The answer is it is superficially attractive and might work – but is also more complex and might not.Â
bow_down_whelp on
Northern Ireland is one of the poorest parts of the UK and our unit rate is going to 31p
Delicious_Shop9037 on
This should have been done years ago. We are the only country to shaft ourselves in this manner.
tomdon88 on
They need to do this, as even if you imagine we have 120% of renewables available to serve our needs. What should happen is the assets owners compete on price to be included in the 100% needed, the cost will then be floored at the marginal cost of production (close to zero for renewables).
As it stands the renewable production owners would be incentivised to create demand to get to the point that gas is needed, they may for instance mine for bit coins, or bring in power hungry data centres or simply turn electricity into heat on an industrial scales. At the same time they may switch off some of their network, and export more power to the continent. All just so gas has to be used to meet the marginal demand. As then they get paid potentially multiple times more for exactly the same energy.
Few-Proposal-4681 on
>Â He has proposed a system where each generator gets paid the price they actually bid to sell the electricity – not the highest price on the market – which he argues would reflect the truer, cheaper cost of renewables.
Is that really it? This seems incredibly naive. Generators will just start bidding the highest price on the market. Except now with less profit for reinvestment as they’ll have to pay a bunch of finance bros to forecast that price.
All these articles always seem to imply the marginal pricing system is purely government policy, and don’t address the fact marginal pricing is an inevitability due to market forces in a perfectly fungible market.Â
Cholas71 on
Looking at doesn’t sound that serious to me. It’s horrendously complex and I only understand the basics (we need a fleet of gas generators just sitting there and no business is doing that for free) more so that so much of our power is intermittent wind/solar.
Veloxxx_ on
Nuclear is the best investment at this point, all renewables including it have their issues but nuclear would be the cheapest and safest option out of them all.
Nuclear fuels are also quite abundant and produce literally 0 emissions
hoopjoness on
Anyone interested in solar bc of the prices I can’t recommend it enough. I wasn’t expecting it but even make a profit every month selling unused household energy back to the grid.
sprocket314 on
This is what Spain did and it worked massively well. The UK should totally do this.
InformationNew66 on
This has been asked for 4 years, since russia attacked ukraine.
And nothing has been done, just promises. I am sure it won’t be done now either.
10 Comments
There’s an interesting explainer on this here.Â
https://www.carbonbrief.org/qa-why-does-gas-set-the-price-of-electricity-and-is-there-an-alternative/
The answer is it is superficially attractive and might work – but is also more complex and might not.Â
Northern Ireland is one of the poorest parts of the UK and our unit rate is going to 31p
This should have been done years ago. We are the only country to shaft ourselves in this manner.
They need to do this, as even if you imagine we have 120% of renewables available to serve our needs. What should happen is the assets owners compete on price to be included in the 100% needed, the cost will then be floored at the marginal cost of production (close to zero for renewables).
As it stands the renewable production owners would be incentivised to create demand to get to the point that gas is needed, they may for instance mine for bit coins, or bring in power hungry data centres or simply turn electricity into heat on an industrial scales. At the same time they may switch off some of their network, and export more power to the continent. All just so gas has to be used to meet the marginal demand. As then they get paid potentially multiple times more for exactly the same energy.
>Â He has proposed a system where each generator gets paid the price they actually bid to sell the electricity – not the highest price on the market – which he argues would reflect the truer, cheaper cost of renewables.
Is that really it? This seems incredibly naive. Generators will just start bidding the highest price on the market. Except now with less profit for reinvestment as they’ll have to pay a bunch of finance bros to forecast that price.
All these articles always seem to imply the marginal pricing system is purely government policy, and don’t address the fact marginal pricing is an inevitability due to market forces in a perfectly fungible market.Â
Looking at doesn’t sound that serious to me. It’s horrendously complex and I only understand the basics (we need a fleet of gas generators just sitting there and no business is doing that for free) more so that so much of our power is intermittent wind/solar.
Nuclear is the best investment at this point, all renewables including it have their issues but nuclear would be the cheapest and safest option out of them all.
Nuclear fuels are also quite abundant and produce literally 0 emissions
Anyone interested in solar bc of the prices I can’t recommend it enough. I wasn’t expecting it but even make a profit every month selling unused household energy back to the grid.
This is what Spain did and it worked massively well. The UK should totally do this.
This has been asked for 4 years, since russia attacked ukraine.
And nothing has been done, just promises. I am sure it won’t be done now either.