tag:blogger.com,1999:blog-32841798.post3288899381173198151..comments2024-03-28T22:45:51.014+00:00Comments on Capitalists@Work: 'Big 6' Fragmenting? HMG Beware CityUnslickerhttp://www.blogger.com/profile/15929544047783163175noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-32841798.post-7705152234106954402013-11-24T13:14:33.323+00:002013-11-24T13:14:33.323+00:00ND said: "That's a warning for HMG as wel...ND said: "That's a warning for HMG as well as a comment for investors: how much investment towards their mad, hundred-billion-pound energy schemes can they expect".<br /><br />Having done work for HMG, I can confirm they are mad. And so they will carry on until it all ends in tears.<br /><br />ND and RWE, I would say 23 angels can dance on the head of a pin. Actually the "real" cost of electricity generation is unlikely to be significantly different in Germany and Britain. If one mad government distorts the market with high VAT to fund its absurdities, and the other imposes anti-"Carbon" levies for similar government twaddle, then there isn't much difference in the madness in practice.Budgienoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-83173362113700978452013-11-22T11:15:58.406+00:002013-11-22T11:15:58.406+00:00It would be nice to have better figures, eg with E...It would be nice to have better figures, eg with ECO/ROC type costs removed. I don't know any of those.<br /><br />I guess in the UK ECO/ROC is perhaps 10% of the leccy bill. If in Germany all those type of costs are paid by taxes (eg Excise Duty), base generation prices might be pretty similar. But don't know for sure.<br /><br />But the UK is very unusual in only charging 5% VAT on leccy and gas, while most of EU charges the full rate at around 20%. So the UK effectively subsidises domestic gas and leccy by around 15% compared to EU - not the kind of thing you ever hear in the MSM. Quite a market distortion, reducing the incentive for insulation and better boilers. It will be nigh on politcally impossible for any UK politician to change that though, and pay green costs out of taxation.rwendlandhttps://www.blogger.com/profile/07861901317813829419noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-84220869681060008142013-11-22T08:39:36.495+00:002013-11-22T08:39:36.495+00:00well you've found the numbers, I imagine you a...well you've found the numbers, I imagine you are spot on, that seems hard to dispute (unless there is some paranoid reason to think they are not properly arrived at)<br /><br />a parallel set of numbers - mark-up vs wholesale price ('green extras', including system balancing costs) - would be interesting tooNick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-27021875735459969502013-11-22T03:16:35.685+00:002013-11-22T03:16:35.685+00:00ND, I'm very puzzled by the claim seen around ...<b>ND</b>, I'm very puzzled by the claim seen around a lot that "German power prices-as-paid-by-consumers among the highest in Europe" necessarily implies anything about inefficiency and generation costs.<br /><br />From my reading of the stats, the high domestic prices is almost entirely due to the fact that in Germany <a href="http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Energy_price_statistics" rel="nofollow">44.9% (2012) of domestic leccy price</a> is VAT, <a href="http://ec.europa.eu/taxation_customs/resources/documents/taxation/excise_duties/energy_products/rates/excise_duties-part_ii_energy_products_en.pdf#page=64" rel="nofollow">excise duty (20.5 euros/MWh)</a> and levies, whereas in the UK only 4.8% is VAT (no other taxes).<br /><br />If you look at the <a href="http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&plugin=1&language=en&pcode=ten00115" rel="nofollow">Eurostat table of "Electricity prices for household consumers" with all the taxes removed</a>, average leccy cost in EUR per kWh in early 2013 was:<br /><br />0.1752 Spain<br />0.1658 UK<br />0.1498 Italy<br />0.1493 Germany<br />0.1373 EU-28<br />0.1155 Poland<br />0.1007 France<br /><br />So if my reading of the Eurostats is right, German pre-tax domestic leccy prices are 10% lower than UK prices. And UK prices are near the top end of EU prices. Have I misread these statistics in any way, or misunderstood something, ND?rwendlandhttps://www.blogger.com/profile/07861901317813829419noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-48292882582908793932013-11-21T20:08:34.841+00:002013-11-21T20:08:34.841+00:00ND, from a first:utility doc, I think the small su...<b>ND</b>, from a first:utility doc, I think the small suppliers mostly object to what happens when they cross the 250k threshold (or 125k duel-fuel). They suddenly become liable to the whole 250k ECO costs, rather than the margin above 250k. So it's a sudden very large cost - much larger than it was when the threshold was 50k. rwendlandhttps://www.blogger.com/profile/07861901317813829419noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-47629488824868915292013-11-21T18:16:01.005+00:002013-11-21T18:16:01.005+00:00Many thanks. I thought it was nonsense, but withou...Many thanks. I thought it was nonsense, but without folks like yourself putting the alternative POV the 'green' energy providers get a free pass.Kilgore Troutnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-69220291286477866002013-11-21T16:20:42.468+00:002013-11-21T16:20:42.468+00:00KG - in brief, the situation is this (& more e...<b>KG</b> - in brief, the situation is this (& more extreme in Germany, they've gone farther and faster than us)<br /><br />(1) wind and solar have close-to-zero marginal cost and so bid in to the wholesale market at very low prices - zero if they fancy - but they get paid anyway, and their electricity must be taken by the grid by law, so they don't care<br /><br />(2) this actually does indeed lower the notional wholesale price - well it would, wouldn't it - making it very difficult for unsubsidised gas & coal to compete. In some instances the German wholesale price goes <i>negative</i> (sic), when there is so much unwanted electricity being forced onto the grid they have to pay people to take it away (or dump it onto other countries' grids)<br /><br />but why, then, are German power prices-as-paid-by-consumers among the highest in Europe ? Because wholesale price is not the same as <i>cost</i> ...<br /><br />(3) wind and solar alone can't balance a grid, so what happens after the market closes for a particular period, e.g. an hour tomorrow morning, is that the grid looks at all the electricity that is going to be generated as decided by "the market" and superimposes whatever complex jiggery-pokery it must, in order to get the system to balance. This often includes paying very high prices to flexible sources of power that would otherwise not run (stand-by gas, hydro from Norway, diesel etc), and a whole heap of other sub-optimal and sometimes expensive things, the cost of which they are allowed to add to suppliers' bills - who naturally pass these costs on, plus all manner of other 'green' levies etc <br /><br />Hence, 'low wholesale market prices' + lots of costs = <b>high prices charged to consumers</b><br /><br />(in Germany, whole swathes of industry are exempt from some of these costs so they land on everyone else)<br /><br />It is hard to hear the words "being out-competed by wind" without feeling ill. or hysterical. Just suggest taking away their subsidies and see how they reactNick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-87287876307385067702013-11-21T15:14:54.527+00:002013-11-21T15:14:54.527+00:00The current spin on various green blogs and news s...The current spin on various green blogs and news sights is that coal and gas stations being forced to close is a sign of 'success' and that all of the 'scare' stories one hears about supply shortfalls in Germany and England are just 'special pleading' by incumbents being 'out-competed' by wind.<br /><br />Any truth in this?<br /><br />*note: I may be misrepresenting their position. Can't say I understand it. Kilgore Troutnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-14593687289373489772013-11-21T14:43:44.167+00:002013-11-21T14:43:44.167+00:00In the military if you find you are an easy target...In the military if you find you are an easy target you move off sharpish. Once moved you make sure you can't be spotted or targeted and prepare for future action against you. The UK government energy mess is close to being unsolvable. Demetriushttps://www.blogger.com/profile/17198549581667363991noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-16874154905390656472013-11-21T14:35:12.553+00:002013-11-21T14:35:12.553+00:00but when, a couple of years ago, the smaller compa...but when, a couple of years ago, the smaller companies were asked by Ofgem for their views on raising the threshold from 50,000 to 250,000, they were dead keen to see it happen ... funnily enough Nick Drewhttps://www.blogger.com/profile/13670594203660051701noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-4779868669819265822013-11-21T14:27:20.665+00:002013-11-21T14:27:20.665+00:00Dear EDF BE, you're thinking of the the obliga...Dear EDF BE, you're thinking of the the obligation to low income customers, which does not apply to suppliers with fewer than 250,000 domestic customers (+ some gigawatt criteria). Confusingly named Energy Companies Obligation - ECO.<br /><br />The major Renewables Obligation (ROCs), worth a lot more in money terms I think, applies to all suppliers.<br /><br />So I don't think it's such a huge win on this score being a small supplier, a lot smaller gain than economies of scale losses I suspect.rwendlandhttps://www.blogger.com/profile/07861901317813829419noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-22159441096428026672013-11-21T13:56:37.265+00:002013-11-21T13:56:37.265+00:00Isn't there a get-out in some of the green loo...Isn't there a get-out in some of the green loonery if a firm has fewer than 150,000 customers? Surely there is money on the table for suppliers and consumers in the event of the market fracturing into suppliers under this threshold? The loss in administrative efficiency might be outweighed by the tax advantages.<br /><br />Another spectacular own-goal for the regulators.<br /><br />Time to get rid of all this green crap*.<br /><br />* on a micro scaleEDF Blue Eyesnoreply@blogger.com