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Electricity price predictions

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Announcement from Dept Energy Security and Net Zero; 12th March 2024.

What follows is based on the DESNZ Official Press Release, and the quotations below it from Energy Sector leaders.
I have not yet gone through the actual 'REMA Consultation Document'.


Overview: During the past 8 years Britain has made significant progress towards a new energy strategy:

  • Adoption of Future Energy Scenarios with goals defined for 2035 and delivering Net Zero (CO2 emissions) by 2050
  • Setting constraints on DNO's revenue streams (RIIO-ED2 Agreements) unless they hit targets
  • Incentives to migrate to domestic heating using heat-pumps via the Boiler Upgrade Scheme
  • Incentives to adopt electric vehicles, a mandate for domestic Smart Chargers, and the roll-out of public charging points
  • Establishing the new Independent System Operator and Planner (ISOP) to manage all British energy networks
  • Significant increase in the proportion of electricity generated from renewable sources
  • Scotland and South West England now export more renewable electricity than they import from the national grid


Having placed all the ducks in a row, this Announcement reads as if the government has given up, and thrown in the towel.


1: New gas-powered electricity generation is to be promoted:


The Regulations are to be changed (broadened) such that new gas-powered generation need not capture carbon emissions or implement other net-zero measures when initially constructed:



2: There is (finally) recognition that energy from renewable sources is generated on the extremities of the main national grid network. That requires a change in pricing structure so that those closest to the sources can buy that electricity at lower rates:


The proposal has been to shift to a Nodal Pricing model, whereby consumers closer to the generation source will be charged at a lower rate per Kwh, based on the half-hour tariff blocks inbuilt within Smart Meters. However:


The strategy is being changed such that the Locational Pricing system will be applied only to the wholesale market, thereby allowing Energy Suppliers to directly benefit from lower Zonal Pricing, rather than their customers. The quote suggests that these financial benefits will still bring benefits to consumers and 'innovators'. We need to read the actual Consultation document to see whether that observation is valid, and can be delivered.


3. There is also a comment from National Grid Electricity Systems Operator (ESO).
I'm slightly puzzled by this. ESO's role is being taken over by the new ISOP during 2024, and National Grid ESO will no longer have a role to implement anything in the national consultation being announced.


That quotation suggests that the 'innovators' being considered are working within very large-scale (expensive) technologies.

Such a strategy ignores all the consumer-led steps towards Net Zero, which will not require massive incoming investment (from overseas?).
It's the consumer-led initiatives which are presently lacking in the Future Energy Scenarios. Today's Announcement indicates DESNZ doesn't think that ISOP can (securely) deliver Net Zero by 2050 by continuing the System-led Scenario, it nevertheless wants to persist in shoring up that particular transformation strategy.

This post was modified 1 month ago 5 times by Transparent

Save energy... recycle electrons!

Judith reacted
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@transparent I’ll keep my investment with Ripple Energy with digits overlapping…. Regards, Toodles

Toodles, 76 years young and hoping to see 100 and make some ROI on my renewable energy investment!

Derek M reacted
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I’ve been educating myself on electricity supply issues and the above research briefing is a balanced summary. Newspapers and statements from companies involved are rarely balanced. One point I hadn’t previously appreciated was that the biomass power stations (useful for intermittent demand) weren’t running because the market price was above their strike price and they would have to pay back. Presumably the price of wood pellets had gone up inline with other consumables. 

This comment was also useful since I recalled reading some comments about government subsidies previously. Although old this point is still valid.

thanks to @transparent for prompting this interest

This post was modified 3 weeks ago by Judith

6kW PV south-facing roof 9.5kWh Givenergy battery. MVHR. Investigating ASHP


Trusted Member Member
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Posts: 25

Or is refusal to burn wood when the market price is above the strike price (and the system needs power presumably) simply gaming the system to maximise profits (loop hole there!)

6kW PV south-facing roof 9.5kWh Givenergy battery. MVHR. Investigating ASHP

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