works good with off grid solar.
Yep. Though I just have small batteries... enough to keep lights, communications, and refrigerator/freezer running for a nice long while, and to keep the microinverters on the solar panels happy and generating. I do intend on increasing the battery capacity, but right now there really isn't much of a point given the way net metering is done here. However, I do expect that to change, and then I'll put in enough to do some load shifting.
the video title and message is flat out wrong, the _grid_ isn't broken, the policies and etc. are broken. There's nothing wrong (at least as stated in your video) with the actual grid, and the science and engineering of it, the problem is just how people are billed as to their usage of energy. All you need is a slight change, call it 'electrical grid pricing' or whatever, and it's not blatantly incorrect, but that doesn't get views, does it? other than that, and disregarding the clickbait, the video was good. I quite liked how it did actually offer solutions, and things people themselves can do.
That's only part of the problem. The grid is broken in a real engineering sense because when you look at the best places to generate renewable energy they are nowhere near the places where the big old coal-fired power stations were that used feed the grid. In particular there is a big capacity problem at the B6 boundary between Scottish Power and NESO. This is why there are sub-sea HVDC cables being planned between both west and east coasts of Scotland and England. Your 'slight change' shows you don't understand the technical problems.
3:50 - it is variable cost, not total cost in LCOE. This high margins for renewables are insetive to get it more installed in grid. 10:00 - Coperatives are "working" becouse they do not have to pay real price for upkeep of grid and firm capacity for time with no solar and low wind production.
please persuade me i have it wrong. i explored ripple and ran the numbers and concluded the majority of value went to ripple and energy monopoly energy suppliers. - cant you share your maths?
I work in energy as an Analyst albeit off grid. Totally get how they do it. It's like worst case scenario pricing. In the event we cant produce from the "Unreliable" green energy imports would cost more hence maintaining a margin using those imports as a benchmark. Plus if we use oil or gas as a top up, this would mean more expensive hedge pricing because you cant predict the weather. In other words its more expensive to buy gas if your not buying a lot of it upfront before you need it. And since green energy is tempramental you can predict exactly how much youl need. But i do think green energy storage should fic this. Things such as sand batteries, gravity batteries lithion ion etc but theres costs for those of course
Yep, David Cameron. But hey, at least he then fucked off and left us in the lurch after the Brexit referendum so it's not like he's _all_ bad qualities. Oh wait...
@@Tintersurf you can look at the cfd for any wind farm project. They can't even BUIlD them on cost let alone operate them cheaply. This is a huge huge problem for a grid that ultimately works on physics. There is a flaw in using pure leveled cost to compare energy sources in the way this video does. An average net present cost of electricity generation for a generating plant over its lifetime is deeply flawed for this basis. You should instead think of the value, the energy provides and then also have the capture price in mind. This gives you a far more realistic and easy to understand concept of cost. Yes. Renewables would be extremely cheap if a 100% renewable grid with storage popped into existence. But it hasn't, it can't suddenly and we literally do not have the technology, not capital for that scale of storage. So if we are comparing fantasy - it would be far far more sensible to put that expenditure into nuclear - as it wouldn't need the storage and the energy costs would be cheaper. I am happy to discuss further but the size of kill you would need to achieve true cost effectiveness at grid scale is so so unfathomably large that it makes little sense.
@@Swwils While I'm a proponent for a diverse energy mix containing a nuclear base load the cost assumptions you make here are not correct. All forms of the current deployments of wind power have the lowest energy cost per MWH, again i do understand the need for a diverse mix of power sources. and i bring sources (admittedly US but what's a country between friends) -www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf
I'm kinda concerned if the UK's switch from coal to gas is an actual improvement. did someone calculate the impact of fugitive gas emissions compared to the coal emissions ? because we can't just compare CO2 emissions, we need to take the emissions from fossil fuel gas into consideration.
Most coal was replaced by wind power. While the generation from gas stayed constant. So it is not that much of a switch. But yes methane is a huge problem, but also exists at coal mines.
I think you misunderstood. The coal power stations weren't replaced by gas. We always had the gas peaker plants because coal power stations weren't able to respond to rapid changes in demand. We have actually reduced our usage of gas.
Full nationalisation also needs to be considered. From production to consumer, without a profit incentive electricity prices could be slashed. Rising prices have led to private companies or even foreign states profit in the UK to skyrocket. British Gas Energy had a profit of 720 million in 2023, 10 times higher than 2022. EDF, owned by the French state, massively profits from the UK, allowing French electricity to be some of the most affordable in Europe as us in the UK essentially subsidise French electricity for no gain ourselves. With nationalisation, this system of financial greed would be done away with, with the profits we've seen they could easily reduce energy prices (much easier to scrap marginal pricing without private companies) and invest profits into grid storage and green production and research, including non-intermittent forms like nuclear, geothermal, and tidal. It would also get rid of the pretty concerning amount of CCP investment/partial ownership in British Energy. Edit: Spelling
Of the grid at least, yep. I'm also fine with e.g. publicly owned (i.e. basically non-profit) companies _competing_ with the private sector and so, hopefully, keeping prices down. But i'm not sure it's financially feasible to renationalise all the energy providers. (don't get me started on water though, holy mother of Del Boy should that _never_ have been privatised. Usual suspect to "thank" for that of course :)
Solar is great in the UK in summer when they days are long, the sun shines brightly (hmmmm) and electricity demand is low. Unfortunately in the winter the days are short the sun is feeble, it is cold, solar panel output is a small fraction of what you get in summer and electricity demand is high. Sadly we don't have long term storage and probably never will. For example most utility scale battery storage is rated for 4 hours supply. Which is why we use gas. Gas power generation has two costs: the cost of the gas consumed and the cost of building and running and maintaining the gas plants. The more wind power we install the less we run the gas plants so the less gas we burn but the other costs don't fall. Those costs still need to be paid but compressed into just the time the gas plan is running. This is very very expensive and all the other energy providers will get paid that eye watering sum from the customers pocket. The energy pricing model is incentivizing the power producers to fulfill most of the demand but not enough to not have to use gas.
How is home roof-top wind generation coming along? Can they be powerful enough to make a difference without being that intrusive, as to breach planning permission regulations?
Hmm, I'm not convinced that's the best approach. Batteries are still very expensive. I think we should keep the gas plants for now and focus on phasing out oil. Having those gas plants as backup should allow us to depend on renewables for most of the time.
Just so you know - 10kW solar plant cost 3k euros, 4k with all installation hardware, on standard sloped roof. Easily DIY. Less if you can get some incentives (in Lithuania it’s ~2K eur).
Is this really a video to criticise marginal pricing? What's the alternative? To pay differently to different producers of the same product (⚡)? Marginal pricing makes it more valuable to build wind and solar power in a land with more expensive power, this is the point. Not having this would also lead to higher prices of electricity, since all wind would be built on the most technical suitable sites, not where the electricity is needed. Listen to Montel weekly for a good source of information on the energy market. If you call wind and solar power unpredictable you haven't heard of weather forecast I guess. We can with high accuracy predict how much sun and wind power there will be on the next-day-market. Flexibility from this is payed by the power producer or a flexibility market. Not the electricity price.
The issue is that there are two different products: electricity sources that can vary with demand and ones that don't. These distinct products require distinct pricing. This was my interpretation of the video.
the point is it is not the same product- one is not guaranteed and controllable (without investment in storage and grid upgrades), and the other is on demand, controllable, but is more costly to produce and unsustainable. off peak pricing is already a thing in some earas. calling it the same product is like calling a private helicopter and a public train the same product because they are both transport- where clearly they justifiably have different costs and utility
Marginal pricing is certainly good for people at the lower end of the pricing curve, but it's not obvious that it's producing optimal pricing for the country as a whole. The regional pricing model which is getting some traction is certainly interesting. It's has worked quite well for decades in Scandinavia, and would certainly reduce constraint payments so we actually got to use & make more renewable power.
> If you call wind and solar power unpredictable you haven't heard of weather forecast I guess. We can with high accuracy predict how much sun and wind power there will be on the next-day- That we can predict solar/wind is mostly irrelevant. Presume you have 100 wind turbines which meet your entire country's demand load today. You predict half the wind tomorrow. Do you: * turn up the little dial on the base of the wind turbine to get more electricity? * build another 100 wind turbines (in less than 24 hours)? * declare this is for the birds, beg your neighbors for juice and start building a nuclear power plant that doesn't depend upon the vagaries of the weather?
The prices for solar at 8:54 are very outdated. You can easily slash those in half. Price goes down every year, and there is currently a big oversupply due to China trying to corner the market. a 10 solar panel set up with expensive micro inverters in NL would run you around 4000-5000 euros. Depending on the kind of roof you have. That is not a huge sum for a two income household. And 350 watt panels are barely even sold anymore, the minimum standard is at 420 ish watt these days, and going up fast.
![Megan Thee Stallion - Roc Steady (feat. Flo Milli) [Official Video]](http://i.ytimg.com/vi/HozPPyqW0dY/mqdefault.jpg)
"depending on whether you prefer your surveillance to be Chinese or American" has got to be the best quote that sums up both platforms😂
As someone who works in the energy sector, this is one of the videos I clicked on immediately,. Overall, I think Simon did a fine take on things. The relationship between grid congestion and the energy market is really simplified but it's fine.
What surprised me was the electricity price comparison to other European nations and the following criticism on marginal pricing (pay-as-clear). Those nations are following the same market model, so the electricity price difference can't be due to marginal pricing being used. While marginal pricing seems very odd and old-fashioned it's actually the renewable generators that benefit the most from it. (1) While variable costs of renewables -- i.e., the costs to produce a unit of energy, especially for wind and solar -- are almost zero, marginal pricing ensures that renewable power producers receive the revenue they need to cover their fixed costs. Whenever the clearing price is higher because bids from peakers are also accepted , it's the renewable projects that generate the most additional revenue. (2) It negates unnecessary speculative bidding. Marginal pricing (pay-as-cleared) allows producers a no-regret bid as low as they can to just cover their variable costs. If their bids get accepted, they get to cover their marginal costs or get more, depending on the demand. With a pay-as-bid model, producers would try and predict hours of high and low demand to set their prices accordingly, because why bid low when you're sure you can get more? That way, marginal pricing allows for cheap renewable generation to almost always get a sale, making the power mix greener in the process and keeping the market close to the true cost of energy.
This is probably too long for RUclips, but the problem -- at least for the British energy market -- is correctly identified in the video. The gas power plants set the price too often because there's not enough renewable generation (during off-peak hours). If you get more renewables into the grid and ideally make them flexible enough (storage) so they give off their energy during peak hours, electricity prices will tumble -- at least in the short to medium term.
Is there enough competition between peaker plants to keep profit margins low and prices reasonable given the cost of gas? Or are they colluding to keep prices high and maximise profits?
And we all know how expensive storage is.
@@adrianthoroughgood1191 Also working in the electricity sector. Electricity pricing is one of the most highly regulated areas of the economy both in the UK and in Europe. It is highly unlikely there is any collusion.
He mentioned it in the video, but introducing electricity pricing regions would be a great idea for the UK and being them in line with the rest of Europe. (Though it wouldn't necessarily resolve the issues raised in the video)
Good comment. 👍
We are in a time of transition, and much is changing.
The grid itself is a $TRILLIONS infrastructure investment that needs cashflow to the owners.
ROI, return on investment.
This is a fixed cost and owners are entitled to maximise profits or at least get a minimum cashflow, minimum ROI.
As demand peaks, supply $kWh prices peak.
As demand falls, the fixed costs of the national electrical grid would have to be recovered by higher $kWh supply prices.
I see my feed-in 5cents kWh and my supply 50cents kWh which reinforces the reason for even dirt cheap nuclear electricity is expensive to the customers.
Grid costs are not trivial.
Ever get so thirsty for a cocktail that you write a video essay?
All the time
Just so you can make it a tax writeoff
Looks like a Paloma, still delicious without the Tequila
Mmmmmm. Tax write-off booze, the best kind!
Many times but that changes over time so it's not something I could ever get used to
Want ice in your drink? There's a standing charge for that
He missed a poke at that 😂
You want a drink? There's a standing charge for that.
Plus tax. Don't forget about the taxes
The one good thing about the existing price market for energy is, if you produce cheap electricity you sell it incredibly expensively. Meaning there is a big rush to go in for renewables and batteries.
Yep. The problem is that this isn't actually a good way to invest. For instance, increasing renewables will drive baseload fossil fuel generation (e.g. coal plants) from the grid. But that makes gas turbines even more important because more renewables means a less controlled and more variable supply, that has to meet an already pretty variable demand. So the market will drive the grid towards a mix of more renewables and more gas turbines.
It also means there is no incentive for energy companies to find cleaner alternatives to the gas peaking plants as they are the ones that maintain the high prices
Would this encourage batteries? this only encourages generation thats cheaper than gas. if something is more expensive then it will never get used.
further, if the winds blowing in the morning, its more profitable for the wind turbines to sell to the grid, because their price is artificially propped up by gas, so theres no point saving that electricity in batteries, until the wind dies down and prices increase, because they won't.
In a situation where the grid is dominated by wind, and no gas, the current situation could work, youd have extremely low prices when its windy, and extremely high prices when its not, that would provide opportunity for arbitrage.
another problem is that as wind power increases, you get less and less gas generation, so the gas plants need to charge more per unit of electricity to cover their costs. That works to a point, but in a situation where you only need gas to cover that one windless week in january, it isn't going to work, so eventually were going to have to move to a system where gas generation is basically a backup, and funded just to exist, just in case.
Basically I think you probably want a system that divides gas generation from everything else. Gas plants can be moved to a system where they are paid to exist, as a backup, and the main (renewable) grid finds a balance.
Good point. Those are a great incentive but at the expense of the consumer.
In many ways this is a market failure - national level planning of energy production suddenly seems attractive. (That suddenly gets political!).
p.s. some of the other replies are spot on as well.
That's bad.
"This is so far out of my area of expertise, that it may as well be socializing."
Definitely wins the Internet for the day! 🤣
Agreed!
Great presentation. A few items:
> Here in the USA I am a member of an electrical cooperative. Over half of the land area of the USA is served by energy cooperatives. American energy cooperative were created to serve rural areas not served by municipal or private providers.
>Also, there is also the option of community energy projects which are mostly solar.
> I would also like to mention the developments of enhanced geothermal. If things go well electricity from geothermal will provide a carbon free baseload. The heat deep in the earth comes from decaying uranium. So, in a way the earth is a nuclear reactor.
>The issue of decentralizing a centralized system will require a renegotiation.
Edited Note: The word "Cooperative" might have different meanings between its use in UK vs USA.
Re geothermal there is a company called quaise energy testing to commercialise gyrotron drilling to vaporise rock which will hopefully make geothermal viable virtually anywhere on the planet. Current drilling is limited to shallow depths and thus limited in location. This could be game changing for clean energy.
Yeah millimeter wave drilling by the company stated by the above guy looks promising. Quasi Wave or whatever.
I hope they combine that drilling tech with the other tech that allows closed loop systems for geothermal.
I don't like the idea of just shoving water deep down letting it turn to steam. Lots of nasty stuff down in the ground, and it can come up by the pressure to pollute ground water.
We also have solar pervoskites coming soon. One company called Oxford Solar is making hybrid panels now which are much better than any other one on the market.
So geothermal and solar with batteries will be the future. If nuclear doesn't finally take off.
Battery storage is becoming significantly cheaper each year. Kinda crazy how fast it is dropping.
I also seen a new tidal system that looked promising. Yet my hopes are slim on tidal ever being affordable versus other sources. At least it is an option with theae 1,000 KW sized buoys I think they were.
@@David-bi6lf
Yes, Thank You. One could say that geothermal is a hot subject. There are a number of technologies being developed. Time will tell on which ones will work out best. I could mention a number of startups, but just one is Sage Geosystems out of Huston Texas. Cindy Taff is their CEO and I like what she said in a RUclips interview titled:
Geothermal is Having a Moment, Can it Deliver? Ep179: Cindy Taff
The Earth's heat does not come from radioactive decay? Maybe a tiny bit does...
@@Bozebo Well, if the earth's heat did NOT come from radioactive decay, earth would be dead and nearly as cold as Mars. Now its a bit uncertain with gargantuan error bands but current estimates is that radioactivity accounts of 1/3 to 2/3 of the excess heat. That heat balance is still less than 1% of the earths heat radiated to space. Rest of course is the sun.
I meet Ripple Energy at the london EE show.
I liked the idea, but then everyone at the stand claimed not to know what LCOE was, and also couldn't explain how buying generating capacity equal to 120% of my home's needs translated to only a 25% saving on my bill.
IMHO it's a pretty big red flag that the company representativers don't know fairly basic electricity market terms, and also don't seem to understand how their company works.
For the record, the 3.5kWh system discussed in the video would be slightly over twice the price of what Ripple quoted me, but would bring my bills down 80%.
It is a slightly complicated model but there are some good explanations on their web site and FaceBook comments. Basically you receive payment for the electricity that your share generates at the *wholesale* price (which is what the cooperative receives), which is a lot less than the retail price that you pay. As you say, the returns are quite low compared to having your own solar. There are other cooperatives that have much better return.
@shponger-q7o Fair enough, but marginalised pricing means that at least some of the time, Ripple is paid ~13p per kWh, because that's the LCOE of gas, which sets the market price. So if maintenance et all is 2p, you should be credited with 11p. (And what capital costs? Surely that's what you pay for?) Maybe it all averages to 25% over a year... Though I wish there was more hard numbers and less guesswork on their page, and show stands.
@shponger-q7o Regular plants need to factor in capitol costs to LCOE because it's a loan they need to repay. But for Ripple it isn't. The upfront 'membership fee' quoted on their website is within the range of values for the total capital cost per kW of building a wind turbine.
If you have already paid the capitol costs (and it very much looks like you have) they shouldn't be charging you for it a second time. If there is a regular investor that makes up for a shortfall of private membership fees, then their repayment comes out of their share of the turbine or solar plant, not yours.
@@anticarrrot Ripple are not involved in the spot market. They have Power Purchase Agreements for 6 month or 1 year periods which are a fixed price for every kWh. They do benefit during price hikes because they can negociate a higher price for the following year, but this has nothing to do with marginal pricing.
@@shponger-q7o You also said they charge 2p per kWh for capitol costs.
Or did you mean they pay you 2p per kWh for your contribution to capitol costs?
That was such a good graphic of carbon intensity at the start of the video!! So slick!
@@jameslloyd2540 yes. I really like that way to visualise it
The problem with Ripple is that you sell kw at market wholesale price, say 5p per kw, but are charged at 28p per kw. So even when you buy 100% of your energy bill, you actually only save a % of on your electricity bill, typically 10-20% off your bill. Despite this sounding negative, I have done this, more as a point of principle than sound investment. If you look to save money, far more effective to put money into a battery limked to a cheap tariff, then possibly solar. (battery first, as in winter, when usage is higher, it delivers savings. In summer, panels are great but same panels fairly useless in November, December, January.) Again, I have a full array of panels, and 14kw of battery storage, which I charge overnight in winter at 7p per ke enough to last the entire day. In summer, overnight charging isn't needed, panels run house, charge house battery, and then trickle feed my car)
I think that your analogy of mixing Cocktails to explain the energy market was excellent.
Most of my career was in electricity generation (coal fired and nuclear) and following privatisation, the companies would offer their generators to the grid (zero bidding?) such that they would be paid the same for each MWh as the most expensive generator on line. A nice little earner for some.
This is all that many of today's population know as the norm. However it wasn't always run like that.
The National Grid, which was part of the CEGB, used a table called the Merit Order which listed each individual generator and its cost of generation. Apart from specific areas where security of supply would mean out of merit generation, each generator was synchronised to the grid as required, according to its position in the Merit Order thus ensuring that the cost of supply was kept as low as practicable.
In the power stations, we responded to directions from Grid Control, and never had to deal with financial bidding in the event of a reactor trip.
It was better for the consumer and cheaper, too. No shopping around for deals very year or two. One bought electricity from the electricity board, gas from the gas board and water from the water board. Simple, effective, and not the rip-off that has happened since privatisation.
You assume that had the grid not been privatised the government would have been rushing to invest in the grid as a private investor would, even though we are one of the lowest countries for investment in the OECD group. Those higher prices are paying for the infrastructure as well, the profits that these private companies generate, which can be excessive (particularly in the past 2 years) is because the government regulation allowed this and kept the system the same. The government could have reformed the system 20 years ago, yet it didn’t, which is reflective of the performance of our government & the regulators. There have certainly been benefits to the privatization and the competition that it indroduced which increased productivity, efficiency and innovation in the Uk energy sector. Renewables being the biggest highlight.
Don’t assume it would be better off if privatization didn’t occur, that’s nostalgia. Often the comparison is made between the UK government and others in Europe, but how those governments institutions run is different to the UK and crucially the amount of tax they collect (particularly for France & Denmark) helps paint EU countries in a better light when doing a comparsion.
That's not to say privatisation could have been done differently, though I would argue reforming how the UK government runs in general is a bigger priority (particularly productivity, transparency & digitalization) and if the uK gov was reformed done, then it would bring down the differential between a government owned company and a private company.
While I may argue that for energy infrastructure, I don’t for water companies as there is way no way for competition to occur in that market unlike the energy market.
@@OkamiPara Investment in the National Grid was continuous before privatisation, as it was also in power stations. The collapse in a steady stream of orders led to the loss of British manufacturing industry. The large items of generating plant now come from France and Germany.
This belief in consumers getting better value from competition in the energy market is ridiculous. Furthermore the assets were sold at a knockdown price below their true value. Almost the entire energy supply networks is now under foreign control.
Wonder why the UK is going down the toilet? Having to be nice to the foreign owners of our industry (recent example P&O/DP World).
How would you see a Merit Order system working in today's market with such a fluctuating supply coming from the 40% renewables? Would we have to use those as the base line and then work the other plants around them? Meaning a much higher polling rate to change production levels
@@thesherbet > How would you see a Merit Order system working in today's market with such a fluctuating supply coming from the 40% renewables?
Of course, I am not MervynPartin, but it seems to me ....
make intermittent RE generators like wind/solar provide dispatchable power! If THOSE companies have to invest in storage to make the happen - so be it.
Why do you presume the problems wind/solar create should be solved by the rest of the grid?
Why do you presume wind/solar should get first crack at fulfilling the demand load?
If you ran a lunch counter, would you put up with, no matter how cheap, an employee who sometimes did and sometimes didn't show up for their shift at 10-2? Would you fork out a little more for the reliable employee who always showed up?
I signed up with Ripple a while back, I won't start to see returns until the Derril Water solar park comes online this winter though, but as a renter, it's nice to have an option.
There’s a potential middle ground between single-home solar and co-operative projects. Many homes in the UK are owned by Housing Associations, (basically a job the councils used to do, farmed out to, I think, a non-profit). The UK government could design financial channels to give UKHAs interest free loans to install local generating/processing plants in or near the enormous estates of houses/flats owned by HAs and fit solar to all the local properties. The tenants wouldn’t have to pay, but would benefit from a communal source of renewable power and the government could rightly claim the renewables against their targets.
Germany and much of the EU have the same market design for electricity. While it has problems, when peak plants run often it, the reason for marginal pricing is that you need these expensive powerplants for a functioning grid, because production must always match demand. So only paying a proportional price would basically mean nobody builds these plants because it wouldn't pay. Pricing zones may help. Another idea is a capacity market where a gas plant receives some amount per MW (power) that it is possible to produce (just in case) - seperate from the electricity market. This would either be paid by taxes or some added component on the elecrity price. Another problem is redispatch, when to much e.g. wind energy is produced locally and can't be used/transfered. Then some wind turbines have to be shut of, but the (already sold) electricity has to be provided somewhere else on short notice - mostly gas plants.
Do you not understand what he is saying? The fossil plants get paid marginal price. It's the variable renewables who get paid way above what they deserve, it's a giant subsidy to uneconomic wind and solar and against fossil plants, destabilizing the grid.
it's a pity that although energy sale price is set with marginal pricing, production isn't paid the same. When we had a windmill we were paid 3p/unit delivered to the grid but were paying 15p/unit received from the grid. that 500% difference seems a lot, and shows the inconsistancy of pricing.
I thought you would cover Octopus Agile electricity tarrif, as that is such a quick and easy way to halve your electricity bill as well as helping peaker plants to stay offline.
I recommend everyone in Britain read a fair and reasonable Money Saving Expert review of Octopus Agile (not applicable to those elsewhere), See " Octopus Agile - is it now an energy tariff worth switching to?"
Definitely one to out in your top 3 ...
I have PV and invested in Ripple - ironically the Kirk Hill project that was delivered late and cost more than expected pays a measly 3.2p/kWh - I halved my electricity import with PV and have reduced that even further with battery storage- import is down to around 175kWh/yr but with the standing charge that then equates to £1.20/kWh - unless I massively increase my PV and battery storage I am getting shafted the harder I try 😳
Uk just converts coal fired power plants to wood pellet fired power plants and slaps a green sticker on it saying its renewable. The wood pellets are manufactured in Canada.. The carbon used for manufacturing and transporting by several ships and trains every week is not included. It actually takes twice as much wood pellets as coal to achieve the same energy output! So, that carbon figure is inaccurate.
Damn
Are they converting Radcliffe? The good thing is that they could always be converted back to coal once this hysteria passes.
@@MrJonathanwarriner The wood burning power stations must be handy in Scotland, to burn the 17+ million trees felled for windturbines there :(
I've been to the places where the wood chips are produced, the carbon for shipping and transportation is included and shipping has the lowest carbon intensity of any form of transport per tonne transported.
Drax is controversial in that respect. No other coal now.
Another nice side effect of this cooperatives, that comes to mind: It's non-profit (kind of, I guess). So, less billionaires, that laugh their asses off by ripping us off.
Not really side effect, that's ultimately the reason it works in the first place.
Honestly, I'm suspicious of Ripple and other companies like it. The power cooperatives which make the most sense (to me at least) are local.... basically a neighborhood or town level thing. There does seem to be a niche for a company which would organize and manage those sorts of projects though.
@@Bozeboit only works because of subsidy.
Nah, it's just another layer of useless gits taking a slice of the pie - it does NOTHING to lower energy prices. It's simply marketing.
They made up stuff about global warming so they could produce cheaper energy for more money.
A point to raise is, as I understand it, a physical issue with the grid.
As it was originally established electricity was carried from power plants, particularly in coal producing regions, and transported to homes. Power was generated in a few central locations and distributed.
The locations where renewables projects are most viable are not always going to align with where the old power generation was, so there now needs to be work expanding the capacity of the grid in these areas.
Renewables projects can also be close to homes and widely distributed. The grid no-longer just carries power from plants to homes, but has to take electricity flowing in the other direction too. Homes can now be net generators and that means more work on infrastructure to accommodate this.
The same thing happens in Greece.
the price is calculated on the gas ,and traded on the "market" ,that only has 4 suppliers who have formed a cartel.
Nationalization is the way forward.
Yeah, I'm not so sure about the whole "coop" idea as it seems like a great way to just open the road to an extra complicated privatized system.
Let's not forget that burning methane ('natural gas') for electricity has been found to be likely worse for the climate than coal thanks mainly to leakage during production and transport (anything above 3-4% loss puts it worse than coal - it's estimated 5-8% may be standard and some producers may be significantly over 10%). LNG in particular has up to 30% more climate impact than coal on average.
Sounds like the UK "just" needs more energy storage, so that the energy storage can take over the role of setting prices from gas when variable renewables are varying downwards. In a solar dominated grid, batteries with 4 hour storage are very profitable in this role. Dunno about wind, possibly you need longer term storage for that, but pumped hydro works. Hydro power usually gets a bad reputation because it destroys river ecosystems, which is fair, but if you just want storage (not net energy generation) then you can use off-river sites. Some countries are starting to use disused mines for this, presumably some of the UK's old mines could work (they already have detailed geological surveys because of all the mining...)
The problem with pumped hydro for us is partly geography. Upland areas in the UK, _especially_ those with large bodies of water conveniently situated, are almost entirely in the north (either the north of England or in Scotland) which is _not_ where most of the population (and so energy demand) are. _And_ we just don't have that many.
(the same is broadly true of former mines BTW though I haven't really looked into mine based pumped hydro so don't really know enough to judge their feasibility in general)
They are trying to put a battery storage site in rural Dorset but the nimbys are out in force
And the other hydro electric projects that probably get a bad press from an ecology perspective are tidal ones, especially those looking at the Bristol Channel as a power source, e.g. Swansea Lagoon, the Cardiff equivalent, or the Severn Barrage. There is a LOT of energy storage in the Bristol Channel, with predictable timing (unless something nasty happens to the Moon).
Uk 🇬🇧Switches from coal to natural gas to stabilize electricity grid.
---The UK's electricity mix in 2024 from zero-carbon sources(Nuclear, biomass, hydro, solar and wind) is 51% of the electricity used"
China🇨🇳, nah we just use coal to stabilize our electricity grid.
---The china electricity mix in 2024 from zero-carbon sources(Nuclear, biomass, hydro, solar and wind) is 40 % of the electricity used"
We're not at the point where we need lots of storage quiet yet. Gas and wind each provides about a third of our power. Even the solar peak only reaches about a third of the total. There are a few times a year when we use very little gas, but I don't think we've managed an hour without gas yet. Right now, we mostly need a lot more renewable power.
Make a dedicated Patreon tier for you to install solar? I would be interested to join that!
Yeah, something I'd consider.
Haha don't tempt me Frodo...
6:24 a few years ago we had ONE OCGT (Open Cycle Gas Turbine - peaker - power station, Indian Queens, used to support Cornwall's peaks)
Now we have THIRTY THREE ( of a total 402 power stations), most of which burn Diesel. 😢
Source: Gridwatch UK
You can build diesel back up power quite cheaply. Let's face it, we're not getting battery storage backup, all your other technologies are unproven, and probably unscaleable. So we'll spend a fortune burning diesel for electricity, and it gets worse, the World is running short of diesel. Hydrocarbons is increasingly made up of condensate and NGL's, you don't get much diesel refined from these. If you think diesel generation is expensive now wait till you see what's coming. The sensible thing to do would be to build more Gas fired power stations, and invest in our own methane production. But our Green idiocracy don't permit this, consequently we'll get something worse, diesel generators; more polluting, more expensive, less reliable.
Gridwatch's list of power stations also includes coal, so it's not up to date.
The price of diesel is set by OPEC+, and it doesn't have the added efficiency of a combined-cycle power station, so diesel generation is only used in unconnected grids (like Hawaii) and oil-producing countries.
But then how is it possible that electricity is so expensive in the UK? In Europe it cost just 7-8 cents to generate a kWh from diesel. Explain to a Swede
When it’s really cold here in Sweden we have old oil plants fired up to drastically lower the price.
They are hospitals etc lending their local diesel backups for grid stability purposes, makes sense as the diesel goes off anyway.
Solar PV panels with battery at approx 12k, are good value compared to a new kitchen or bathroom, or a conservatory, especially as they are an asset that pays for itself, as opposed to other home improvements that are a depreciating liability.
1:20 😂 Love your humor
I haven't heard "in the doobley-doo" for a while!
Vlog bros always call it that and quite often have something to mention in there. I don't think I've heard anyone else call it that before.
@@adrianthoroughgood1191 they got it from weezy waiter, I'm pretty sure he's patient zero on that, but the vlogbrothers would be the super spreader event
WheezyWaiter came up with it, and still uses it. He did a day in the life with John Green a few days ago and John says that he got it from Weezy. @@adrianthoroughgood1191
@@adrianthoroughgood1191 It actually got coined by WheezyWaiter, but doesn't use it much these days.
@@adrianthoroughgood1191 In a video with WheezyWaiter (titled "A Day with John Green", posted on WW's channel 27 Sep 24), John Green reminded us about three minutes in that it was actually coined by Craig Benzine (AKA WheezyWaiter). A video of Craig's from 9 Mar 09 called "The Point of Yes Return" in which Craig uses it is linked in the video description. While the vlog brothers probably use it more frequently than most, I've definitely seen other RUclipsrs from the same period use it. It seems to be less common now, but the number of people still doing RUclips from back when it was more common are a tiny fraction of today's RUclips creator population.
Marginal pricing is excellent over the long run, because when you pay the same price to all suppliers, the lowest cost provider (wind and solar) will have the largest profits. That means more batteries, wind and solar will be built, and soon we won't need the gas peaker plants.
And is this what’s happening right now?
So guess where the Tories went for a windfall tax to cover the gas price rise? Yep you guessed it.
@@henrikalo3379someone is getting it as Ripple is paying 3.2p/kWh for the 2nd turbine project 😳
I assumed this video would be about energy storage and grid inertia, two very important, boring, and incredibly solvable problems with conversion to 100% green/renewable/intermittent power.
Grid inertia is why you hear some energy regulators saying it's "impossible" to add more green energy to a given grid, because they're attached to a specific ideology for how that's provided.
She actually said 30 year life for a windfarm..? So there is the scam then..?
They do not last 30 years...
Yes, energy cooperatives such as Ripple are an excellent idea.
As someone who has kept up with the rise in solar. It is weird and incredibly wonderful to hear people just casual say "renewables are insanely cheap." like that's just the way things are/have always been. It's genuinely beautiful.
What is the price of solar power at night? Or you don't use electricity at night?
@@Kian139 You're going to be thrilled when you learn about these things called batteries Kian.
@@plankton50 so what is the price of doing that?
Remember you also need the cells to charge those batteries.
@@Kian139 Could I please recommend looking at Octopus Flux tariff. It helps balance the grid over the day, and also helps battery owners make money. Basically, instead of large industry owned batteries, individuals have batteries that help them store their own solar produced energy which can be used overnight, and also import at low price times (early hours) and export at peak times (16:00 to 19:00) in effect flattening the variability of renewable energy and making money at the same time.
@@Kian139 Simon Clark has a video on this too. TLDR even including storage solutions renewables are still so much cheaper than gas or coal. Have a look on his channel for the video; it's claled something like "What is the cheapest way to beat climate change?" he does a good breakdown on all the costs including installation, storage etc.
Renewables win when they are sufficiently over built to supply 100% of demand year round. The challenge then becomes how to use and sell the excess power without more craziness in the pricing structure.
I mostly use Ground News to check what different perspectives are saying. As a result, Ground News thinks my 'blind spot' is articles that align most with my actual views and biases 😂.
Do also remember, if you watch FaceBook at all, they have promised to make you the best by supplying down your chosen avenue; this could be your antidote... unless you actually want to get away from some kind of addiction; in such a case it is likely FaceBook will keep drawing you back in, deeper and deeper AND more frequently, as THEIR business model and THEIR success depends on this!
Interesting study on the imported lpg gas in which the true environmental cost of producing and transporting isn't taken into account in our carbon intensity. This actually points that lpg is overall worse that coal.
This is how it works in Sweden as well. And we are the largest energy exporter in Europe. I think you can imagine that people in sotuhern Sweden gets mad when we export A LOT of cheap electricity to countries like Germany because they destroyed their energy grid by shutting down nuclear power plants, and then we need to fire up emergency oil plants to meet demand in southern Sweden, and BOOM suddenly all electricity cost is based on the emergency dirty oil plants. Great. Gotta love capitalism 💁♀
important to understand the the UK grid is not "broken" - it has never been more reliable. Pricing structureas are about regulation and not the operation of the grid.
Most people are not interested in how electricity is generated so long as it comes out of the wall when it is needed.
Fully automated smart grid systems need to be as unobtrusive as possible and should not need a STEM degree from Oxford to understand.
The UK failed to move forward with renewing it's grid. (Expensive and is making some voters mad. )
Then they failed to contract and build up offshore wind power ar prime locations to really good prices and conditions.
that makes it even more peaky and even more expensive when there is no wind.
WTF u talking about? The UK is the world leader in offshore wind
It's possible you're getting mixed up with _onshore_ wind ? That was indeed effectively "banned" in 2015 by David Cameron, the then Conservative Prime Minister (it wasn't _actually_ banned but a policy was introduced that meant a _single_ objection to a wind turbine worked as a veto, resulting in an _effective_ ban because it's rare for literally _no one_ to object to, well, pretty much anything :).
Last year the then (also Conservative) government removed that provision so, hopefully, UK onshore wind can start expanding again.
Huh. The UK is a leader in wind and solar. Much of the profiteering goes into more solar. Look at Google maps, there are solar farms everywhere, and we're building more.
@@Samark-J We are, but we're also falling behind the targets the government set themselves. The last time they offered rights to build off-shore wind farms, the price they offered was so low that no one bid for it. We were hoping to have mostly renewable electricity by 2030 but it's now unlikely.
Every town should have a sand battery
Effectively it’s a big pile of sand that soaks up heat. Thermocouples to get the energy back out. The output is not linear. They lose heat steadily. To make them work you need a lot of cheap electricity to heat them up to begin with. You need absolutely massive sand storage units to get even small capacity. The only good thing about the high price of electricity is that lithium battery storage is viable - at some risk of unquenchable fire, and probably only with a decade of life.
I'm sorry but please never try to make a mojito again.
Even with an Energy Cooperative you will still need the Gas or Wood burning (Drax) CO2 generating peak electricity when the sun doesn’t shine (every night) and the wind doesn’t blow.
Another way to get around the prices set by gas is a dynamically priced contract based on the hourly day-ahead market prices. Gas plants typically set the price during peak hours, because that's when they run. In a traditional contract, those peak hours typically determine the overall price of electricity. But with a dynamically priced contract, you also get access to the lower (sometimes zero or even negative) energy prices during off-peak hours.
That would just average the same total costs. What is the benefit of that?
@@Kian139 I charge my EV during the low cost periods. This significantly lowers my average cost per kWh. Over the last 12 months, I saved 430 euro this way.
@@wcoenen good for you. That does not change what I wrote. Peak hours will always be a thing.
You can have someone average the cost for you. They will charge you a fee for it and they will know that it will disincentivize you from moving consumption away from peak hours and they will charge you for that too.
The only function of a high price during peak hours is to make people move consumption away from those hours until demand matches supply.
@Kian139 yeah that's exactly the goal. By moving consumption away from peak hours (especially things that use a lot of energy like a car) you'll lower your average energy cost. Because fixed prices don't have this incentive, they should be more expensive.
@@AykevanLaethem but you cannot remove the peak. People still prefer to consume power at peak hours despite the high prices.
I don't believe charging contribute much to peak load to begin with.
Are you arguing my case for me?
Big fan of ripple and have shares in a few of their projects. Having said that if you own your own home installing your own solar will be a better investment by far.
The supply companies are raking it in so of course they and by extension the government don't want it changed. Most of my utility bill is standing charge anyway meaning if I stopped using electricity and gas all together my bill would largely stay the same. "In the future we'll have flying cars" no we just have to pay just to exist.
Most of the standing charge is for transmission & distribution grid maintenance and improvements.
Great presentation and much enjoy the subtle humour. 😊
May I ask a couple of observational questions based on every day weather:-
What factor affects the temperature conditions experienced in the daylight hours? Answer : - Full Cloud cover = Cold day, No cloud cover = warm day
What factor affects the temperature conditions experienced during the hours of darkness? Answer : - Full Cloud cover = A warmer night, No cloud cover = a colder night.
The influence of the cloud cover is obvious, as it is a dominant factor. The Clouds reflect the sun's ray and the, air and earth are not heated and it stays cold after a previous night.
If the sky is cloud free overnight the temperature drops as the heat radiates back to the upper atmosphere. No blanket effect from the clouds, it gets cold.
The influence of the clouds is obvious. Meanwhile the CO2 is constant.
By the way, the Artic ice is increase. It is getting colder
Thank you!
As someone who is vacationing in London an was quite chocked by the single pane windows and electric boilers in the apartment we rented, I’m not surprised you need to run expensive peaker plants. What you need are more insulation and district heating using combined heating and power plants. Run them on trash, bio methane or refuse wood.
Very easy to ignore the huge and disgusting burning of wood chips from Canada, thus depleting large areas of forrest.
Doesn't marginal pricing only apply to the spot market? How much of the supply contracted for under Power-Purchase-Agreements (PPA) and long term contracts? That must tend to reduce the wholesale price fluctuations.
Industry and big players buy energy directly, the issue is not in they way that electricity is priced for public. The same pricing is in use elsewhere without same issues. The real truth is that renewable energy has risen electricity cost and UK energy usage has been declining. This means that the country produces less real added value (not just pushing loaned money to your economy). Only in Nordic countries renewable energy hasn’t shoot electricity prices high, and that’s because we have lots of hydropower. This solves the very expensive grid balancing problem.
Tell me about it! Here in Wisconsin we pay 19 cents a kilowatt hour and up in the Pacific Northwest they pay 8 cents with their hydro.
I'm seriously dubious about Ripple. They continually state their customers have some sort of ownership, but that's simply not true. You do not own anything. At best you are a leaseholder in 'common tongue' of a cooperative. Essentially you offset a venture who owns some or all of a generator (partially funded by the Welsh government). All you are really doing is offsetting your home energy bill at quite a high cost - and that source of energy may very well be fuelled by good old dino juice.
Tbh I wouldn't have a problem with this if they were honest about what you're really buying. It's essentially another form ROC in my opinion, ie: Paying someone else to make yourself feel better whilst you get to keep burning a finite resource.
How to fix it, we should focus on building nuclear power instead of relying on renewables. Solar and wind energy can't keep up with demand, which drives up electricity prices. When there's an oversupply, prices drop into the negative, meaning we pay to export electricity, only to import it back later at a higher cost. Taxpayers end up covering these costs through subsidies. Ironically, electricity prices increase as more renewables are built, because they add instability to the grid. This isn’t just a pricing issue, but a result of poor planning and a failure to consider how renewables could harm the broader economy. In fact renewables are not the cheapest in practice.Take Germany as an example. Over the past two decades, Germany has invested more than €500 billion in renewable energy through its 'Energiewende' (energy transition) policy. Despite this massive investment in solar and wind energy, Germany still relies heavily on coal and natural gas to meet energy demands when renewable sources aren't sufficient. In 2023, Germany emitted around 675 million tons of CO2, making it one of the largest emitters in Europe. While the country has increased its renewable capacity significantly, the intermittent nature of solar and wind energy has made it difficult to phase out fossil fuels completely. This has led to higher electricity prices for consumers and continued carbon emissions, illustrating the challenges of relying too much on renewables without a stable, low-carbon energy source like nuclear. This wouldn't cost hundreds of billions either.
well yes, but actually no. this is a false dichotomy.
i would agree that nuclear can be very good option for the base load of energy consumption. (certainly better than fossil)
but on the other hand we definitively should still focus on renewables and in addition we should invest in energy storage and a smart grid. and electrical cars might be able to help with that (yes, thats just energy storage with extra steps)
used to complement each other we could get to net 0 CO2 AND cheaper energy cost in the shortest time.
there just is no one size fits all.
The UKs grid power stations were built near to coal fields, hence why they are down the backbone of Gt Britain. Now generation is coming from the coasts in wind and solar, the power lines are being rerouted.
TBF, I expect coctail places also need to factor in the costs of the bartenders’ wages and leasing the pub. ;)
That is the bit that is equivalent to the standing charge 🙂
Sure but the markup on e.g. beer is _way_ less. Same (additional) costs though.
Thank you for another informative video Simon!
Hi Simon, happy to see an upload! Hope you're well
When you said 'marginal cost' I figured out the rationale and effect. You're charging the price for the 'next joule'. That actually makes a lot of sense... It just begs the question of who gets to pocket the baseline profit.
A bit sloppy
This isn't just marginal pricing, this is a marginal pay-as-clear market.
Pay as clear markets are important in the context of renewables for several reasons.
One you begin outlining at around 6:30 If a source is cheap but intermittent and needs other sources to fill the gaps, then the source isn't that cheap, you need to consider the cost of them together, because the cheap one doesn't function without the other.
It's also important for a structural region, that quantity supplied and demanded have to be very precisely matched, and marginal pricing very effectively does that, with generation coming online when the price exceeds their marginal cost, and users using less when the price exceeds their marginal benefit.
Thirdly it is important for an economic-ecological one: Profits. Because profits are revenue-costs, to the degree to which renewables are cheaper than fossil fuels, marginal pricing makes them more profitable. Because investments are made in what is most profitable and firms use profits to re-invest in themselves, making renewable energy as profitable as possible is the way to make the transition to it go as fast and smoothly as possible. Interfering with this interferes with the incentive to deal with climate change. Marginal pricing is the best way to incentivize the building of enough storage, nuclear, and renewables that gas doesn't need to be relied upon (thus pushing down the price)
Another issue mentioned is that the grid was designed for coal fired plants, the configuration of transmission lines and other infrastructure that is most profitable/lowest cost with coal plants is not the same as configuration of transmission lines and other infrastructure that is most profitable/lowest cost with renewables. New transmission lines and other infrastructure have got to be built to accommodate that.
Thank you so much for this video. I was sceptical of its title and intended to watch and criticise but two mins in I was praising it! The sooner that marginal pricing is replaced the better and if this Labour govt want to actually help people and the planet, they should be working hard to make this happen.
This is such an amazing video! So we'll researched, beautiful graphs, so manifold in questions and perspectives. Love it! It needs more views!!!
Perhaps, for clarity and honesty, it should be mentioned that expressed as an average where in the UK literally everyone has an electrical supply and isn't afraid to use it, vs as an average in China an awful lot of people live outside of developed areas and either have minimal electricity use simply because they don't really have anything but the basics to operate or may not have an electrical supply at all.
The cheapest way to generate electricity, even factoring cost-overuns on projects like Hinkley C and decomissioning, is nuclear. Bar none - and it's a big gap too.
The only way to arrive at that not being the outcome is factoring in - as usually happens - the cost of nuclear weapons programs. Even when you do that it still looks pretty good. France has the lowest pre-tax energy prices on the planet, because most of France's energy comes from nuclear reactors. That isn't an accident. The fix, by the way, is to strip all the subsidies away from installing power generation, all the CFDs, all the subsidies for not generating power and let the market fix itself. Throw in carbon trading/taxes too if you like. In the UK we pay for electrictity like 10 times from install to it reaching our houses, and it has got to stop.
i find the introduction a bit misleading. The comparison between Chinese and the British CO2 emissions in the first few minutes. The first half of the 1900s China was a 3rd world country. with little industry and massive famine a generally a subsistence existence. The UK on the other hand was fighting for the good side of history in 2 world wars and still a world leader in manufacturing. and i would wager the CO2 emissions compared to other European nations would show a similar curve. The last half, The UK ditched its industry and ship it overseas. the Chinese population also means that the UK CO2 emissions are a fraction that of Chinas. The tone seems to be that the UK produce more pollution. This is not the case. However i agree with the overall message that the pricing of the UK electrical grid is terrible.
Marginal pricing was the worst thing to happen to UK electricity since Margaret Thatcher.
Marginal pricing is alright in concept. Pricing is reasonably transparent and suppliers are rewarded for continuing to be more efficient than their competitors.
The issue is that there are two different types of supplies - ones that can vary with demand and ones that don't; these different supplies need to have separate pricing.
@@nullid1492I would say the best way to do it is you buy your electricity through a private provider so they can set the price and compete with each other therefore meaning the customer can take the best deal and the expensive ones go out of business, this will mean people will pay the cheapest price and each method has its advantages and disadvantages put into numbers, the actual grid costs will also be on a per usage cost based off the pure power line costs
@@rhysrailcough, Texas. Cough, cold.
Marginal pricing works just fine in other countries
Marginal pricing is the only way to go. Every other mechanism forces producers to lie about costs.
PPA are being pitched to customers in the USA. It's a 25yr contract to buy energy from the PPA company. They own the solar equipment and they are using your roof and connection to the grid.
You forgot to tell why the gas is so expensive per unit: gas power plants have to pay large capital and maintenance costs whether they sell energy or not, so the price for the energy they sell is almost the same no matter how much energy they sell, the difference being the price of gas. Had they been producing and selling energy without interruption the unit price would be much lower, and they can't be shut down because the "renewables" are in fact intermittent, and not very predictable, and the gas power plants can start faster than coal but not in a fraction of a second so they have to stay on even when they don't sell energy.
The intermittents are a scam without cheap batteries, and cheap batteries are still science fiction.
@@EmilNicolaiePerhinschi Gas is quite difficult to store as well, we manage this because demand has historically been quite predictable but if demand becomes linked to something as unpredictable as wind then this may cause issues. Currently a lot of power stations link directly to pipelines from the North Sea, a lot of this gas is a byproduct of oil production and North Sea operators like to maintain steady production. If oil producers have to shut in production whenever the wind is optimal then that's another energy provider that has to be compensated, ie more cost.
Even if you had cheap batteries most of the studies state they will be 100% charged when you need them and 0% when they can fill up cheap. This just cannot happen.
@@Swwils .... What? Cheap batteries would solve solar and wind erraticness. But sadly they need to drop 90% in price, and that aint happening. It almost is cheaper to just build 10x the normal load in solar and wind and hope somewhere in europe there is sun and wind. Thats how not near we are to using batteries to balance the 3 months that is January to March dark calm time. 10x!!!!!!!!
@@amyself6678 just because you can build cheap batteries doesn't mean the forecast economics work.
@@colinmacdonald5732
Ah, so we shouldn't have torn down all our gas storage tanks!
Pity those planning things don't either have a crystal ball - or consult someone who has - OR actually act with caution when moving in an irreversible direction...
- Beeching and the railway cuts
- Gas storage that we had in every city and most towns, how useful they would be now
- blowing up working coal powered power stations - as yet we don't know if war or volcanic eruptions will make such facilities an eminently sensible ONLY fallback
The simplist way is to use micro nuclear plants, these are like the ones used on subs & aircraft carriers. they are only the size of a couple of containers & can be linked together. we already have the infrastructure to link them into the grid at all the disused coal power stations.
Small distributed nuclear is the only viable option that ticks the demand, maintainability, and security requirements of a modern grid.
Agree to disagree.
Marginal pricing you mentioned is there for a reason.
How would you determine value of a unit of energy otherwise?
You take volume weighted average of each source’s / each company’s / each power plant’s cost? Then why a plant with more expensive cost would generate? They won’t. You might say let them not. Well, they are generating for a reason in the first place: not enough cheaper supply.
You give them a percentage of profit they can make? Well, sometimes wholesale prices will be so low that you won’t be running at all. So, your upside is whatever the government decides and your downside is unlimited considering the investment you’ve made. Why bother? You might say let them not: Who do you think will pay for that lacking unit? The taxpayer because the government will have to fill that gap when there won’t be anymore investment into generation assets.
Well, peaker power is a necessity due to flaws of base load and/or variable renewable power. I would say if you are supplying peak load power as an "on demand" service, you deserve to be paid a premium. Whereas if you are just supplying base load then you should have a different fee. Keep the marginal pricing but with two different pricing models. There are multiple different ways you could set these though. Either way, the cost to the consumer would be reduced. The peaker power suppliers higher pay can easily be justified as they are providing a different service altogether. Maybe this would even incentivize renewable sources to invest in battery tech.
In my country, the grid operator is run by an independent government agency. If the grid is not supplying demand, they can direct market participants to increase supply regardless of the economics. Is the UK grid the same?
We have this issue considerably more than you here in NL, as we have a lot more solar. The only real solution is to switch to nuclear for baseload, or to turn excess power into something useful like storage during peaks. But storing energy is actually quite hard if you dont have hydroelectric dams.
Mix the mojito and crush the leaves it taste better
Look at how the world is dealing with man-made climate change and just drink the rum neat from the bottle...
we have a junk in, junk out problem with bad data. The Lazard cost of electricity based on LCOE which you used has been proved to be incorrect. Lazard/LCOE uses short term costs, and does not include the cost of backup power, new transmission grids, waste disposal/decommissioning of renewables. Simply put, Lazard LCOE compares building tents (renewables) with building brick houses (nuclear). So because renewables are quick to build, but do not last long, there costs appear low. And many other incidental costs of renewables are not included. Renewables appear low cost. Whereas nuclear takes longer to build, but lasts longer and does not need backup or new transmission grids, but lazard does not use 80yr costs of nuclear, where after the first 15yrs of nuclear, nuclear electricity becomes very low cost, but at 15yrs most wind/solar is already broken and useless. Lazard needs to compare 80yrs of renewables to 80yrs of nuclear, plus recycling nuclear waste in a green economy to reuse nuclear waste to generate more electricity. Nuclear power stations have utilization rates of 95% so nuclear power backs up nuclear power. More nuclear power, less backup costs are required. Whereas renewables cannot backup renewables. Cold night across northern Europe and no renewable electricity for 1000's of KMs. So the issue is we are in a false green renewables virtue signaling cycle where we are not honest with costs, decommissioning and having to build two generation systems for renewables, one when renewables work and one generation system when renewables does not work. Taking into account that renewables work (utilization factor) 35% of the time, that is 3 days per week, we need to build another generation system for the 4 days per week renewables do not generate electricity. Summary, build one generation system, 80% nuclear, 10% renewables, 10% hydro/waste recycling and we do not need a backup for renewables. However, this does not meet the problem or appearing green and does not meet the virtue signaling criteria. Conclusion, we have a political/ideological renewable virtue signaling problem which causes high electricity prices, but we cannot admit that wind/solar are the problem, because wind/solar are falsely portrayed as renewables and wind/solar will solve climate change. However, after 20yrs of renewables failures we now see that the answer is not more renewables, no wind/sun plus more wind turbines/solar means no electricity. The scientific problem of renewables of; 0 (sun/wind) x (lots of renewables) = 0 electricity. Very simple problem, but we cannot admit it for political/ideological reasons. Lets not get into the hidden subsidies, and payments to boom bust renewables not to produce. When there is too much sun/wind renewables are paid not to produce, when there is no wind/sun renewables cannot produce of sell electricity. Hence, we have a broken renewables electricity system. Also, ask the question, all the people who installed solar on their rooftops, who will pay to dispose of the old solar panels. Lots of renewable problems we do not acknowledge.
Line breaks.
I _beg_ you.
They could probably replace the gas stuff with nuclear, but I’m no expert.
Not just the gas, but also the intermittent sources that it's backing up because you just run the nuclear all the time.
So cocktail price also includes: Storage cost, electricity for cooling, cost of the venue you are at, cost of chair you sit on, cost of music you are listening to, cost of the place being cleaned after you leave, cost of manager running the place, cost of accountant calculating the costs and so on.. you get my point
Hey Simon. I love your video. I want to offer a recommendation on terminology though.
Electricity grid is the physical machinery that allows to match demand with supply. To my knowledge, that part, the engineering aspect isn't in crisis. What's clearly not working well is the energy market. Market is just a human invention. How do you price things is independent from matching electrical demand with generation and transmission.
The finance model not the physical model is what you are describing here.
I think a lot of the infrastructure up north is not far away from a crisis as it will constrain offshore wind quite a bit
@@charlielyth1982 transmission constraint and lack of storage can indeed be problems, but that wasn't the focus of the explanation of this video.
I'd be interested to know actually how close to crisis actually is though. The typical solution when you have more generation than what you can store or transmit is curtailment. It's not that grid breaks. The wind generator loses though as they can't sell all the energy they are generating
One advantage of owning your own renewable generation is decentralising the generation or power. A fully decentralised power infrastucture could join together in virtual power stations. Ripple does not afford that security.
I live in Oz and our elec. just doubled in price as well. There's no getting away from it, we're being robbed.
How is Oz not running on solar by now? You have year round sunshine, large houses perfect for home solar and a hell of a lot of land that is not suitable for much else.
@@David-bi6lf Tell me about it. Would you believe they're talking wind. Yes people do have solar on their roofs, many people do if only the government would fund it for everyone it would be heaven. Instead they just put the price up and no one is talking solar on the land. 🤑
We’ve got a similar issue in oz with big power companies that manipulate the electricity market to jack up the spot price, despite all the renewables. Won’t change until we have enough wind, batteries or EV’s to smooth out the peaks and put the gas peaker plants out of business.
@@orza1 We should all go solar privately.
@@David-bi6lf Over a quarter of Australian households have rooftop solar already, so we're well on the way as far as generation goes. Storage is another matter. At the moment, home batteries are only worthwhile for new solar systems. If you've already got solar panels, it's just not economical to add them yet.
thanx for yr great work
The UK pricing system is crazy! But the grid has a few problems. You are way behind in storage. The NIMBY's have limited onshore wind. And, your transmission lines need to be recabled to carbon fiber core. The best long duration storage technology is still up for grabs. It may be liquid air, iron air or nickel-hydrogen. We should know in the next 24 months.
The Tories allowed the nimbys to stop on shore wind which was absolutely crazy by stopping them being built if there was just one person object I believe. Labour have seen sense and scrapping that.
The royal (science) society has a great paper on using hydrogen stored in salt caverns
@tiepup Salt-cavern hydrogen is one of the few cost-effective long-duration storage mechanisms, that can be used to deal with seasonal shifting and dunkelflaute conditions. The inefficiency just affects the cost, same as it does for everything else. PV is only 20% efficient, peakers are only 40% efficient; they still make financial and engineering sense.
@@Lewis_StandingHydrogen is garbage for everything, but niche.
Much better options. From thermal, compressed, to chemicsl batteries.
So many in fact that there are no clear winners for energy storage.
Just won't be hydrogen. Already better forms of energy storage, and they are less hazardous.
It is weird Britian doesn't have a ton of storage. Some states in the US found out they can cut costs, and sell electricty high with batteries. So with that, and government subsidizes some states energy storage has been growing substainally the last year or two. Like Texas.
@tiepup If PV and wind is "free", how does the efficiency of storing and un-storing it make it un-free, given that those efficiencies are 'paid' for by 'free' PV and wind in the all-RE scenario? That's a basic arguing error.
That was a real eye-opener. Thank you!
Here before the "ECON 101" crowd will shout at you.
I think most economists would agree that pricing should be based on supply and demand. Not pegged to some other arbitrary commodity value.
I like economics and enjoyed taking several upper-division econ courses in college. The thing the "econ 101" crowd doesn't seem to realize is that pretty much everything after 101 is about how what you learned in 101 isn't quite right. That's true of many disciplines, not just econ... but the false sense of competence/expertise in econ does seem to be particularly bad.
Do your homework on ripple if you are interested, I love what they are trying to do but the numbers aren’t great, speaking as an investor (I’m also a bit bitter my supplier isn’t supported and I’m not prepared to switch)
Get solar panels, large batteries in your home and side connect the solar panels so that they work independent from from the electric grid. That way, if there's a power outage you have power and the solar panels continue to work and generate power. There are now technical solutions that work with both the electric grid and solar panels in home.
That’s what worked best for me. Being off grid,the small system can be payed for with cash, and is easily scaled up DIY without coordinating with anyone else. It is essentially like having a generator that you use when and how you want to.
I have progressively increased my battery bank to 65 KWH so I can benefit from hourly rates. Presently in Texas we can pay double in daytime and free at night. That works good with off grid solar.
We use victron for off grid systems
Yep. Though I just have small batteries... enough to keep lights, communications, and refrigerator/freezer running for a nice long while, and to keep the microinverters on the solar panels happy and generating.
I do intend on increasing the battery capacity, but right now there really isn't much of a point given the way net metering is done here. However, I do expect that to change, and then I'll put in enough to do some load shifting.
the video title and message is flat out wrong, the _grid_ isn't broken, the policies and etc. are broken. There's nothing wrong (at least as stated in your video) with the actual grid, and the science and engineering of it, the problem is just how people are billed as to their usage of energy.
All you need is a slight change, call it 'electrical grid pricing' or whatever, and it's not blatantly incorrect, but that doesn't get views, does it?
other than that, and disregarding the clickbait, the video was good. I quite liked how it did actually offer solutions, and things people themselves can do.
That's only part of the problem. The grid is broken in a real engineering sense because when you look at the best places to generate renewable energy they are nowhere near the places where the big old coal-fired power stations were that used feed the grid. In particular there is a big capacity problem at the B6 boundary between Scottish Power and NESO. This is why there are sub-sea HVDC cables being planned between both west and east coasts of Scotland and England. Your 'slight change' shows you don't understand the technical problems.
3:50 - it is variable cost, not total cost in LCOE. This high margins for renewables are insetive to get it more installed in grid.
10:00 - Coperatives are "working" becouse they do not have to pay real price for upkeep of grid and firm capacity for time with no solar and low wind production.
please persuade me i have it wrong. i explored ripple and ran the numbers and concluded the majority of value went to ripple and energy monopoly energy suppliers. - cant you share your maths?
We love Co-Ops 🗣️🗣️🗣️
I work in energy as an Analyst albeit off grid. Totally get how they do it. It's like worst case scenario pricing. In the event we cant produce from the "Unreliable" green energy imports would cost more hence maintaining a margin using those imports as a benchmark. Plus if we use oil or gas as a top up, this would mean more expensive hedge pricing because you cant predict the weather.
In other words its more expensive to buy gas if your not buying a lot of it upfront before you need it. And since green energy is tempramental you can predict exactly how much youl need.
But i do think green energy storage should fic this. Things such as sand batteries, gravity batteries lithion ion etc but theres costs for those of course
Tories put a defacto ban on on-shore wind turbines. The cheapest method to generate electricity in UK.
Yep, David Cameron. But hey, at least he then fucked off and left us in the lurch after the Brexit referendum so it's not like he's _all_ bad qualities. Oh wait...
It's not the cheapest method to generate at all.
@@SwwilsGot any stats? This is a science channel after all
@@Tintersurf you can look at the cfd for any wind farm project. They can't even BUIlD them on cost let alone operate them cheaply. This is a huge huge problem for a grid that ultimately works on physics.
There is a flaw in using pure leveled cost to compare energy sources in the way this video does. An average net present cost of electricity generation for a generating plant over its lifetime is deeply flawed for this basis.
You should instead think of the value, the energy provides and then also have the capture price in mind. This gives you a far more realistic and easy to understand concept of cost.
Yes. Renewables would be extremely cheap if a 100% renewable grid with storage popped into existence. But it hasn't, it can't suddenly and we literally do not have the technology, not capital for that scale of storage. So if we are comparing fantasy - it would be far far more sensible to put that expenditure into nuclear - as it wouldn't need the storage and the energy costs would be cheaper.
I am happy to discuss further but the size of kill you would need to achieve true cost effectiveness at grid scale is so so unfathomably large that it makes little sense.
@@Swwils While I'm a proponent for a diverse energy mix containing a nuclear base load the cost assumptions you make here are not correct.
All forms of the current deployments of wind power have the lowest energy cost per MWH, again i do understand the need for a diverse mix of power sources.
and i bring sources (admittedly US but what's a country between friends) -www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf
Brilliant video Simon!
I just watched the Community channel and read this title as "How Britta broke its electrical grid"
She Britta'd that as well
"Oh Britta's in this?"
I'm kinda concerned if the UK's switch from coal to gas is an actual improvement. did someone calculate the impact of fugitive gas emissions compared to the coal emissions ? because we can't just compare CO2 emissions, we need to take the emissions from fossil fuel gas into consideration.
Most coal was replaced by wind power. While the generation from gas stayed constant. So it is not that much of a switch. But yes methane is a huge problem, but also exists at coal mines.
I think you misunderstood. The coal power stations weren't replaced by gas. We always had the gas peaker plants because coal power stations weren't able to respond to rapid changes in demand. We have actually reduced our usage of gas.
Full nationalisation also needs to be considered. From production to consumer, without a profit incentive electricity prices could be slashed. Rising prices have led to private companies or even foreign states profit in the UK to skyrocket.
British Gas Energy had a profit of 720 million in 2023, 10 times higher than 2022. EDF, owned by the French state, massively profits from the UK, allowing French electricity to be some of the most affordable in Europe as us in the UK essentially subsidise French electricity for no gain ourselves.
With nationalisation, this system of financial greed would be done away with, with the profits we've seen they could easily reduce energy prices (much easier to scrap marginal pricing without private companies) and invest profits into grid storage and green production and research, including non-intermittent forms like nuclear, geothermal, and tidal.
It would also get rid of the pretty concerning amount of CCP investment/partial ownership in British Energy.
Edit: Spelling
Of the grid at least, yep. I'm also fine with e.g. publicly owned (i.e. basically non-profit) companies _competing_ with the private sector and so, hopefully, keeping prices down. But i'm not sure it's financially feasible to renationalise all the energy providers.
(don't get me started on water though, holy mother of Del Boy should that _never_ have been privatised. Usual suspect to "thank" for that of course :)
Solar is great in the UK in summer when they days are long, the sun shines brightly (hmmmm) and electricity demand is low. Unfortunately in the winter the days are short the sun is feeble, it is cold, solar panel output is a small fraction of what you get in summer and electricity demand is high. Sadly we don't have long term storage and probably never will. For example most utility scale battery storage is rated for 4 hours supply. Which is why we use gas.
Gas power generation has two costs: the cost of the gas consumed and the cost of building and running and maintaining the gas plants. The more wind power we install the less we run the gas plants so the less gas we burn but the other costs don't fall. Those costs still need to be paid but compressed into just the time the gas plan is running. This is very very expensive and all the other energy providers will get paid that eye watering sum from the customers pocket. The energy pricing model is incentivizing the power producers to fulfill most of the demand but not enough to not have to use gas.
How is home roof-top wind generation coming along?
Can they be powerful enough to make a difference without being that intrusive, as to breach planning permission regulations?
So let’s bring the batteries online and get the gas peaker plants a run for the money
Already happening.
yes a great idea. how much does it cost per minuet of battery storage for the uk? its in the billions.
Hmm, I'm not convinced that's the best approach. Batteries are still very expensive. I think we should keep the gas plants for now and focus on phasing out oil. Having those gas plants as backup should allow us to depend on renewables for most of the time.
You can't build batteries that big.
@@Kian139 depends on use case
Just so you know - 10kW solar plant cost 3k euros, 4k with all installation hardware, on standard sloped roof. Easily DIY. Less if you can get some incentives (in Lithuania it’s ~2K eur).
Is this really a video to criticise marginal pricing? What's the alternative? To pay differently to different producers of the same product (⚡)?
Marginal pricing makes it more valuable to build wind and solar power in a land with more expensive power, this is the point. Not having this would also lead to higher prices of electricity, since all wind would be built on the most technical suitable sites, not where the electricity is needed. Listen to Montel weekly for a good source of information on the energy market.
If you call wind and solar power unpredictable you haven't heard of weather forecast I guess. We can with high accuracy predict how much sun and wind power there will be on the next-day-market. Flexibility from this is payed by the power producer or a flexibility market. Not the electricity price.
The issue is that there are two different products: electricity sources that can vary with demand and ones that don't. These distinct products require distinct pricing. This was my interpretation of the video.
the point is it is not the same product- one is not guaranteed and controllable (without investment in storage and grid upgrades), and the other is on demand, controllable, but is more costly to produce and unsustainable. off peak pricing is already a thing in some earas. calling it the same product is like calling a private helicopter and a public train the same product because they are both transport- where clearly they justifiably have different costs and utility
Marginal pricing is certainly good for people at the lower end of the pricing curve, but it's not obvious that it's producing optimal pricing for the country as a whole. The regional pricing model which is getting some traction is certainly interesting. It's has worked quite well for decades in Scandinavia, and would certainly reduce constraint payments so we actually got to use & make more renewable power.
Simon's take is overly simplistic. You're correct. Paying only the bid price makes it unfeasible to bid low.
> If you call wind and solar power unpredictable you haven't heard of weather forecast I guess. We can with high accuracy predict how much sun and wind power there will be on the next-day-
That we can predict solar/wind is mostly irrelevant.
Presume you have 100 wind turbines which meet your entire country's demand load today. You predict half the wind tomorrow. Do you:
* turn up the little dial on the base of the wind turbine to get more electricity?
* build another 100 wind turbines (in less than 24 hours)?
* declare this is for the birds, beg your neighbors for juice and start building a nuclear power plant that doesn't depend upon the vagaries of the weather?
Amazing video dr simon clark!
Damn, that pricing scheme is wack!
The prices for solar at 8:54 are very outdated. You can easily slash those in half. Price goes down every year, and there is currently a big oversupply due to China trying to corner the market. a 10 solar panel set up with expensive micro inverters in NL would run you around 4000-5000 euros. Depending on the kind of roof you have. That is not a huge sum for a two income household. And 350 watt panels are barely even sold anymore, the minimum standard is at 420 ish watt these days, and going up fast.