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“ It will bring more than £500 million in savings for UK consumers in the first ten years.” If you believe that I have a monorail to sell you! Why pass onto co

by altacc 3y ago

“ It will bring more than £500 million in savings for UK consumers in the first ten years.” If you believe that I have a monorail to sell you! Why pass onto consumers what you can take as profit. Norwegian news is reporting that the price of electricity will increase a tiny amount (about £10-15 a year) in both Norway & the UK as an increased flow of power means more bidders for it, pushing the price up when power is scarce (which seems to be most of the time). https://www.nrk.no/sorlandet/ny-kraftkabel-kan-fore-til-dyrere-strom-1.16694950 https://www.nrk.no/sorlandet/ny-kraftkabel-kan-fore-til-dyre...

OscarCunningham 3y ago
£500 million over 60 million people over 10 years is £1 per person per year. I can believe it.
- louthy 3y ago
  67 million people (as of 2020, so probably not far off 70m now)
- jonplackett 3y ago
  But we had to spend 1.7 billion. So looks like we need to wait 37 years for payback…
  - OscarCunningham 3y ago
    I don't know if the UK government paid the full amount, but £50 million a year for £1.7 billion is a 2.9% interest rate, which is approximately sensible.
tonyedgecombe 3y ago
>Why pass onto consumers what you can take as profit. Because other suppliers will outbid you. >Norwegian news is reporting that the price of electricity will increase a tiny amount (about £10-15 a year) in both Norway & the UK as an increased flow of power means more bidders for it, pushing the price up when power is scarce (which seems to be most of the time). That doesn't make sense, if energy is scarce in one country but not the other then the additional supply should lower prices.
- hardlianotion 3y ago
  The interconnector is with Denmark, which is connected to other countries as well. Presumably it is this extra demand that could cause the price rise.
  - tonyedgecombe 3y ago
    >Presumably it is this extra demand that could cause the price rise. The cable works both ways. Having an inter-connector opens the market to a larger pool of suppliers on both sides of the cable. You would expect this to lower prices rather than increase them.
- ta1243 3y ago
  It will lower the peaks of the prices, but at the same time increase the depths. Currently those on market driven tarrifs can sometimes get paid to take electricity, and certainly have low prices. For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh With Denmark able to buy 1GW this will increase demand at the cheapest bits (when supply is high), but with Denmark able to sell 1GW it will increase supply and thus drive lower price. The majority of people in the UK don't pay market prices for electricity and instead pay a government set "cap" which is based around hiding the actual cost in the marketing material because far too many people in the UK don't understand what you can do with 1kWh or how it affects your bill - some people on think that turning 30W of LED lights off makes a material difference to the monthly cost they pay for example.
  - tonyedgecombe 3y ago
    >For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh I understand that, the market is trying to deal with an inefficiency in the system. What I don't understand is how removing those inefficiencies will lead to higher prices. If anything it should do the opposite. The cap is incidental, I don't like it but it doesn't really have much to do with this.
ta1243 3y ago
> If you believe that I have a monorail to sell you! Why pass onto consumers what you can take as profit. That's about 15p per month per household

by altacc 3y ago

OscarCunningham 3y ago

£500 million over 60 million people over 10 years is £1 per person per year. I can believe it.

louthy 3y ago
67 million people (as of 2020, so probably not far off 70m now)
jonplackett 3y ago
But we had to spend 1.7 billion. So looks like we need to wait 37 years for payback…
- OscarCunningham 3y ago
  I don't know if the UK government paid the full amount, but £50 million a year for £1.7 billion is a 2.9% interest rate, which is approximately sensible.

tonyedgecombe 3y ago

>Why pass onto consumers what you can take as profit. Because other suppliers will outbid you. >Norwegian news is reporting that the price of electricity will increase a tiny amount (about £10-15 a year) in both Norway & the UK as an increased flow of power means more bidders for it, pushing the price up when power is scarce (which seems to be most of the time). That doesn't make sense, if energy is scarce in one country but not the other then the additional supply should lower prices.

hardlianotion 3y ago
The interconnector is with Denmark, which is connected to other countries as well. Presumably it is this extra demand that could cause the price rise.
- tonyedgecombe 3y ago
  >Presumably it is this extra demand that could cause the price rise. The cable works both ways. Having an inter-connector opens the market to a larger pool of suppliers on both sides of the cable. You would expect this to lower prices rather than increase them.
ta1243 3y ago
It will lower the peaks of the prices, but at the same time increase the depths. Currently those on market driven tarrifs can sometimes get paid to take electricity, and certainly have low prices. For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh With Denmark able to buy 1GW this will increase demand at the cheapest bits (when supply is high), but with Denmark able to sell 1GW it will increase supply and thus drive lower price. The majority of people in the UK don't pay market prices for electricity and instead pay a government set "cap" which is based around hiding the actual cost in the marketing material because far too many people in the UK don't understand what you can do with 1kWh or how it affects your bill - some people on think that turning 30W of LED lights off makes a material difference to the monthly cost they pay for example.
- tonyedgecombe 3y ago
  >For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh I understand that, the market is trying to deal with an inefficiency in the system. What I don't understand is how removing those inefficiencies will lead to higher prices. If anything it should do the opposite. The cap is incidental, I don't like it but it doesn't really have much to do with this.

ta1243 3y ago

> If you believe that I have a monorail to sell you! Why pass onto consumers what you can take as profit. That's about 15p per month per household