@derek-m

Looking at the government report "Electricity Generation Costs 2020" page 25, the costs for a modern CCGT station in 2025 is estimated to be around £85/MWh; gas cost is assumed to be £40/MWh, so fixed costs (including carbon tax) are around £45/MWh. Yes some of these costs will have risen since the 2018 prices this report was generated in, but there is a big difference between fixed costs + gas and the price of electricity on the open market.

Frankly it all rather reminds me of the 2000s California Energy Crisis.

@chickenbig

I am not defending the owners of CCGT's, since I feel certain they will be trying to maximise profits, but the main beneficiaries are the Oil and Gas producers, the likes of Aramco, Gazprom, Shell, BP and all the other producers around the World.

It is the old, old story of supply and demand, so as consumers we should all be doing as much as possible to reduce demand, which in turn may hopefully start to reduce prices.

Posted by: @derek-m

Quite a few years ago when I was working at a CCGT, the annual connection fee charged by National Grid was £6 million.

Ofgem has done a couple of years of consultation and published a Decision which changes the way in which connection charges are calculated.

The main differences affect new connections, which are mostly for renewable generation and storage below 49MW. But the new rules apply above this threshold too.

A new connection charge consists of

• the physical hardware & labour to install it
• a contribution towards the wider network upgrades which are required

All of the network enhancement costs will now be borne by the DNO (or National Grid above 132kV), with no contribution from the applicant. The DNOs then recover those costs by raising our Standing Charges.

Applicants may also now defer their physical connection charge or opt to pay in installments.

Strangely, I can find no obligation on the part of the Applicant to actually deliver their generation or storage. I'm querying this through the 'correct channels'.

@transparent

I may not have explained myself clearly. This was a fee paid annually by Power Stations to National Grid, to allow the Power Station to export power via National Grid's system. I can't remember the exact title of the requirement, but without it the Power Station could not generate.

It was not to install new connections, but to maintain existing ones.

Predictions for October CAP Rate announcement:

Im going with 87%

@diverted-energy, bold. 😀

I think it’s going to be significant.

Posted by: @derek-m

This was a fee paid annually by Power Stations to National Grid, to allow the Power Station to export power via National Grid's system.

Thanks @derek-m

Yes, I did understand the reference you made to the annual fee for a connection to the National Grid. May I expand on the concern which I'm expressing here...

Ofgem seems to be moving more of the electricity costs onto the end-consumers in order to meet Government targets, and particularly those related to Nett Zero by 2050.

Their Access and Forward-Looking Charges Significant Code Review (‘Access SCR’) commenced in December 2018. The original SCR scope included a review of forward-looking distribution use of system (DUoS) charges and transmission network use of system charges (TNUoS). It's the TNUoS which you refer to as the annual charge for a large generation plant retaining its connection to the Transmission Network (400kV and above).

Ofgem published it's proposals for consultation. The UoS proposals were predominately:

• remove the annual charge from the electricity generators
• more closely align with EU Regulation 838/2010, which had now been subsumed into UK law post-Brexit

There was a legal challenge from SSE to the Use of Service elements of the Access SCR.

The Competition & Markets Authority (CMA) upheld Ofgem's decision to approve CUSC Modification Proposals (“CMPs”) 317/327 and 339... the relevant parts of UK legislation.

SSE disagreed and launched a Judicial Review. The Court found partially in favour of SSE, in that the CMA shouldn't have allowed Ofgem a modification proposal which didn't fully comply with CMPs 317/327 and 339.

Ofgem therefore separately published the Access SCR for new connections in May'22. It is that publication which I referred to earlier. That portion of the SCR clearly demonstrates Ofgem's strategy to move a high proportion of the charges onto the end-users via the daily Standing Charge.

Ofgem have not yet published fresh proposals for the Use of Service part of the SCR. They might do so, although they could yet decide to take the matter to the Appeal Court.

My overall point is that Ofgem is increasing the charges paid by us consumers rather than the major generation companies. As this increase is levied through the fixed/daily part of the charges, it falls disproportionately on poorer households with lower use of electricity.

That move shows a bias in favour of large companies within the energy industry, the majority of which are owned by overseas shareholders. One wouldn't expect such proposals from an unelected organisation whose role is to ensure fairness.

Last week I met with a member of the Local Government Association who commented "Is the Energy Regulator acting as a regulator any more?"

If readers here wish to raise this aspect of the increased charges with their MP, you will need these references:

Ofgem's Directive on New Connection Charges is here

Ofgem's statement on the Use of Service aspect of the SCR following SSE's successful Judicial Review can be downloaded here.

@transparent

I raised the point about the standing charges being unfair to low energy users quite a number of weeks ago and wrote to my MP. If my memory serves me well, he directed me to ofgem, who of course sent some lame excuse.

It was also quite interesting that the standing charge in the London area is much lower than everywhere else in the country.

@transparent anyone want to club in and but some grid level storage? Seems like a good time to me.

Posted by: @derek-m

I raised the point about the standing charges being unfair to low energy users quite a number of weeks ago and wrote to my MP

So in light of what I've just written, perhaps you could approach your MP again, but this time make your complaint about Ofgem failing to act fairly in the interests of consumers. That, of course, cannot be forwarded for a response from Ofgem, because it's they who are the subject of the complaint!

[Aside: us end-users don't have right of access to Ofgem. They are the industry regulators. The correct route is either directly through the local MP, else via BEIS, which is a Government Dept.]

Posted by: @derek-m

interesting that the standing charge in the London area is much lower than everywhere else in the country.

Indeed, and I live in the DNO Region with the highest Standing Charge, which was also subject to the greatest level of increase in April (101%). In comparison the London rise was 36%.

There are three main categories of costs within the electricity Standing Charge:

1. Environmental/social obligations; includes FiT to earlier adopters of green microgeneration, home insulation grants etc
2. Supplier of Last Resort fund; used to pay Suppliers who take on customers of failed companies, and to keep Bulb afloat
3. Network maintenance and future system-upgrades by National Grid and your DNO

Since we assume that the first two categories are applied evenly across all consumers, the variations must be down to amount of work required on the physical grid.

I therefore conclude that customers in SW England are being charged for the privilege of upgrading the network to send their own renewable-energy to London.

MPs may not wish to get embroiled in this, particularly during the recess. However, they are facing a growing torrent of correspondence which will hit them from tomorrow onwards (26aug) when Ofgem announce the new energy cap.

I anticipate a level of civil unrest similar to that for introduction of the 'poll tax' in 1990.

I still don't believe that civil servants (& Ofgem) are adequately briefing their Ministers: that's Kwarsi Kwarteng MP (BEIS) and his colleague Greg Hands MP (Energy/climate). They can't possibly make the best decisions without having accurate information provided to them.

Readers here on this Forum should take the opportunity to provide facts, solutions and direction to their MPs on the energy-crisis. They don't have to understand the technicalities themselves. But they do need to be made aware that solutions are available.

Feel free to reference posts made here on the Forum. And in my case, any diagrams/charts I've published here can be sent on to MPs without first seeking my consent.

Posted by: @batalto

anyone want to club in and but some grid level storage?

If so... then probably best to discuss this further on the topic about sharing battery costs.

From my own viewpoint, although I'm contributing information to that topic, I can't actually join in with a combined purchase.

My company is in partnership with others on commercial product R&D using high-capacity lithium storage. So the project's accounts must be kept separate, especially on matters relating to import tax and VAT.

Even so, I share @batalto 's recommendation that readers of the Forum should be buying in such storage at this time. I placed an order for a further 22kWh of LiFePO4 cells yesterday.

The price of cells has risen about 4% this year, but shipping by sea is up 38% due to its reliance on fuel. Aagh!

@derek-m I also wrote to my MP.

Why North Wales and Liverpool are charged quite significantly more for both KWH and SC. The main interconnects for Irish Sea and Scottish windfarms are there.

I does seem very biased. I fully agree with your comments that low energy users and usually the lowest incomes are disproportionately paying into OFGEMs compensation fund that reimbursed those in credit with now Bankrupt suppliers when they are likely in debt themselves. They are compensating those with the privilege of credit.

It should have been spread over usage, use more, contribute more than a fixed fee thar cannot be turned off.

It's biased and wholly unfair people in London pay a lit less in the North. SC should be a national average and same regardless.