> That looks like rationing.

You've drawn the wrong premise from the data you've looked at. There is no rationing.

UK electricity prices operate in a broken market where the price is fixed to the most expensive on-stream generator in that moment, so in the auction of wholesale prices that happens dozens of times a day, if a single gas generator is online, everyone is setting the price around gas generation even if most of the supply is much cheaper wind.

Last week the PM announced that this broken market should get fixed in the next parliamentary session, because he - and his party - know that reducing energy prices has material impact on how people feel about the economy.

You should also understand that demand has changed shape considerably in the last 50 years.

There's been a pretty devastating deindustrialisation in the UK since the 1970s - there's only one steel forge left operating, and that required nationalisation this year, for example. As the UK moved to a knowledge economy, we found that most of the workforce moved to needing nothing more than a laptop to add to GDP.

But the home has also changed shape: you can't buy an old fashioned light bulb any more, so dreary wet winters are illuminated exclusively by LED lighting at ~10% the power consumption used in the 1970s. Heatpumps have replaced storage heaters, and while electric cars are popular even they do not use as much energy as the factories and ship yards used to.

There is literally just less demand. And the pricing is pegged to gas, unfairly. If that market breaks, I doubt consumption would go up, but maybe new industrial opportunities would open up - if we end up with cheap, abundant energy as a result, we might attract more energy-intensive industry to the UK, but I don't think it's fair to define current state as "rationing"

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gadders 13 hours ago | parent | next [-]

>>There's been a pretty devastating deindustrialisation in the UK since the 1970s - there's only one steel forge left operating, and that required nationalisation this year

Nationalised because high energy prices made it unsustainable commercially.

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d_theorist 12 hours ago | parent | prev | next [-]

As the price of a good goes up, demand goes down! Hardly a surprise. It doesn't mean the economy wouldn't use a lot more energy if it was affordable.

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louthy 12 hours ago | parent | prev | next [-]

All of this, plus it seems like every other roof is plastered with solar panels.

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lolburgerh261 13 hours ago | parent | prev [-]

Someone doesn't understand marginal pricing

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tialaramex 12 hours ago | parent [-]

Well, there's a difference between "This is just marginal pricing" and "This very specific market with marginal pricing is the only one possible"

I would like to think that National Government is considering choices which would still be marginal pricing but change other elements to better suit our present reality. Two examples:

1. Regionalize. Today the price for 1MWh of electricity in Portsmouth is exactly the same as for 1MWh of electricity in Dundee but if the UK is making so much electricity in the far North on a windy January night that's not the real price to deliver the electricity, getting it to Dundee would be far cheaper. Prices can reflect that, and if they do that new energy-hungry factory makes more sense in Dundee than in Portsmouth even if it would be slightly more convenient to build it in Portsmouth.

2. Retail pricing can have a significant social policy element distinct from "What the market says this costs". Technically an old lady living alone who uses 50kWh per month and a wealthy family with two EVs and a swimming pool chewing almost 10MWh per month are both "connected to the grid" but maybe the 40p per day "standing charge" to cover that connectivity could be 10p per day for that old lady and 80p for the wealthy family. Again, the market says that's wrong because the connection doesn't cost more money if you use it - but it's a social policy decision.

Edited to Add:

By the way I assume regional pricing is a reason sometimes the UK is both buying Electricity from France and selling Electricity to France, over different links. Presumably the prices are different and so we are effectively arbitraging their electricity.

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lolburgerh261 7 hours ago | parent [-]

Yep, line congestion is a pretty big problem - lots of wind generated in Scotland - industry down south have large demand so we end up curtailing wind and spinning up "peakers" to support regional demand. This is a bigger problem in Germany.

Regional pricing is something being looked into - comes with it's own problems - but more solve-able with modern data processing pipelines.

IMO stick a battery in every house, and you have a nation-wide buffer for smoothing out renewables is a good idea. Large battery bank projects are being rolled out which can help with this too.

In terms of social pricing - that would still need to be anchored to "something" - which currently is the price derived from the merit order.

There are also a lot of projects around improving transmission infrastructure. It's a very interesting time.

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tialaramex 6 hours ago | parent [-]

The UK doesn't have basically any "peakers" (Open Cycle Gas Turbines) and I'm surprised to hear they're a thing in Germany,

Combined Cycle costs more to build but is far more efficient. So OCGT is basically a bet that fuel is cheap forever, or at least for so long you've made your money. I know that bet doesn't work in the UK and I would not expect it to pay off in Germany either.

	▲	lolburgerh261 6 hours ago \| parent [-]
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