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Energy Prices


Captain Howdy
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A good read on why prices are rocketing.

 

A network of depleted gas wells, salt caverns and permeable rocks dotted under Europe and the UK have long helped residents and businesses get through the winter.

 

Injected with natural gas during the summer months when demand is low, they mean there is normally plenty to go around when residents switch on the heating and lights to stave off the winter darkness and cold. 

 

This year, however, has not been normal. Natural gas has been in short supply over the summer due to a challenging mix of events ranging from tremors in the Netherlands forcing the winding down of a key gas field, to maintenance and project delays lowering production in the North Sea. 

 

The UK basin’s output was down 28pc between January and August, with the key Forties Pipeline System out for maintenance for three weeks in June. Russia, meanwhile, has been accused of withholding extra supplies to Europe to put pressure on Germany to start up a new export pipeline.

 

Supply constraints come as demand has surged as economies re-open from the pandemic, with economies in Asia beating competitors to buy shipments of natural gas, and a drought adding to demand in Brazil by stymieing hydro-electric power. 

 

It all adds up to far less gas being put into storage, which was particularly depleted coming out of the previous long winter. Stocks are low as the heating season looms. Storage sites in the UK and Europe are about 72pc full, with filling rates running at about 16pc below the five-year average.  

 

Stocks are typically run down to about 30pc over winter, so the current rates mean buffers are low. It has added to fears about a supply crunch that is helping to fuel a rally in the prices forcing UK businesses to curb output and putting energy suppliers out of business. 

 

On Monday, month-ahead gas prices in Britain and European prices soared to above €74/MWh, more than four times the three-year average of €16.9/MWh for a key European contract.

 

"If storage stocks [across Europe] were at normal levels right now, the gas prices wouldn't be at such record highs,” says James Huckstepp, manager for European gas analytics at S&P Global Platts. 

“We should in fact be filling to higher than the five-year average, because we continue to see domestic production in Europe fall, so Europe is increasingly reliant on imports."

 

In the UK, the picture is compounded by a lack of storage capacity. Centrica, the owner of British Gas, closed its Rough storage site off the Yorkshire coast in 2017 as repair costs and low margins made the project uneconomic. 

 

The UK has a small number of storage sites left, such as Aldbrough run by SSE and Equinor in Yorkshire, and Stublach run by Storengy in Cheshire. Overall they cover less than 2pc of annual demand, and contain far less than European counterparts.

 

Critics believe that leaves the UK dangerously reliant on imports - at a time when competition for supplies for Europe is huge.

 

Across the year, Britain imports almost half of its gas. About one-third comes from Norway, with the rest from pipes to Belgium and the Netherlands, and shipments from Russia, the US, Qatar and others. 

 

The proportion of imports can be higher during winter, however. Last winter UK domestic production accounted for 35pc of supply; 36pc came from Norway, 6pc from the Netherlands, 4pc from Belgium, 19pc from LNG shipments and 1pc from storage.

 

Platts Analytics forecasts UK domestic production will be the largest supply source this winter, assuming normal temperatures. Norway could be the biggest supplier if demand is higher.

Imports mean British prices trade at a premium to the continent, which is expected to be 3.5pc against the European benchmark this winter. 

 

If Rough were still open “it would somewhat dampen gas prices in the UK”, says Huckstepp. “They would be slightly cheaper as the UK would not need to trade at quite as big a premium to the continent as it would not need to import as much. But prices are still going to be four times as high [as normal] - maybe just a few percentage points lower [if Rough was open]."

 

Addressing the European picture overall, he adds: "We expect to get through winter without blackouts - without actually running storage stocks to zero or having to curtail residential users.

“But we need prices at a very high level to get a lot of demand substitution, particularly in the power sector."

 

https://www.telegraph.co.uk/business/2021/09/21/lack-reserves-leaves-britain-facing-winter-gas-crisis/

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14 hours ago, Harry's Lad said:

It might be an option for those who can afford solar panels and the batteries, but not everybody can and the criteria many people have to meet for a grant towards the cost excludes them.

Pensioners for example. Many might own their own homes which makes them asset rich, so they might not qualify even if they are cash poor.

People in low paid jobs, but conveniently just over a threshold, the list goes on.

 

Whatever happens, you can bet your arse that the whole thing will mostly be a profit making exercise and less to do with low/zero carbon emissions.

There will be hundreds of thousands of people with smart homes and electric cars etc, encouraging or even paying them to charge their car at 3am makes perfect sense. Not doing it because Vera down the road can't just makes no sense, the situation is already past critical and we don't have time to waste.

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30 minutes ago, stringvest said:

not for much longer

Keep swallowing the hype. Suppliers were told to stop installing old SMETS1 meters nearly a year ago. They're still installing them. The migration of existing SMETS1 meters into the SMETS2 programme will take some time and some people are still reporting the SMETS1 meters are still dumb.

 

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3 minutes ago, dockers_strike said:

Keep swallowing the hype. Suppliers were told to stop installing old SMETS1 meters nearly a year ago. They're still installing them. The migration of existing SMETS1 meters into the SMETS2 programme will take some time and some people are still reporting the SMETS1 meters are still dumb.

 

ok mate.

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37 minutes ago, dockers_strike said:

Keep swallowing the hype. Suppliers were told to stop installing old SMETS1 meters nearly a year ago. They're still installing them. The migration of existing SMETS1 meters into the SMETS2 programme will take some time and some people are still reporting the SMETS1 meters are still dumb.

 

Out of interest can I ask where you are getting this information from?  
 

I know a little bit about meters and Stringers knows a little bit about E&A. 

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Just now, Rico1304 said:

Out of interest can I ask where you are getting this information from?  
 

I know a little bit about meters and Stringers knows a little bit about E&A. 

Stringers has just come off another challenging call with BEIS on the precise nature of some of the opportunities presented by my suppliers ;)

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1 hour ago, No2 said:

There will be hundreds of thousands of people with smart homes and electric cars etc, encouraging or even paying them to charge their car at 3am makes perfect sense. Not doing it because Vera down the road can't just makes no sense, the situation is already past critical and we don't have time to waste.

I agree that a low/zero carbon future is absolutely essential, I've been advocating it for years, I just worry that some will be left behind due to financial reasons and that really shouldn't be allowed to happen. Nobody should be left behind, it's just too important. 

 

A full charge on a car can take 8 hours, so charging at 3am makes no sense at all. And what about people who live in flats for example, or housing estates where they can't park outside their own home, how can they charge their cars overnight? and don't say charge points on lamp posts as there will be too many cars.

 

The infrastructure just isn't there, there aren't even any charge points at the petrol stations where I live.

 

I appreciate it's still only early days, but nothing seems to be happening here, I don't know about London or anywhere else, but absolutely nothing here.

 

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18 minutes ago, Harry's Lad said:

I agree that a low/zero carbon future is absolutely essential, I've been advocating it for years, I just worry that some will be left behind due to financial reasons and that really shouldn't be allowed to happen. Nobody should be left behind, it's just too important. 

 

A full charge on a car can take 8 hours, so charging at 3am makes no sense at all. And what about people who live in flats for example, or housing estates where they can't park outside their own home, how can they charge their cars overnight? and don't say charge points on lamp posts as there will be too many cars.

 

The infrastructure just isn't there, there aren't even any charge points at the petrol stations where I live.

 

I appreciate it's still only early days, but nothing seems to be happening here, I don't know about London or anywhere else, but absolutely nothing here.

 

That's not my point, if you can do it for 5% of the population then do it for the 5%. Its not ideal but its a start and better than nothing. It will 20 years before those you speak of will be provided for.

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26 minutes ago, Harry's Lad said:

I agree that a low/zero carbon future is absolutely essential, I've been advocating it for years, I just worry that some will be left behind due to financial reasons and that really shouldn't be allowed to happen. Nobody should be left behind, it's just too important. 

 

A full charge on a car can take 8 hours, so charging at 3am makes no sense at all. And what about people who live in flats for example, or housing estates where they can't park outside their own home, how can they charge their cars overnight? and don't say charge points on lamp posts as there will be too many cars.

 

The infrastructure just isn't there, there aren't even any charge points at the petrol stations where I live.

 

I appreciate it's still only early days, but nothing seems to be happening here, I don't know about London or anywhere else, but absolutely nothing here.

 

People with drives, parking spaces will charge overnight and potentially even rent out their charging points to other people.  If you have one at home you’ll very very rarely charge anywhere else.  You’ll plug in and it’ll be automatic overnight on the cheapest tariff.  National car park chains, supermarkets, train stations etc are all looking to introduce tens of thousands of charging points.  Anywhere your car is still for 30 mins.  

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7 minutes ago, No2 said:

That's not my point, if you can do it for 5% of the population then do it for the 5%. Its not ideal but its a start and better than nothing. It will 20 years before those you speak of will be provided for.

Aye, and you won't have been able to buy a new petrol or diesel car for at least 10 of those.

Shambles.

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32 minutes ago, Rico1304 said:

Out of interest can I ask where you are getting this information from?  
 

I know a little bit about meters and Stringers knows a little bit about E&A. 

Pre retirement, I worked on numerous electricity supplier's and new market participants projects ranging from 1998 de regulation, non & half hour data aggregation, NETA, metering, billing systems including validation plus IT system for a gas fired power station at Seal Sands near Hartlepool.

 

I went to work with a meter manufacturing company in Stockport for SMETS1. They didnt have a fucking clue what they wanted or how SMETS operated etc, etc which was a bit of an eye opener for a company supposedly building the things.

 

The simple fact no one appears to have thought it a good idea to make sure consumers switching suppliers, which they've been encouraged to do for the last 20+ years, and that meters would still be 'smart' with the new supplier was not a basic System Requirement, is frankly outrageous. The fact the project went live knowing or unaware meters would go dumb, even more so.

 

SMETS is at the behest of the utility companies with the cost shoved onto the consumer bills. There's very little benefit with SMETS for the customer beyond not having to submit meter reads every month. You dont need a 'smart meter' to tell your kids to turn off the bathroom light they repeatedly leave on.

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19 minutes ago, dockers_strike said:

Pre retirement, I worked on numerous electricity supplier's and new market participants projects ranging from 1998 de regulation, non & half hour data aggregation, NETA, metering, billing systems including validation plus IT system for a gas fired power station at Seal Sands near Hartlepool.

 

I went to work with a meter manufacturing company in Stockport for SMETS1. They didnt have a fucking clue what they wanted or how SMETS operated etc, etc which was a bit of an eye opener for a company supposedly building the things.

 

The simple fact no one appears to have thought it a good idea to make sure consumers switching suppliers, which they've been encouraged to do for the last 20+ years, and that meters would still be 'smart' with the new supplier was not a basic System Requirement, is frankly outrageous. The fact the project went live knowing or unaware meters would go dumb, even more so.

 

SMETS is at the behest of the utility companies with the cost shoved onto the consumer bills. There's very little benefit with SMETS for the customer beyond not having to submit meter reads every month. You dont need a 'smart meter' to tell your kids to turn off the bathroom light they repeatedly leave on.

Currently there are well over 5 million SMETS1 meters on DCC's ecosystem.  These meters - despite the unique technical challenges that each meter type presents - are interoperable; in other words they will retain smart functionality after a change of supplier.  Full switching capability, i.e. the ability to switch within one hour rather than 20-odd days, will go live over the course of three releases in 2022. 

 

SMETS is absolutely not at the behest of the utility companies.

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7 minutes ago, stringvest said:

Currently there are well over 5 million SMETS1 meters on DCC's ecosystem.  These meters - despite the unique technical challenges that each meter type presents - are interoperable; in other words they will retain smart functionality after a change of supplier.  Full switching capability, i.e. the ability to switch within one hour rather than 20-odd days, will go live over the course of three releases in 2022. 

Just out of interest, is it possible to get a replacement display, the ones you plug in so you can keep an eye on your usage?

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1 hour ago, dockers_strike said:

Pre retirement, I worked on numerous electricity supplier's and new market participants projects ranging from 1998 de regulation, non & half hour data aggregation, NETA, metering, billing systems including validation plus IT system for a gas fired power station at Seal Sands near Hartlepool.

 

I went to work with a meter manufacturing company in Stockport for SMETS1. They didnt have a fucking clue what they wanted or how SMETS operated etc, etc which was a bit of an eye opener for a company supposedly building the things.

 

The simple fact no one appears to have thought it a good idea to make sure consumers switching suppliers, which they've been encouraged to do for the last 20+ years, and that meters would still be 'smart' with the new supplier was not a basic System Requirement, is frankly outrageous. The fact the project went live knowing or unaware meters would go dumb, even more so.

 

SMETS is at the behest of the utility companies with the cost shoved onto the consumer bills. There's very little benefit with SMETS for the customer beyond not having to submit meter reads every month. You dont need a 'smart meter' to tell your kids to turn off the bathroom light they repeatedly leave on.

L+G then?  I was working with them at that time.  
 

Your description of that time doesn’t match mine.  

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