UK Energy Crisis

jakehake

Preachs PA
Staff member
Patron
3204E6CB-E0A7-4E7F-9712-81EEDB35F658.jpegWell crisis may not be quite there yet but we’ve had a fire on one of our cross channel links that limits its capacity into next year. Wholesale prices are through the roof. 2 companies went bust on the same day this week, 4 have lined up to go bust next week according to the BBC. Reading that there were 70 providers as we started 2021 and there is a real concern we could end 2021 with 10 due to the perilous state of lots of the small providers who just don’t have the resources to weather this price volatility.


No idea how true this chart is and it misses off some big countries but the disparity in costs is a big worry if even a glimmer of truth.


We really need a coordinated plan and energy service regardless how we want the country to move forward. Yet again critical public infrastructure left to its own devices and we end up in a sorry state
 

Snicky

Thorium Indium Potassium
Patron
If only we had a readily available supply of on shore, good quality gas to ease the burden created by this very problem…….
 

Sepp Blatter

Liz Truss Groupie
Patron
View attachment 4713Well crisis may not be quite there yet but we’ve had a fire on one of our cross channel links that limits its capacity into next year. Wholesale prices are through the roof. 2 companies went bust on the same day this week, 4 have lined up to go bust next week according to the BBC. Reading that there were 70 providers as we started 2021 and there is a real concern we could end 2021 with 10 due to the perilous state of lots of the small providers who just don’t have the resources to weather this price volatility.


No idea how true this chart is and it misses off some big countries but the disparity in costs is a big worry if even a glimmer of truth.


We really need a coordinated plan and energy service regardless how we want the country to move forward. Yet again critical public infrastructure left to its own devices and we end up in a sorry state
Just to add some context to that diagram - it does indeed look as if wholesale electricity prices across Europe are going to rise steeply (Have seen 30 - 40% over winter) as a ballpark figure.

However, that diagram has taken a snapshot at a particular time. The UK next day wholesale price peaked at that level on one day, but that isn't the same as saying it is always going to remain that much higher than anywhere else.

Due to the fire, low winds, high gas prices, and a few other issues (a perfect storm), traders went apeshit, so the price rise reflected market panic rather than the real cost of electricity. Hopefully, that will decline and UK prices will reflect European/Global prices a lot more.

If not, then that will indeed be a big problem.

The energy wholesale market is a commodity market like any other, and prices can be very volatile. You can only really look at long term trends rather than fluctuations.

Bang on with the final point, though - the UK always had good energy policies, but has slipped down the rankings in recent years. Needs rethinking.
 
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jakehake

Preachs PA
Staff member
Patron
Just to add some context to that diagram - it does indeed look as if wholesale electricity prices across Europe are going to rise steeply (Have seen 30 - 40% over winter) as a ballpark figure.

However, that diagram has taken a snapshot at a particular time. The UK next day wholesale price peaked at that level on one day, but that isn't the same as saying it is always going to remain that much higher than anywhere else.

Due to the fire, low winds, high gas prices, and a few other issues (a perfect storm), traders went apeshit, so the price rise reflected market panic rather than the real cost of electricity. Hopefully, that will decline and UK prices will reflect European/Global prices a lot more.

If not, then that will indeed be a big problem.

The energy wholesale market is a commodity market like any other, and prices can be very volatile. You can only really look at long term trends rather than fluctuations.

Bang on with the final point, though - the UK always had good energy policies, but has slipped down the rankings in recent years. Needs rethinking.
I saw the charts the other day and the main issues was peak hours like 7-8pm hitting the absolute cap of something like £4500MwH which distorts things but seemingly shows the market expects the prices otherwise no one would pay it.

It’s mostly just highlighted that free market in something as critical as gas and electric is counter productive. Be interesting how many people are happy that Bulb or whoever gave them a £50 welcome bonus when they realise that marketing budget is what will screw these companies over when they suddenly have to pay more for their gas/electric wholesalers and you get stuck in no mans land with no real supplier and a credit balance you might not be able to access for some months

Add it to the NI increase next year and fuel poverty can go back to the top of the charts
 

Sepp Blatter

Liz Truss Groupie
Patron
I saw the charts the other day and the main issues was peak hours like 7-8pm hitting the absolute cap of something like £4500MwH which distorts things but seemingly shows the market expects the prices otherwise no one would pay it.

It’s mostly just highlighted that free market in something as critical as gas and electric is counter productive. Be interesting how many people are happy that Bulb or whoever gave them a £50 welcome bonus when they realise that marketing budget is what will screw these companies over when they suddenly have to pay more for their gas/electric wholesalers and you get stuck in no mans land with no real supplier and a credit balance you might not be able to access for some months

Add it to the NI increase next year and fuel poverty can go back to the top of the charts
Fully agree - free energy markets can be very damaging (The Enron energy crisis and blackouts were nothing to do with inability to meet demand and everything to do with price manipulation). A lot of these smaller companies, because they don't generate power and simply make money from wholesale energy market trading, were always going to be a risk.

Think you are right about fuel poverty (the news here has talked about it a lot). Found this page that gives an idea of the longer term trends in energy prices - and they are pretty grim reading.


Some ideas about why it is happening and how it will play out.

 

222Mark

Serial killer of note
Staff member
Patron
Renationalise the nuclear industry, invest in small modular reactors and that's the countrys electricity problem covered, especially when in a few years time we're all supposed to be charging our cars at night on top of the already ridiculous demand to the grid. I see they've even been forced to fire up a coal power station recently, surely that's not in the government's net zero carbon plan.

You can keep tabs on what's being used in the UK on this link


 
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PNEESSEX

Forum Patron
Patron
I saw the charts the other day and the main issues was peak hours like 7-8pm hitting the absolute cap of something like £4500MwH which distorts things but seemingly shows the market expects the prices otherwise no one would pay it.

It’s mostly just highlighted that free market in something as critical as gas and electric is counter productive. Be interesting how many people are happy that Bulb or whoever gave them a £50 welcome bonus when they realise that marketing budget is what will screw these companies over when they suddenly have to pay more for their gas/electric wholesalers and you get stuck in no mans land with no real supplier and a credit balance you might not be able to access for some months

Add it to the NI increase next year and fuel poverty can go back to the top of the charts
Electricity prices are a huge issue in Spain at the moment.....the government is trying to do something about it.

 

Bardas

Forum Patron
Patron
Renationalise the nuclear industry, invest in small modular reactors and that's the countrys electricity problem covered, especially when in a few years time we're all supposed to be charging our cars at night on top of the already ridiculous demand to the grid.

.....along with continued rapid expansion of variable Renewables, and investment in Storage Technology and an integrated Distribution Network.
 
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jakehake

Preachs PA
Staff member
Patron
.....along with continued rapid expansion of variable Renewables, and investment in Storage Technology and an integrated Distribution Network.

Providing everyone with power sounds a bit communist. It’ll never catch on

Anyway I’m sure the Government are doing the very best they can in difficult circumstances. Just Imagine if Jeremy Corbyn was in charge how much worse the decisions would be etc etc🤔
 

Sepp Blatter

Liz Truss Groupie
Patron
.....along with continued rapid expansion of variable Renewables, and investment in Storage Technology and an integrated Distribution Network.
Yup - still a few technological challenges to work on, but we are almost there.

Encouraging local networks should be a big part of the plan - makes the grid much more resilient and able to cope with problems.
 
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jakehake

Preachs PA
Staff member
Patron
One of the two companies mentioned that went bust last week was Preston-based PFP energy.

Think they went earlier in the month along with another company, were they linked to the other company that went bust a couple of years back that was based in Broughton at the crossroads?

Was Peoples Energy and Utility Point I think last week. Does feel a bit of a tidal wave. If these other 4 do go this week wonder what the actual impacts on the bigger companies who likely will survive but have to mop up all these new customers and their debts/credit which normally will detract in the overall customer service to existing customers (not that they tend to have good customer service in the first instance anyway)
 
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