Can the UK Increase Green Energy with 'Zonal Energy Pricing'? (theguardian.com) 10
To avoid overloading local electric grids, Britain's most productive windfarm "is paid to turn off," reports the Guardian — and across the industry these so-called "constraint payments" amount to billions every year.
"Government officials are hoping to correct the clear inefficiencies in the market by overhauling the market itself." Greg Jackson, the founder of Octopus Energy, told the Guardian: "It's grotesque that energy costs are rising again this winter, whilst we literally pay windfarms these extortionate prices not to generate. Locational pricing would instead mean that local people got cheap power when it's windy. Scotland would have the cheapest power in Europe, instead of among the most expensive, and every region would be cheaper than today. Companies would invest in infrastructure where we need it — not where they get the highest subsidies."
The changes could catalyse an economic osmosis of high energy users — such as datacentres and factories — into areas of the country with low energy prices, creating new job opportunities beyond the south-east. It could also spur the development of new energy projects — particularly rooftop solar — across buildings in urban areas where energy demand is high. This rebalancing of the energy market could save the UK nearly £49bn in accumulated network costs by 2040, according to a study commissioned by the energy regulator from FTI Consulting.
But others fear the changes could come at a deeper cost to Britain's climate goals — and bill payers too. The clean energy companies preparing to spend billions on building new wind and solar farms are concerned that a redrawing of the market boundaries could radically change the economics of new renewable energy projects — which would ultimately raise the costs, which would be passed on to consumers, or see the projects scrapped altogether... With stiff competition in the international markets for investment in clean energy, Renewable UK [the industry's trade group] fears that companies and their investors will simply choose to build new clean energy projects elsewhere.
"The debate has driven deep rifts across the industry," the article concludes, "between modernisers who believe the new price signals would give rise to a new, rational market and those who fear the changes risk unravelling Britain's low-carbon agenda...
"The government is expected to make a decision on how to proceed in the coming months, but the fierce debate between warring factions of the energy industry is likely to continue for far longer."
Thanks to long-time Slashdot reader AmiMoJo for sharing the news.
"Government officials are hoping to correct the clear inefficiencies in the market by overhauling the market itself." Greg Jackson, the founder of Octopus Energy, told the Guardian: "It's grotesque that energy costs are rising again this winter, whilst we literally pay windfarms these extortionate prices not to generate. Locational pricing would instead mean that local people got cheap power when it's windy. Scotland would have the cheapest power in Europe, instead of among the most expensive, and every region would be cheaper than today. Companies would invest in infrastructure where we need it — not where they get the highest subsidies."
The changes could catalyse an economic osmosis of high energy users — such as datacentres and factories — into areas of the country with low energy prices, creating new job opportunities beyond the south-east. It could also spur the development of new energy projects — particularly rooftop solar — across buildings in urban areas where energy demand is high. This rebalancing of the energy market could save the UK nearly £49bn in accumulated network costs by 2040, according to a study commissioned by the energy regulator from FTI Consulting.
But others fear the changes could come at a deeper cost to Britain's climate goals — and bill payers too. The clean energy companies preparing to spend billions on building new wind and solar farms are concerned that a redrawing of the market boundaries could radically change the economics of new renewable energy projects — which would ultimately raise the costs, which would be passed on to consumers, or see the projects scrapped altogether... With stiff competition in the international markets for investment in clean energy, Renewable UK [the industry's trade group] fears that companies and their investors will simply choose to build new clean energy projects elsewhere.
"The debate has driven deep rifts across the industry," the article concludes, "between modernisers who believe the new price signals would give rise to a new, rational market and those who fear the changes risk unravelling Britain's low-carbon agenda...
"The government is expected to make a decision on how to proceed in the coming months, but the fierce debate between warring factions of the energy industry is likely to continue for far longer."
Thanks to long-time Slashdot reader AmiMoJo for sharing the news.
Re: (Score:2)
Pretty much the only possible explanation. Doing this for residential consumption is going to screw a whole lot of people for no good reason.
Doing this for feedin, industrial and spot market makes sense. Though the industrial users should probably get a decade or so to adjust.
Or they could build transmission (Score:2)
I understand undersea cables could even be used.
Re: (Score:2)
They already have distribution lines to France through the Channel Tunnel. https://www.siemens-energy.com... [siemens-energy.com]
Maybe that's not big enough or maybe there isn't enough distribution between Scotland the Chunnel.
Could be a step in the right direction. (Score:4, Interesting)
Re: (Score:2)
The old cost structure is obsolete. Baseline power at night was cheap because they had to keep the power plants running. Handling power peaks during the day required expensive peaking generators.
Now daytime summer solstice power is exceedingly cheap, overnight power from batteries is somewhat more expensive, but nighttime winter solstice power will cost an arm and a leg because the power companies have to make up for all those days the plant was just sitting there the rest of the year.
https://transmission.b [bpa.gov]
Re: (Score:2)
As it is now a unit of electricity costs the same regardless of how it's produced, so there's no incentive [...]
You seem to misunderstand both how market intermediaries and electricity grids work. Electricity is fungible; by the time the power comes in from the mains, a consumer cannot distinguish how a kilowatt-hour of electricity was produced. If the infrastructure provider keeps records well enough, they could try to have consumers pick the sources of electricity they use, but that makes it really hard to handle an oversubscribed source -- it's not very practical to turn power off or down for a single consumer o