Here's a little thread on why Ed Miliband was right on the Today programme when he blamed gas for the UK's high electricity prices. I'm going to write this for a general audience so it will be simple and without jargon. Policy nerds, don't come at me! 🧵 - ThreadSky

elliemaeohagan.bsky.social • 1 day ago

Here's a little thread on why Ed Miliband was right on the Today programme when he blamed gas for the UK's high electricity prices. I'm going to write this for a general audience so it will be simple and without jargon. Policy nerds, don't come at me! 🧵

Comments

idealism2045.bsky.social•22 hours ago

Wholesale costs of electricity are only 34% of a bill (https://electricitybills.uk). Breaking the 'link' would not reduce bills by much. That's before you calculate subsidies. CfDs for offshore wind are generally >£100/MWh. Reducing wholesale costs with less marginal gas would only induce higher subsidy.

jaybut707.bsky.social•20 hours ago

How do our neighbouring countries do it?

Prices vary considerably. Ireland is very expensive; Malta cheap.

https://ec.europa.eu/eurostat/statistics-explained/images/8/8d/Electricity_prices_for_household_consumers%2C_first_half_2024_.png

doctorsnacks.bsky.social•1 day ago

a question I havnt seen: is there a treaty obligation requiring us to stay with gas? what is stopping us just using a different mechanism?

elliemaeohagan.bsky.social•1 day ago

no - at E3G, we recommend using wind and solar as our primary energy source and then stored green hydrogen for the small amount of time when renewables need a bit of help. But at the moment the UK energy system is gas heavy so we need to keep using it while we transition to cleaner, cheaper sources

stockfttp.bsky.social•1 day ago

No.

Gas does not set the price; the supplier of the last MW sets the price. That is almost always gas in GB but its not required to be. Thats a function of the generation and grid available.

MP is not the problem

idealism2045.bsky.social•23 hours ago

Wholesale costs of electricity are only 34% of a bill (https://electricitybills.uk). Breaking the 'link' would not reduce bills by much.

bell.bz•1 day ago

TIL!

elliemaeohagan.bsky.social•1 day ago

When Russia invaded Ukraine, the price of gas went up massively because there was less gas available. I was living in a block of flats that didn't use gas power at all. But my bills went up so much that heating my flat cost £20 a day. Why?

lareyne.bsky.social•1 day ago

I buy a supposed 100% renewables electricity tariff and the house I've lived in 20byears never connected to gas, but here I am paying for it. Time to decouple gas from what we pay

stephanierieger.bsky.social•1 day ago

That’s insane. Curious what your current price per day is?

elliemaeohagan.bsky.social•1 day ago

I have since moved

elliemaeohagan.bsky.social•1 day ago

The answer is that the UK energy system uses a widget called the marginal pricing system. Electricity is sold in "units" - like how petrol is sold in litres. The price of a unit of electricity in the UK is set by the most expensive way of generating that electricity.

richardwild.bsky.social•1 day ago

So when the price of oil or gas goes up, the price of renewable energy does too, even though it has naff all to do with it.

elliemaeohagan.bsky.social•1 day ago

There are many ways of generating electricity: wind, solar, nuclear, gas etc. The most expensive way to generate electricity is almost always gas. So the marginal pricing system means that even if you're mostly using solar, which is very cheap, you'll be paying for it as though it's gas.

elliemaeohagan.bsky.social•1 day ago

Think of it this way: you're in a bar. You've decided to only drink water because it's cheap and you don't want to drink alcohol because you're a bit dependent and it's starting to damage your body. But the barman thinks "what if I run out of water and the only thing left I can serve is champagne?"

elliemaeohagan.bsky.social•1 day ago

The bar man wants to pay all his suppliers the same price so they don't kick off. He also doesn't want his customers getting angry when they're suddenly paying £100 for champagne instead of £1 for water. So, he starts charging everyone £100 for water to cover his bases.

simoncox.com•1 day ago

This actually happens in London bars and explains everything.

elliemaeohagan.bsky.social•1 day ago

(yes policy nerds I know there are holes in this analogy but I think the most important thing is for people to get through gist of how it works)

flatsix723.bsky.social•23 hours ago

This isn’t just a thread. This is the public information piece that nobody knew that everybody needed.

tonybirdlondon.bsky.social•1 day ago

Thanks, I obviously knew about gas prices going up and why - but I had no idea about the rest of it

smiles74.bsky.social•22 hours ago

📌

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