Posted by: @transparent

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The causal link is that Ofgem developed the TM04+ process, not that they are responsible for the number of data centres.

I will not comment on what you mentioned but it makes sense.

A few other factors that are bound to have a strong effect are:

- general increase of capacity needed in the international market, the main factor being Ai growth plans

- many users of data centre space need it to be powered by renewables. GB has a lot coming online in the next few years, earlier than some other European countries 

- our government is making commitments to treat many as cni, so reducing the time it will take to get approval to build

- power use is also increasing significantly with new AI chips

Posted by: @batpred

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Posted by: @majordennisbloodnok

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Posted by: @batpred

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A single case is needed to disprove broad statements. Thank you

Agreed, but you unilaterally broadened it in the first place. As for @technogeek’s statement, I’ve only confirmed it.

I deepened it. But not very helpful, as no doubt @technogeek did not mean it literally.

… 

No, you broadened it. You used something he didn’t say to bolster an incorrect claim you were making.

@editor oh..

The Elephant in the room..

Although Gas prices are spiking, has it not occurred to anyone yet that our underground storage is currently at 16% and LNG is 58% and in less than two weeks cold weather is due to return.

Yes, prices will be a headache over Summer but I'd be more concerned of Rolling Blackouts once the boats stop arriving on time.

What's your Rota Disconnect?

Ours is Delta.

Might be needing that still boxed Generator and 6x LPG bottles on stand-by since 2022 after all.

🤣 🤣

Government and Energy Security.. seriously!!

@editor we are in the window for OFGEM price cap calculation for July-September, so if Trump's estimate of action is 4-5 weeks then that will almost certainly have an impact.  If military escorts allow shipping through Hormuz again it might not be so bad, but I'm seeing reports the US navy doesn't really want to start engaging it's expensive warships against swarms of cheap Iranian drones and kamikaze boats; PR disaster at home for Trump if that goes badly.

I'm on Octopus Tracker, retail electric is up 16% since yesterday and gas is up 25%.

Gas storage is at 30% so if we do get a cold spell in spring, which does sometimes happen, things will get interesting sooner than July.

UK gas prices jumped again this morning when trading opened at 07.30 - 133p/therm a 3 year high.

Thanks for the insights and thoughts… the real kicker for me isn’t just the spike itself, it’s how electricity prices remain chained to gas wholesale costs in the UK, even as renewables grow.

We’re essentially paying a gas tax on our power bills every time therm prices lurch upward, no matter how much solar or wind is actually generating. It’s crazy IMO. This week’s volatility shows how fragile that linkage makes us… low storage and weather risks amplifying it, turning what could be a short blip into a sustained drag on any cap relief that manifests itself down the line.

And speaking of which, Sky News has just reported: “Gas price soars - hitting a three-year high. There’s been another massive rise in the price of gas. It’s now up 32%, hitting a high not seen in more than three years. It briefly hit 151 pence a therm, a level not seen since February 2023. That’s on top of the 50% rise seen yesterday, meaning a 93% rise this week alone. There was an easing back to 148 pence a therm… If this price remains, there could be an impact on household bills.”

Posted by: @editor

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Thanks for the insights and thoughts… the real kicker for me isn’t just the spike itself, it’s how electricity prices remain chained to gas wholesale costs in the UK, even as renewables grow.

I don't actually know why that's still the case in the UK.  Historically I seem to remember it was EU-wide but the EU were looking at changing it (I don't know if they did yet).  Im guessing that there may be contracts with generators that are written this way, which might provide a 'drag', and of course the marginal cost of generating electricity once we are using all our renewables is tied to the price of gas.  Perhaps someone here knows why the tie still exists.

Only a couple of months ago people were saying that there was going to be a glut of gas in spring.  How quickly things change! Maybe this incident will boost the argument for renewables.  Being dependent still on gas and oil shipped from despot states through vulnerable shipping routes is, to my mind, a serious threat to national security.

Posted by: @majordennisbloodnok

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That’s an incredibly hard question to answer whilst still avoiding the political tangents the rules discourage. However, my opinion is that the actions in Iran, no matter anyone’s feelings about rights or wrongs, have not been thought through first, and that will make it difficult to conclude tidily or quickly. I cannot see any way this conflict can avoid dragging on and so fully expect higher oil prices to continue for long enough to translate into higher energy prices for consumers. Even worse, I fully expect much more bloodshed.

My thoughts exactly.  There appears to be a plan for attack, but no plan at all for the peace that must eventually follow if the attack is to achieve its goals.  It feels very much like a case of 'ready, fire, aim'.

Posted by: @majordennisbloodnok

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Posted by: @batpred

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I deepened it. But not very helpful, as no doubt @technogeek did not mean it literally.

… 

No, you broadened it. You used something he didn’t say to bolster an incorrect claim you were making.

You seem to see your role as defining what is right and what is not? 

I never saw anyone running software at the same level of efficiency (and meeting all other non functional requirements) as is possible in public cloud providers like aws, google, azure, but using corporate infrastructure alone. 

It seems the debate here is about electricity prices, a specific point being whether increases in consumption due to growth of data centre numbers, sizes or shape can contribute to an increase of those prices. 

@scalextrix absolutely.

That cold spell starts around the 13th..

We're currently living hand to mouth on LNG arriving on time.

Is this the first year of Rolling Blackouts?

When you say 30% storage.. 16% in underground and 58% of that is LNG.

What possessed government's to shut the 260 storage to 12 good days - needs prosecution for recklessly endangering us.

@diverted-energy well let's hope not, the only glimmer of hope in the Iran situation is Iran is an ally of China, and China heavily relies on oil from the Gulf.

So maybe Iran won't actively block the Straight, maybe safe passage can be negotiated, depends on who takes charge in Iran maybe.  The issue right now is Lloyds of London / Baltic Exchange setting massive per trip insurance premiums on any tanker daring enough to transit (basically no shipping firm will risk it), that's convenient for Iran to say "it's not our fault" to China.

Posted by: @jamespa

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I don't actually know why that's still the case in the UK.  Historically I seem to remember it was EU-wide but the EU were looking at changing it (I don't know if they did yet).  Im guessing that there may be contracts with generators that are written this way, which might provide a 'drag', and of course the marginal cost of generating electricity once we are using all our renewables is tied to the price of gas.  Perhaps someone here knows why the tie still exists.

My simple understanding is every 30 or 15 mins, generators bid for production with whatever price they require. The cheapest that are required to meet the expected demand get to produce. But they all get paid at the price of the highest price that had to be accepted. That last one is often gas. I just keep the graph below in mind. Gas is still a large component of generation in the UK - so most of those 30 or 15 minute auctions would have a price defined by a gas based generator.   

Happy to be corrected..

Posted by: @jamespa

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Only a couple of months ago people were saying that there was going to be a glut of gas in spring.  How quickly things change! Maybe this incident will boost the argument for renewables.  Being dependent still on gas and oil shipped from despot states through vulnerable shipping routes is, to my mind, a serious threat to national security.

Agreed and the natural strategic choice for non fossil fuel producing countries would normally be to develop alternatives. And over the last decade that has been pursued across most of Europe, with some benefits already showing 😁

Firstly, I would like to thank you for helping me understand how so many of the policy choices and their implementation are having an impact. 

I missed this earlier post. 

Posted by: @transparent

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It takes much less time to build 140 Data Centres than it does to build and install 140 Floating Offshore Wind Turbines (FLOW) in the North Sea for example.

That may well be the case, and as we now have a changed gov policy with a central planning inspectorate, deducting future from past is near impossible.

Anecdotal evidence from the last public consultation about a data centre development that I attended was that there is no point to build very quickly, not just because it would alarm locals, but because 5 years is the timeline the project was given for a suitable grid connection. Local people were given a wide range of answers about the peak demand power. Whatever the reasons, my hypothesis is that power availability is still a significant constraint. 

I am sure others will be able to comment much better on what is involved in getting an offshore windfarm from concept to operational. 

Posted by: @transparent

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What would I do?

1: Set a new (political) policy that the priority for GB electricity supplies is to be the existing customer base.

2: Set a cap on the amount by which Ofgem can allow bills to rise for network infrastructure upgrades. The guidance is to include an ethical constraint clause.

3: Set a levy to be paid by Demand Applicants depending on the geographical location of their Project; define this by:

• the Transmission Boundaries across which their electricity will be required to pass
• the generation-surplus forecast for the area in which their data-centre will be built

4: reverse the decision to exclude regional nodal tariffs. Set up a technical workgroup of grid engineers and network-planners to devise a mechanism which minimises the need for upgrades on the Distribution Grid.

5: Add a section into the RIIO-ED3 Agreements between Ofgem and DNOs which requires them to work in partnership with consumers to reduce by half the losses due to phase-imbalance at local substations. That will save us at least 2GW of capacity, and give us some algorithms to create a genuine Smart grid for the future.

 

This was written in haste.

I reserve the right to adjust my thinking by tomorrow morning. 😉 

My comments on a postcard

1. the existing customer base being the priority still means that (to deliver the plan), growth is required, so those future customers need looking after as well. Gov has a responsibility to help the country take advantage of growth opportunities. Those datacenters could go elsewhere with all the growth they represent and enable. 

2. yes, it needs to be fair, whatever that means

3. agree this is needed to reduce the apparent incentive to locate high consumption near production. I say apparent, as if demand queues build up in non attractive locations, this may end up with similar result. Meaning if datacentres are built elsewhere quicker, it dries up the demand for the ones that do not get build?

4. seems very sensible to reverse the decision, if this means the fixed distribution costs stabilise, with major consumers placing demand closer to production centres. This also needs to have a story to explain to most people that have the right to not need to understand the ins and outs of all these decisions. 

5. while I appreciate the concern, how much impact will this have on domestic bills? Do you know how often are distribution costs highlighted in a post above recalculated and how? Would this put downward pressure on those distribution cost factors?

I am sure a bit more data will change my mind..