Why is electricity so expensive?

Like everyone else I guess have had unwelcome news from my energy supplier - £0.32 per kWh for electricity. Gas has gone up from about £0.04 to ~£0.07 per kWh too. It made me think - given that most UK electricity is still generated by domestic gas fired power stations, which presumably operate at better than 25% efficiency, why are the electrons so pricey?

Robin.

Edited By Robin Graham on 05/04/2022 01:22:17

Privatisation was always going to make things more expensive

Plus there's secret hidden costs not itemised in your bill, to hand out as green grants to private companies

It's like paying someone to build you a house

and then you rent it from them

winner winner chicken dinner!

as long as you're not one of the poor people

My favourite was when EDF put up UK prices by 10% while the French Govenment told them to hold French price rises at 2.5%

Edited By Ady1 on 05/04/2022 02:09:55

Perhaps I should get a methane fuel cell and make my own electricity with those prices!**LINK**

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As Ady indicates; a lot of it is ‘manipulation’

Start here: **LINK**

https://youtu.be/DVBGk0R15gA

and then consider the ludicrous feed-in tariffs that were made available to encourage the installation of domestic solar panels

Price is a very effective way of manipulating behaviour.

MichaelG.

Edited By Michael Gilligan on 05/04/2022 07:58:10

Things will get even worse now that National Grid have sold off all our gas grid to an Australian mining co.

Standing charge got doubled. An easy way for them to screw more money out of their customers.

A common mantra is "You get what you pay for". So I'm pleased with the price increase, indicating much better quality electrons than the ones sold before. I'm still worried about French electrons. A background of soft cheeses and high fat odd-shaped bread rolls isn't a good look for the hard electricity I want with a long use-by date. It was bad enough in the 50's when we were promised nuclear would be so cheap they wouldn't charge for it - so poor quality they took those off the market.

pgk

The Americans have a phase 'price gouging', I believe it's illegal over there? My opinion is that we as consumers are being 'price gouged' on a daily basis, as we are dependent on imports for most of our energy & food there is bugger all we can do about it, perhaps we should all eat grass & live in caves as the vocal majority seem to think that is the way forward.

Tony

Just Nationalise it all, like with the water

Private companies can only gouge you if a government deconstructs a utility sector into a messy pile of bits

Offshore wind definitely needs to be nationalised

My nationalised water bill for the year is 270

sewerage 314

Which water supplier is nationalised apart from Scotland? The largest shareholders are Canadian Pension Funds!

Edited By KWIL on 05/04/2022 10:25:13

I didn't think water was nationalised but I have my own borehole and reed-bed sewage so the only bills are for electricity for its pumps and (so far) one replacement pump and a couple of pressure vessels.
Nationalisation of old lead to a top-heavy idle workforce, poor public investment and a union stranglehold, although i do agree that basic utilities should belong to us rather than be sold abroad for a fast money-raising exercise to waste on the next vanity project.

pgk

I take it from Ady’s comments that Scottish water is nationalised like their railways are now, seems the way to go. Dave W

They kept Scotlands water nationalised, politics schmolitics because of the SNP

edit: The railways are a mess, they've always been a mess up here, Scottish rail seems to be a sinkhole for bolshevik employees and incompetent managers

Edited By Ady1 on 05/04/2022 10:32:20

The village I live in used to rely on wells for their water until fairly recently, it seems that the water table is not far from the ground level so easy to access, I have been thinking about a hand drilled borehole in my garden to access the water for watering the garden through the summer, it gets very dry here in the South East, and also the water would be good to supply my two large Koi ponds. The more the bills go up the more attractive the option becomes. Dave W

Ady, the railways are no better down here in England. Dave W

At least your guys are busy, our "busy" is a Glasgow train arriving every 30 minutes

I recall reading that around 5500 trains hit the Southeast zone every weekday morning

That's 10 to 20 trains a minute

Edited By Ady1 on 05/04/2022 10:39:49

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As per the link that I provided earlier

But of course, the cheap electricity was a by-product

MichaelG.

The Windscale cleanup was 100 billion and counting the last time they even bothered putting it into the news

That was 2, 3 4 years ago?

The price consumers pay for gas is complicated by all sorts of issues, but the root cause of this one is supply and demand. When more people want to buy gas than is available, the price rises until someone drops out. If more gas is available than people want to buy, then the price drops.

For over 30 years the UK Wholesale Gas market remained stable, but that happy state of affairs ended last year with sharp rises in price.

First effect was to bankrupt about 30 of the cheap-deal gas retailers, who were prevented from passing on wholesale prices increases to their customers by customer contracts and a government imposed price cap. The cap was designed to stop gas retailers making excessive profits on the assumption gas would stay cheap. Wrong! So the retailers went bust, and their customers were transferred to British Gas, who provide continuity of supply. If you land in the British Gas safety net, they charge the current going rate, not whatever the previous bankrupt supplier agreed to.

Second effect, this month the government lifted the price cap to reflect the actual cost of wholesale gas. Everybody who was protected by the old cap, now has to pay the current rate.

Ironically, whilst Gas Retailers are going bust right, left and centre, Gas Wholesalers make big money from price rises caused by shortages.

Where does UK gas come from? Over half is imported, so anyone who expects the North Sea and Morecombe Bay to keep domestic gas prices low is in for a disappointment.

The UK competes with the rest of the world to buy gas from producer countries. This year's price bump was partly caused by the economic bounce back after the major disruption caused by COVID. However, whilst worldwide demand for gas continues to increase, it's unlikely prices will fall again. Putin's foolish invasion of Ukraine won't help: presumably he gambles Europe's long-term dependency on Russian Gas will cause everything to be forgiven. (Russia is a major gas producer.) Actually, as appeasing Putin has been followed by escalating bad-behaviour in Chechnya & Co, Syria, Crimea and now Ukraine, I think the West will respond by dramatically cutting trade with Russia and doubling or tripling Defence expenditure. The peace dividend is over: critics would suggest the government and West generally have been very tardy in recognising this.

Rising gas prices are one of two reasons it's vital to move the UK away from burning fossil fuels as a source of energy. North Sea Gas, especially in the Scottish sector, has been in slow decline for 20 years and God isn't making any more! The UK's position in twenty years will be grim unless action is taken now.

As the UK is a rich country, we will be able to buy gas long after poorer countries have been forced out. Already been serious riots in Turkey and elsewhere people have been unable to buy gas at all. Not good for the UK, because violence abroad creates refugees, disrupts trade, and other instability.

Dave

The international situation, and chasing dwindling resources, is probably the biggest factor; but many of the price-rises are naked exploitation. Why, for example, has the retail difference in cost of diesel and petrol suddenly leapt up so much? (Not helped by a concerted campaign by the professional ignorami to paint modern compression-ignition engines vehicles as far more polluting than their petrol equivalents: the truth is the opposite.)

I used to think State-owned bad, private good. Not now. There is far less control over it, resulting in very patchy services and purely chimerical "competition", and even if the sales income and staff wages are taxed the profits and dividends raised by far too many do not help the country. Well, not this country. Some examples:

National Grid & Railtrack: still GB-owned I think, but -

EDF - owned by the French nation.

Cross-Country Trains, some other passenger "franchises", most rail goods services and licensing the steam charters - DB Schenker - owned by the German nation.

Wessex Water - owned by a Malaysian quarries, cement-making and hotels developer of dubious environmental credentials in its own country.

Most top British football so-called "clubs" - are there any, other than by location?

And the idea that the employees of the past State-owned companies, services, etc., etc, were all lazy, shiftless incompetents wasting tax-payer's money before retiring on super pensions, is an outrageous slur invented by political and/or ignorant types for mere partisan propaganda. The problems such institutions had were mainly the making of politicians of all flavours; and private industry had more than its own share of major difficulties of it own making, in the past.

The stark fact is that the world hosts and ever-growing population naturally wanting more and more (with very many naturally wanting and needing even the basics we take for granted here); from less and less resources.