"Green" policies are destroying this country

Into the hurricane in this case...

There are other problems, As reported in Germany, essentially the expansion of the distribution network simply cannot keep up with the boom in heat pumps, electric cars and solar systems. Germans have to spend billions more on infrastructure. Cheap it is not.

Tbf, every non-marginal generator that is dispatched benefits from the increased SMP. It's not just renewables.

What system of pricing would you propose for "decoupling gas from marginal pricing policy"?

Perhaps, a system where the renewable plant bid a fixed strike price in an auction, and that is their "guaranteed" price for the duration of the CfD contract, and is independent of the SMP effectively? Then the rest of the plants get paid through the marginal pricing mechanism? Because that is exactly what will happen for the RESS auctions, the renewable generators will either get topped up to their bidded in strike price, or if the wholesale is higher, provided a rebate for the amount they were "overpaid" by the electricity market. This mechanism doesn't exist for the REFIT projects built in the middle of the 2010's, but that can't be changed until their 15 year contracts run their course.

Negative payments in this context don't imply loss making for the generator btw, they are just a rebate for the "excess" amount they got paid pay the generation market. One could say it removes any "open ended licence to make money". The generator could shut down, but then they'd make zero. They most certainly would prefer to make the Strike Price that they achieved in the initial RESS auction. And with regard to the chances being slim, RESS sites have only been in operation a couple of years, and already last year we saw negative payments of approx €200m (see my post previously for the accurate amount as communicated by CRU).

I think the phrase "negative payment" is ambiguous, because a negative payment in the context of the balancing market (which is insanely volatile at times, but also generally small volumes on average) is a different thing. I'm not familiar enough with the details of the the UK's offshore contracts, and operational decision making to comment specifically on the event from 28th December though.

PS: Here's another "puff piece" describing the effect of wind on electricity prices. (it's the one I referenced yesterday)

https://pureadmin.qub.ac.uk/ws/portalfiles/portal/148589488/r_kernan_WIW.pdf

Over a barrel and then they'll have their way with you with rising prices. When in my lifetime have I ever seen actual electricity unit costs fall, a few quid off here & there for switching accounts and that's about it.

I was asking why the E.U. will not decouple gas from the marginal pricing policy, but you do not appear to have a reason as to why not.

Doing so and the reason to do so is not complicated. Gas prices are the most volatile in the generation mix and are the benchmark for the wholesale price which every contributor receives. In what other area of business do you know off where the most expensive component in a product, even when that component may be a low a 1% of the total, resulting in the other 99% being charged at the 1% rate and setting the wholesale price ?

If the E.U. are so insistent on following this protectionism model then why not let gas stand alone and set another fossil fuel as the benchmark for the wholesale price. It would lower the wholesale price, and renewables if they really are as cheap as we are being told would still be making a profit. Just not at the level they are making now.

There is nothing that different in the U.K. contracts for difference (cfd) and our system of strike prices. We have seen there recently that when there is no profit in it for the renewable companies they simply shut down when the difference between the cfd price and wholesale price is greater than the difference between their generating costs and the cfd price, and there is nothing I have seen to prevent renewable providers doing the same under the strike price system. So yes it is an open licence to make money in that unless they are making a profit they will not supply. It flies in the face of any contract obligations I have ever seen where rather than having penalties for non-compliance on an agreed and signed contract, you can pick and choose when it suits you to comply.

That link you posted is now 6 years out of date and is generally based on assumptions. Not the least of those being that due to Corrib the use of the marginal pricing policy as the benchmark for the wholesale price would not result in the huge and volatile increases in the price we have seen. While they did identify that "High penetrations of wind power could thus be said to to reduce the wholesale cost of electricity, but increase it`s transmission cost. Since customer electricity prices are made up off a combination of both, the savings here would not necessarily translate to equally high savings for end-users". In the 7 intervening years they most certainly have not resulted in any savings for the end-user.

The other area, and in relation to this proposed plan of wind+hydrogen guaranteeing 100% of our needs at all times with 30GW installed capacity offshore to provide 6.3 GW for consumer use, that they didn`t cover, and the most important imo, is that the CapEx for offshore is much more expensive than onshore and for floating turbines much greater again. Nobody other than the end-user is going to be paying for that through electricity charges, and that will include the 6.3 GW for hydrogen plus all the associated hydrogen costs on top of what the end-user actually uses in electricity.They also made the assumption that economy of scale would lower costs, but from major turbine manufacturers end of years results, General Electric ($2 billion loses from their reneables section) Siemens Gamesa (€ 1 billion and effectively gone bust), and Vestas (selling at 8% below cost), that day has long passed and prices are only going up.

The logic isn`t difficult to follow and it has recently resulted in renewable companies shutting down supply when it would cost them money not too.

Take a wind farm where taking both CapEx and Opex the owners look for a profit margin per MWh of 20%. Their CapEx and Opex combined cost €100 per MWh so they look for and get a strike price of €120 per MWh. Wholesale electricity price rises to €130 per MWh so rather than a €20 profit on every MWh they contribute they are now looking at a €10 loss. There being no onus on them to contribute at a loss and will naturally just stop contributing until they can again make a profit. It is what any business would do in the circumstances. Except these are businesses that have signed contracts to supply at a set price and I know of no other business that would not be hit with penalty clauses for not fulfilling the terms of their contracts. So effectively for these contracted renewable companies it is a licence to print money in that they will only operate when there is a profit to be made.

Don`t be fooled by those puff pieces from wind farms of €2 billion being saved on gas due to their contribution. There is no saving to the consumer. Under the marginal pricing policy. Every supplier is paid the wholesale price of gas. Even if the percentage of the gas in the generation mix is only 1%., 100% of the payout is at the price of gas. With renewable companies getting first shot at filling the requirements then they get proportionally a larger share. It`s in their interest to have the gas contribution as low as possible, (but not at zero), Despite these puff pieces from people with skin in the game, and parroted by greens and lazy journalists under the marginal pricing policy there is no reduction in the wholesale price for the consumer.

Are you not like renewable companies with contracts looking for jam on both sides of your bread ?

You cite a 7 year old paper that got it`s assumptions wrong on economy of scale making costs cheaper, but did say that a reduction in the price of electricity due to renewables would not necessarily mean a reduction in the price to end-users because of unknown capital costs being required, as an example as to how you believe policy has helped the end-user. Yet you do not wish to talk about the proposed future plan for electricity here when we now actually know just some of the astronomical capital costs that would be involved, plus the many unknowns on hydrogen as well as the cost, that would all be lumped on the end-user. What`gives with that ?

I'm sorry. That doesn't make sense. Why has the cost risen? The cost per Mwh will stay at €100/Mwh, the change in market/wholesale/strike whatever price won't influence the cost. The turbines have been purchased, finance agreed, staff have been hired on relatively fixed salaries, long term service agreements signed at fixed price etc. The SMP won't change any of those.

Regarding the marginal pricing, you're not reading what I've said (or deliberately saying the same thing back every time). The argument for savings is not that wind doesn't get the system marginal price, it's that it reduces the system marginal price.

The reason I'm not entertaining the Hydrogen discussion is that the discussion at hand here is about the effect of wind on the SMP in 2022 (and before), and some of the adjustments to market mechanisms into the future. It's just beside the point to talk about the overhaul of our energy mix (whatever that may be).

No, not really.

Its improving 5-10 times slower than the problem is increasing.

🤣 Just as I thought,and you had the audacity to call me a loon, you are so fanatical that you accept everything they say.Turns out the figures were massaged to include "shallow" retrofits like attic and cavity insulation.Good job that SF and myself dragged the true totals from the Dept.Below is the stated aim of the Climate plan and they are nowhere near it.They want 400k heat pumps by 2030(retrofitted to older homes) I hear they have less that 1k done so date.

"The Climate Action Plan has a target to reduce emissions from the residential sector by retrofitting the equivalent of 500,000 homes to a building energy rating (BER) of B2 and installing 400,000 heat pumps in existing homes to replace older, less efficient heating systems by the end of 2030."

Then you really need to read it again.

The costs have not change. They remain at €100, the same as the €120 strike price sought and granted to the wind farm owners which would leave them with a profit of €20 per MWh. What does change, and has, is the fluctuation in the wholesale price. Often on a daily basis. If the wholesale price rises to €150 per MWh then the company would have to repay €30 per MWh (wholesale price of 150 - strike price of 120). That would leave the owners making a loss of €10 for every MWh they contribute. If you read back you will see where that happened in the U.K. and the company made it clear that is why they stopped supplying until the wholesale price changed in their favor where they could again make a profit.

How is it so difficult for you to comprehend that under the marginal pricing policy price. all components in the generation mix are paid at the gas price. Wind doesn`t reduce the wholesale price. It never has and it never will under the marginal pricing policy. Staying as it is the only thing that will do that is the reduction in the price of gas. The wind industries puff pieces on there being €2 billion savings on less gas being in the mix in reality means that with the marginal pricing policy, even if there was only 1% of gas in the mix, the wholesale price is not affected and there is no reduction in the wholesale price let alone €2 billion to the benefit of consumers.. It just means there is a bigger share of the pot for everyone else, with renewables getting first shot at filling demand getting a clear road at maximising their share and their profits.

You may not have noticed the title of this thread but it is "Green policies are destroying this country". It`s not titled "The effect of wind on the SMP in 2022 (and before) and some of the adjustments to market mechanisms into the future", so this proposed 30 GW offshore plan and hydrogen is relevant, even if that was the title. You brought in with that 7 year old report the misassumptions in that report that economy of scale would continue to bring costs for wind generation down and the report identifying that future capital costs would not necessarily bring saving for the end user to back your argument. Is it not incongruous to now not wish to discuss astronomical capital costs on the basis of this proposed 30 GW offshore wind and hydrogen plan that would have a very strong bearing on the price of electricity to the consumer ?

You may again want to look up the video presentation by the E.S.B. on their 30GW offshore+hydrogen plan. and tell us how much it will cost, or are you going to pretend again that you haven`t seen it

Have they found another offshore partner to replace the Norwegian company Equinor that left them high and dry yet ?