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32 responses to “Why green electricity prices go up when brown prices do – Part 2”

    • Martin

      Thanks for this Dale. It is something I have wondered myself, but I think I’m getting it now…

      Inevitable question: – can you expand on your comment, ‘we have plans for generation side management to smooth the peaks and troughs’ – are you talking of trialing some sort of storage technology? – or am I barking up the wrong tree?

    • Damon Hart-Davis

      Very good, thank you.

      I’ve being trying to understand the balancing market a little and it’s hard to get into inspite of the numbers published by NETA, etc…

      Rgds

      Damon

    • Ted Marynicz

      Dale,

      have you looked at Vanadium Redox Batteries to help smooth wind power supply and demand? They have been used in Tasmania to very good effect. They are expensive though.

    • Chris

      Correct me if I’m wrong but I’m taking from all this that in years to come green prices will be a lot more stable and maybe someday a lot cheaper than brown prices. If this is true, do you have any predictions as to when approx. this transition may take place in the UK?

    • Kevin Tayler

      Dale

      I read your piece with interest. One point – as you say wind varies and there will be times, for instance, during cold anticyclone periods in the winter, when the only available wind is likely to be a long way away, creating a need for expensive transmission. So, wind energy will always only be part of the solution, albeit hopefully an important part. I wonder what your ideas are on how we should aim to produce the remaining ‘base’ load. Pumped storage might be one option but probably not possible on the scale needed.

    • Damon Hart-Davis

      Read the “Without Hot Air” book online at the link in the Blogroll for a much clearer idea of how much of Scotland and Wales would have to be flooded to carry on with current energy consumption patterns just replacing fossil fuel generation with wind.

      Rgds

      Damon

    • Bob Edwards

      Read all this with great interest. It does seem to me though that there is a fundamental problem with the way that the ‘markets’ operate. Is there any political preasure underway that would enable the system to work more in favour of Green prducers?

    • Rowan Langley

      Thank you for the detailed explanation. Confirms my own suspicions that “Comptetion” only really applied around the edges – differing buying power, credit rating, how many / few people to fend customer enquiries, having one system do the work of two for dual fuel deals and so forth, and despite the various names which could head a bill, it all comes out of the same pot.

      Storage and demand management will play a very important part. I built the PV system for my batchelor flat around storage rather than grid connection, Watching demand and the storage means I go off the grid entirely for around eight months of the year.

    • Jeffrey Lam

      Hi Dale,
      with recent news about recession and oil prices coming down, I now have a couple of new questions. First, if wholesale electricity prices come down, does that benefit ecotricity? And will the big six lose out having hedged at a higher price? Second, have you noticed a drop in demand for electricity (if you are indeed in a position to notice) given that businesses are closing down and people are tightening their belts. I suppose you really supply to the grid, so perhaps it is only the price of electricity that you would notice.

    • Anthony Manning

      Further to Damon Hart-Davis’ comment above, I would be interested to know how many turbines Dale thinks would be required to generate all the energy we need, and what area they might cover.

      Also, is it possible to elaborate on ‘(direct as you can)’, above ?

      Anthony

    • Jeffrey Lam

      @ Anthony,
      probably faster if you work it out yourself. Google (or other search engine) “uk electric power consumption”, I’ve got a couple of figures: 346 billion kWh (2003, from MSN) and 400,160 GWh (2007, from stats.berr.gov.uk). A gigawatt-hour is a million kilowatt-hour so these two values are similar.
      One of ecotricity’s (current) turbines is 2MW. There are on average 8766 hours in a year so a turbine running at full capacity produces 17,532 MWh, or 17.532 GWh. Divide 400,160 by 17.532 and you get 22,825 rounded up to the nearest whole turbine. But this assumes they all run full capacity all-year round. Multiply by an average factor (ecotricity or some expert needs to supply this) and you’ll get the right figure, but it should be in the tens-of-thousands.

      Working out the area of a turbine is easy enough (rotor diameter of 82m: pi*d squared/4=5281 sq metres), but I don’t know how far turbines should be from each other. Again we’ll need an expert/ecotricity to enlighten us…

    • Anthony Manning

      Thanks Jeffrey

      It was a slightly leading question. I’m reading the ‘Without Hot Air’ book that Damon mentions, which raises questions about whether we really could meet all our electricity needs using wind – see http://www.inference.phy.cam.ac.uk/withouthotair/c4/page_32.shtml

      I was wondering whether Dale, or Ecotricity, had a counter argument, given their claims elsewhere.

    • Jeffrey Lam

      Hi Anthony, yes I’ve just realised what I’ve come up with is the number of turbines I think we need, rather than the number “Dale thinks”, which is what you’ve asked.

      Still, I found it good to do a few estimates based on publicly-available data in order to understand the issues a bit better.

      I can’t help myself. I’ve looked up the area of the UK on wikipedia: 243,820 square kilometres. I think d squared (6724 squre metres) is easier to work with as a required area rather than pi*d squared/4 as I don’t have to work out how many circles fit into a certain area. That means there is room for over 36 million 2MW turbines if we covered all the UK.

      Obviously we wouldn’t do that, but 10% of this allows 3.6 million turbines, and 1% is 360,000 turbines. This still assumes they are placed just far enough away from each other to not touch, and that they run on full capacity all year round.

      It’s a good question though. I’d like to know how Dale/ecotricity came to their conclusions too.

    • Damon Hart-Davis

      I can’t speak for Dale (I bet he’s grateful for small mercies!) but I think that 100% wind power is impractical for the foreseeable future because we can’t store enough to cover (say) a 5-day lull of low wind even if we overbuilt to cover peak demand many times over and dumped a huge excess most of the time. (Hopefully we’d ship it by interconnectors to our neighbours and/or smelt lots of Aluminium and steel, etc, etc…)

      But wind could and probably should be a big part of the mix IMHO (maybe 25%–50%?) along with some solar and tidal and baseload (eg nuclear) and dynamic demand or ‘intelligent demand’ to move as much consumption as possible to times when the power *is* available and away from where it isn’t.

      Rgds

      Damon

    • Anthony Manning

      In case I come across as someone trying to take a cheap swipe just for the sake of it, I should say that we currently buy from Good Energy, that we Do Our Bit etc, am simply intrigued by these numbers.

      I like the idea of wind providing 25-50% of our needs, but living fairly near to a proposed redevelopment of an existing farm, and witnessing the fervent protest against, can’t help wonder if this is a realistic prospect.

    • Matt

      @ Anthony Manning

      I think Dale talks about planning difficulties in several different publications etc to raise awareness that the planning process is not fit for purpose. Planning permission for Wind Turbines is in the hands of local councils when it should be for government to decide.

      On another note the “doing your bit” by being with Good Energy. Good Energy do not build their own renewable energy sources, rather buy renewable electricity from other suppliers (such as ecotricity). While your own carbon emissions will drop as a result of being on supply with Good Energy the carbon emissions of the country as a whole does not change. What is happening in the simplest sense is you are using green electricity at the expense of someone else, great for flying the green banner but unfortunately useless in the bigger picture. Ecotricity build wind turbines therebye replacing units of “brown” energy that would be otherwise used. Ecotricity are also cheaper than Good Energy aswell just so you know ;D.

    • Damon Hart-Davis

      Hi Anthony,

      I retreat lawyer-like to my careful use of the word ‘should’ above.

      IMHO, one of Prof MacKay’s main points is that to sustain our current energy ‘gluttony’ entirely with RE would require such intrustive vast building works appart from anything else that reducing demand surely has to be part of the story.

      Rgds

      Damon

    • Jeffrey Lam

      Yes I think 100% isn’t practical either. Also, whichever direction the UK takes (coal, nuclear, renewable) there will always be a need for gas spinning reserve (or pumped storage) because of the way the nation puts the kettle on during the Coronation Street ad break (does this still happen?) The power companies could pay even more industrial companies to switch off at peaks I suppose, but I don’t know if that would be enough. (I got this info from George Monbiot’s book)

      Anthony, I don’t know why David McKay does it per person either, when statistics for total UK usage is available.

      From what I can gather, ecotricity put in the planning application, if the local council don’t accept the application, then ecotricity act on any issues addressed. If the application is still not accepted, ecotricity appeal. Most appeals are upheld, and so most applications go ahead, but only after a long delay and a lot of money spent.
      I guess even then the economics still stack up, because ecotricity are still operational.

    • Anthony Manning

      @ Matt

      One of the reasons I came to this forum and have been reading with interest is because I was / am considering switching from Good Energy to Ecotricity.

      However, Dale’s comment in the article above,

      ‘When you buy green electricity what you actually do is buy non-descript (brown in reality) electricity from the market and you buy something called a REGO to go with it.’

      made me hesitate, and spend some time trying to find out the difference between ROCs and REGOs, with not a huge amount of success. The main difference, as far as I was able to fathom, is that ROCs are tradeable, and REGOs are not.

      Good Energy, when I spoke with them, said that they buy ROCs directly from the generating companies that they deal with, retiring around 15% of them annually to help boost the market price of renewables ( they also said that they are in the planning stages of building their own wind farms which, when activated, would account for about 30% of the energy that they supply ).

      Dale’s comment above seems to suggest that Ecotricity buy brown electricity on top of what they produce themselves, and REGOs as a side order to that main purchase, if you like.

      If this is the case, why do Ecotricity not buy ROCs direct from producers and retire them ? Or am I reading things incorrectly ?

    • Matt

      Anthony

      Now before i try to give my understanding i would like it to be known that i am not sure about the technicalities of the ROC/REGO system so i’m sure someone else or Dale will have to correct any omissions i make.

      I think the way it works is ROCs are generated for every 1MW of renewable electricity generated you are awarded 1 ROC which is associated with the generation and is tradeable amongst suppliers that do not meet their renewable obligation.

      Now this is where my understanding gets dodgy. I THINK the REGO is also attached to the generation but is only “proof” that the electricity was generated from a renewable source.

      I am of course, as always, open to correction.

      Ecotricity have 2 tariff options. One is around 37% renewable (generated by the company’s own turbines) and the rest topped up fro electricity purchased from the grid (effectively brown energy).

      The other option is again 37% generated by ecotricity but the rest is bought from existing green supply (so 63% is provided similarly to Good Energy’s means). I don’t know if this means ecotricity buy ROCs because they’ve already far exceeded the government set renewable obligation and can then sell off their excess ROCs.

      Maybe the purchase of electricity (the 63% i previously mentioned in this case) is separate from ROCs or maybe they are part of the same thing ie ROCs come with the electricity, i dont know. I am inclined to think it is the former.

      Does that sound about right?

    • Jeffrey Lam

      @ Anthony
      I think the reason ecotricity don’t buy ROCS and retire them is that it allows them to match the regional electricity supplier on price, and it’s cheaper for ecotricity, leaving more money to plan and build turbines.
      Or if you go for their 100% renewable tariff, the premium covers the price of the ROCS, I believe.

    • Anthony Manning

      Thanks Matt

      Your explanation sort of helps, but I have to admit to still being a little in the dark.

      It helps, in as much as you are saying that the remaining 63% on the New Energy Plus tariff is definately sourced from renewable supplies, but I’m still unclear about why that 63% is not bought in such a way as to allow ROCs to be retired.

      I’m also still keen to have some clarification on the ‘(as direct as you can)’ point.

      Ta

    • Matt

      Anthony.

      My guess is that Good Energy are able to retire a percentage of their ROCs because their outgoings are less than ecotricity’s. They don’t build and at a hefty £2 million (ish) per turbine, ecotricity have to sell off their excess ROCs to go towards this where as Good Energy do not.

      I suppose this is a way of Good Energy lessening the blow that they dont build by doing something which appears selfless by retiring the ROCs instead of not making money from them.

      Im still holding out for a post from Dale about this though…

      Cheers

    • Jeffrey Lam

      Matt, Anthony,

      Dale made a post about Good Energy dated May 2008 (if you click the ‘Energy’ link under Categories, that’ll narrow down the number of posts). And somewhere there is a discussion between Dale and Adi about Good Energy’s v ecotricity’s approach, but I can’t remember where it is.

      Jeff