Entirely foreseeable. When renewables are under-performing, the National Grid is under pressure to keep the electricity supply system afloat, giving fringe providers an obvious earning opportunity as there are only a limited number of them able to offer such a service, and time is short. As long as renewables are given priority and are increasing their share of the market, everything else has to cover its fixed costs with a shrinking share, forcing prices up. It’s an inevitable result of the UK government’s climate-obsessed policies on power generation.
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The power industry is concerned some companies could be making massive profits on the occasional days when renewable electricity generation slumps, says Sky News.
Generators which step up to fill those gaps are charging record prices to “balance” the supply of electricity as our power grid rapidly shifts towards net-zero.
The costs are paid by the industry, but are ultimately passed on to bill payers.
They make up only a few percent of the total cost of an electricity bill – but the extra burden is coming at a time when energy prices are already soaring.
The latest data, analysed for Sky News, shows consumers will end up paying a record £2.6bn on their bills due to the costs of balancing the electricity grid in 2021.
And it looks set to continue this year, with just one day last week costing more than £40m. Compare that to typical daily “grid balancing” costs of around £2m.
The high prices are in part due to the record high wholesale cost of gas, but there’s evidence that some electricity generators are charging much higher prices to increase generation on days when flows of electricity from wind and solar plants fall.
“The pricing seems very high compared to normal,” Darren Jones MP, chair of the business, energy and industrial strategy committee, told Sky News.
“What we need to understand is how much of that is related to the price of gas given the international gas crisis, and how much of that is due to potential bad behaviour of generators who are quite frankly taking the mick in order to make excessive profits.”
Ensuring a steady supply of electricity means engineers at National Grid ESO, which manages the grid, have to constantly work with generators to manage supply.
On days, or hours, when there is low wind, National Grid takes bids from suppliers to fill the gap through something called the “balancing market”.
But in recent months, balancing market costs have been rising exponentially.
Full article here.
via Tallbloke’s Talkshop
February 5, 2022, by oldbrew
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