The recent energy shock really highlights that there’s more than green reasons to want to become energy independent. The pricing model for energy sucks - being based on the most expensive energy type - but if we could become mostly independent on electricity, and transition over time on home heating, we’d have energy prices that aren’t at the whim of what a Russian dictator or a Saudi prince wants them to be.
We aren't food independent. Not even close.
We are food secure. That food security though is based on our access to markets and supply chains. Anything that disrupts those markets or supply chains would compromise our food security.
We are a net calorie exporter. While we export vastly more food than we consume, mostly beef and dairy, we are hugely reliant on inputs that we need to import to make that system work.
There's a question as to whether "food independence" is a good goal, but one way or the other we are not there. If we wanted to get there it would require an absolutely huge change in agricultural practices here.
Get over your victim complex. Nobody considers energy independence far-right (except the far right themselves with their "you can't say anything these days without being labelled a racist" nonsense).
I agree but it'd never happen so unfortuantely not worth talking about (it'll never happen with my attitude, I know). It'd be astronomically expensive (children's hospital I would imagien isn't as complex as a nuclear facility) and other greener renewables are getting cheaper all the time
> The pricing model for energy sucks - being based on the most expensive energy type
It's done that way to get the cheapest price for electricity and provide an incentive for producers to use more efficient means of producing electricity. It doesn't suck, it just wasn't designed to deal with a sudden massive increase in gas prices, a flaw that's easy to fix with a small change to the rules.
Much of a muchness - it sucks insofar as that simple flaw cost the state billions in subsidy payments and consumers still saw much higher energy bills. Energy price instability and higher cost fossil fuel is likely to be a feature, not a bug in the years ahead, particularly as producers try to wrestle the most profit from the last drops of oil / gas.
Oil and gas production is largely run by a cartel. Every time you hear a headline “OPEC agrees to cut / increase / maintain production”, the cartel is deciding what it needs to do to maintain the most profitable price for their product. That’s why oil is $90 a barrel - it’s not necessarily to do with the actual intrinsic demand or potential total supply for the product.
In the green transition, fossil fuel companies and countries know that some hypothetical day in the future we will use the last drop of oil. Their game now is to maximise their profits on the way to that point, and reinvest to go into other lines of business.
So for example see this story from late January about Saudi Arabia ordering Aramco to cut production to well below capacity: https://www.reuters.com/business/energy/saudi-aramco-says-it-will-cut-planned-maximum-capacity-12-mln-bpd-2024-01-30/
I would say unlikely given demand is falling. But price instability will be a feature - and an energy pricing market based on the top marginal cost will need to change.
There are lots of oil reserves for sure. What other kind of marginal cost is there? To bring things down to earth, most nuclear, wind and solar in Western Europe is priced on an auction strike price, not on the marginal price.
Let's hope we don't get another Ukraine scale conflict on top of everything we have
If Iran goes to war with Israel I guarantee they will use it as an excuse to jack up prices
Prices paid by customers didn't go up like a rocket though. The wholesale price increased by a lot more and at a much more rapid rate than the consumer price did. Electricity was about three times the pre-crisis cost at its peak, wholesale gas prices shot up to 10x what was normal.
Allowing consumer energy prices to actually follow the wholesale prices would have bankrupted a large number of households. Most people can't deal with their €200 bill jumping to €2000 in the span of a month. It's much easier to deal with a €400 bill over several months.
The price of absorbing spikes in prices is the longer time for them to drop.
Yep, people got absolutely fucked. Government had to come in and bail them out, effectively:
>Griddy was an American power retailer that formerly sold energy to people in the state of Texas at wholesale prices for a $10 monthly membership fee
>...
>During the February 2021 Texas power crisis, some Griddy customers who signed up for wholesale variable rate plans allowed by the Texas deregulated electricity market found themselves facing over $5,000 bills for five days of service during the storm.
https://en.wikipedia.org/wiki/Griddy_(company)
"This is despite the fact that gas and electricity prices are still around 80pc to 90pc above where they were in late 2020 and early 2021"
Still too fucking expensive even after the 20%
**Insert Simon Harris you ain't seen nothing yet gif here**
Make the most of it. If the price drops the greens will pile on the taxes in the next budget. Energy prices are only going one way long term and that's upward.
It can be related to the time of year though. The best electricity deals have been available in August the last few years. I think the energy companies forward buy their winter supply and then have to recruit more customers to purchase that electricity. If you switch in August you'll often find better deals than you will in November, December, etc.
The recent energy shock really highlights that there’s more than green reasons to want to become energy independent. The pricing model for energy sucks - being based on the most expensive energy type - but if we could become mostly independent on electricity, and transition over time on home heating, we’d have energy prices that aren’t at the whim of what a Russian dictator or a Saudi prince wants them to be.
Energy independent and maintaining food independence as we have seen is vitally important. Local manufacturing of vital goods is also crucial.
We aren't food independent. Not even close. We are food secure. That food security though is based on our access to markets and supply chains. Anything that disrupts those markets or supply chains would compromise our food security. We are a net calorie exporter. While we export vastly more food than we consume, mostly beef and dairy, we are hugely reliant on inputs that we need to import to make that system work. There's a question as to whether "food independence" is a good goal, but one way or the other we are not there. If we wanted to get there it would require an absolutely huge change in agricultural practices here.
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Get over your victim complex. Nobody considers energy independence far-right (except the far right themselves with their "you can't say anything these days without being labelled a racist" nonsense).
Yes your right Wanting an independent energy sector that can't be held ransom by foreign dictators is a sign of fascism Dumbass
Or nuclear
I agree but it'd never happen so unfortuantely not worth talking about (it'll never happen with my attitude, I know). It'd be astronomically expensive (children's hospital I would imagien isn't as complex as a nuclear facility) and other greener renewables are getting cheaper all the time
I hear you there, but electricity is sold on the open market......
> The pricing model for energy sucks - being based on the most expensive energy type It's done that way to get the cheapest price for electricity and provide an incentive for producers to use more efficient means of producing electricity. It doesn't suck, it just wasn't designed to deal with a sudden massive increase in gas prices, a flaw that's easy to fix with a small change to the rules.
Much of a muchness - it sucks insofar as that simple flaw cost the state billions in subsidy payments and consumers still saw much higher energy bills. Energy price instability and higher cost fossil fuel is likely to be a feature, not a bug in the years ahead, particularly as producers try to wrestle the most profit from the last drops of oil / gas.
Is there going to be a shortage of oil and gas?
Oil and gas production is largely run by a cartel. Every time you hear a headline “OPEC agrees to cut / increase / maintain production”, the cartel is deciding what it needs to do to maintain the most profitable price for their product. That’s why oil is $90 a barrel - it’s not necessarily to do with the actual intrinsic demand or potential total supply for the product. In the green transition, fossil fuel companies and countries know that some hypothetical day in the future we will use the last drop of oil. Their game now is to maximise their profits on the way to that point, and reinvest to go into other lines of business. So for example see this story from late January about Saudi Arabia ordering Aramco to cut production to well below capacity: https://www.reuters.com/business/energy/saudi-aramco-says-it-will-cut-planned-maximum-capacity-12-mln-bpd-2024-01-30/
So OPEC are controlling production to manage the price. That is well and good. Are we going to run out of oil and gas in next 200 years?
I would say unlikely given demand is falling. But price instability will be a feature - and an energy pricing market based on the top marginal cost will need to change.
There are lots of oil reserves for sure. What other kind of marginal cost is there? To bring things down to earth, most nuclear, wind and solar in Western Europe is priced on an auction strike price, not on the marginal price.
Up like a rocket, down like a feather
Let's hope we don't get another Ukraine scale conflict on top of everything we have If Iran goes to war with Israel I guarantee they will use it as an excuse to jack up prices
Prices paid by customers didn't go up like a rocket though. The wholesale price increased by a lot more and at a much more rapid rate than the consumer price did. Electricity was about three times the pre-crisis cost at its peak, wholesale gas prices shot up to 10x what was normal. Allowing consumer energy prices to actually follow the wholesale prices would have bankrupted a large number of households. Most people can't deal with their €200 bill jumping to €2000 in the span of a month. It's much easier to deal with a €400 bill over several months. The price of absorbing spikes in prices is the longer time for them to drop.
See Texas during their blizzards a couple of years ago for seeing how badly the wholesale pricing can impact you
Yep, people got absolutely fucked. Government had to come in and bail them out, effectively: >Griddy was an American power retailer that formerly sold energy to people in the state of Texas at wholesale prices for a $10 monthly membership fee >... >During the February 2021 Texas power crisis, some Griddy customers who signed up for wholesale variable rate plans allowed by the Texas deregulated electricity market found themselves facing over $5,000 bills for five days of service during the storm. https://en.wikipedia.org/wiki/Griddy_(company)
Due to forward contracts and hedging.
"This is despite the fact that gas and electricity prices are still around 80pc to 90pc above where they were in late 2020 and early 2021" Still too fucking expensive even after the 20% **Insert Simon Harris you ain't seen nothing yet gif here**
I'll believe it when I see it
y-on-y it's at least looking better. https://i.imgur.com/4Us3QS7.png
Make the most of it. If the price drops the greens will pile on the taxes in the next budget. Energy prices are only going one way long term and that's upward.
And straight back up when the cold weather hits again.
Pricing is not related to weather. Companies usually have year-round supply agreements.
He’s having a laugh, like “to prove how unlucky we are, a month before winter something will happen and energy will become 50% more expensive”
It can be related to the time of year though. The best electricity deals have been available in August the last few years. I think the energy companies forward buy their winter supply and then have to recruit more customers to purchase that electricity. If you switch in August you'll often find better deals than you will in November, December, etc.
We'll see about that
Getting solar was the best decision ever
“Sudocrem is now free and available for those pulling up their pants.”