The Price of Electricity, August 2023 (UK Market)

now in the summertime last year I made a video about how expensive Energy prices were at the time the trends were seemingly exponential however since September last year the wholesale price of electricity has come down and that decrease in wholesale prices has been sustained all the way from January this year until the middle of June so in this video we're going to examine the electricity Market where we've been what's happened in the last year and where we are likely to go now if you haven't watched my previous videos my name is Anthony and I own a nine kilowatt solar panel array up here in aberdeenshire Scotland many videos exist about those panels in great detail but in this video we're going to talk about a much larger context so although wholesale prices have been dropping quite dramatically since the beginning of the year retail prices have been a lot slower to adjust it's really only octopus agile which has kept pace with the price of wholesale and it's somewhat ironic that a tariff which is designed for EVS and solar panel owners is now the very best tariff to be on if you don't have either an EV or a solar panel tariff if we have a look at the octopus agile graphs you can see there's been a steady decline in the average price from January through to the beginning of June but since July the price of Oxbow sagile has gone up on average but the frequency of price plunges has actually increased and this is down to the fact that this summer time there's been a lot more low pressure and windy systems coming through so we've had an abundance of solar combined with an abundance of wind to create these low minimum prices when it comes to roadside charging for electric vehicles however the effect is a lot less pronounced we're still seeing outrageously expensive prices for some electric vehicle Chargers in some instances you can get a rapid charge costing 75 Pence per kilowatt hour however as is always the case Tesla is Bucking the trend their retail prices for supercharging have followed the wholesale prices somewhat so you can now get a supercharging for about 39 Pence per kilowatt hour in some instances so what we'll do now is have a look at General trends for the last 10 years to see what has been going on with electricity and then we'll have a look at detailed trends for the last 12 months to see how the composition of electricity has changed over that time what we have are National statistics and we have got them in a condensed format called the digest of the United Kingdom energy statistics overall energy Demand on a long-term basis has been decreasing and that is down to a number of factors one of which is down to energy efficient appliances in the house but another Factor towards this is manufacturing industry a lot of factories have shut down and they've gone offshore one of the things you can see here is that coal is statistically insignificant now we still have oil that is a major portion of our Energy's demand and a large portion of our natural gas is used for heating of buildings closely related to the energy digest we've also got a digest for electricity specifically now this graph is interesting and in particular it shows how much of the share of electricity has come from Renewables since 2010 it's gone up considerably and it's now the major contributor to the electricity mix but as we've seen in the previous digest electricity is just a small portion of the overall energy demand for the United Kingdom fossil fuels have been continuing on a downward Trend since 2010 but natural gas is still a major contributor most of this decline is down to the demise of coal power so one other thing to look at is the photovoltaics deployment statistics and in the commentary we've got these graphs it shows you the deployment by capacity and in terms of rooftop solar anything less than 10 kilowatts is worth looking at in statistical terms as you can see investment in PV pretty much stopped around 2016 to 2015. but you can see here that the slope of the graph is starting to steepen up as we head into 2023 and it's just as steep as the graph in 2015 now so what this tells me is that there is an accelerated investment going into photovoltaics this is very historical you can see that there's a very slow rate of investment during this period of time five years worth of lost deployment if you could imagine this slope here continuing up now we would have a much higher contribution from solar power than we otherwise do for the last 12 months in particular what I like to look at is this website here it's called the electric insights website you can see a graph for the whole year from August to August and the data resolution is about one week you can see in August last year gas was a significant contributor to the electricity mix about 51 of all our electricity came from gas at a time when we had this energy crisis if we go to August this year one of the things you can see is that we've got 34 gas contribution so it's significantly lower is it lower on account of increased renewable electricity well you can see there's more wind power being generated and there's a little bit more solar power being generated but a lot of that is down to the weather rather than renewable energy capacity the major difference is the imports and exports they are significantly higher than they were this time last year between 12 and 19 of our electricity comes from abroad whereas previously it was about six percent overall I think we can conclude that yes natural gas is less influential this year compared to last year in terms of energy consumption but of course the price of natural gas is a lot lower now than it was 12 months ago it's good that gas is making up a much smaller proportion of our electricity mix this summer compared to last summer however if you look at renewable energy deployment over the last 12 months not much has actually happened so here is another government database it's called the renewable energy planning database we have got a list of all the individual projects which have been entered into the government database typically we're talking about projects which are more than a certain size so we're not talking about rooftop solar here but as you can see there are several columns we can filter on one of which is the date submitted for the planning application we can see whether planning permission has been refused whether we've got planning permission withdrawn whether we've had appeals and we can also see when installations have been placed under construction and how many are in operation so you can do a lot of filtering of lists and summations of power capacity and what I'll do is present those in a summarized form all told 2.8 gigawatts of new renewable capacity has been added to the mix in terms of electricity projects which are under construction we've got about 9.6 gigawatts and of which over eight and a half gigawatts of electricity is from offshore wind so that is the major player but it's also noteworthy to see that when it comes to utility scale solar we've only had just over 100 megawatts of solar being deployed or under construction in the last year the most interesting attribute is the fact that there is now 35 gigawatts of new projects which have been added to the planning database that is up from 25 gigawatts the year before I think that's a really good encouraging sign that people are slowly and gradually getting more and more confidence into renewable energy grid projects now think the other thing to note is the distinct absence of hydrogen from the energy mix in our grid there is nothing in operation and anything which is in planning is of incredibly small quantity and hydrogen is worthy of another YouTube video all by itself but suffice to say it's uh it's a technology which has had a lot of hype but almost no delivery whatsoever now many detractors of renewable energy have always asked the question what happens when the wind doesn't blow and the sun doesn't shine let's ask another question which goes in the opposite direction what happens when there's too much Renewable Power on the grid and you end up having to pay customers to use that electricity now from a customer point of view that sounds absolutely fantastic but bear in mind these things have to be paid for renewable investors are investing in these things in order to make this thing called profit so of course if prices are negative then by definition there is no profit and that is a very serious problem and in my opinion it's a much stickier problem to solve best answer to address the opposite problems of scarcity and abundance is to differentiate pricing between the two conditions the wholesale Market does that already you get a much higher price of electricity when Supply is limited and you get a much lower price when Supply is in abundance and those market conditions will create an environment which encourages a set of behaviors and Innovations to take place in the market the cheapest of which is choosing to run your heavy consumers at cheaper times of the day that helps somewhat but of course the longer term solution is to make further investments into energy storage such as batteries so the last piece of information that I was able to gather from the renewable energy planning database is that the number of batteries has nearly doubled in terms of applications in the last 12 months we're now seeing about 15 gigawatts worth of new battery capacity being added to the planning system now it's important to understand that the energy database talks about renewable battery storage capacity in terms of power not energy now to understand what that means this battery here is rated at five kilowatts and the energy storage capacity is 10 kilowatt hours that means that it would take me two hours to fully discharge this battery from Full to empty however I don't normally discharge this battery at five kilowatts I will normally discharge this battery at the same rate that I am consuming electricity when I am not having any solar power and this battery will last me all day long but nonetheless that power availability is useful and in particular it's useful in the early evening time in the summer time when I can get the highest price for electricity and this is where differential pricing comes into play I can charge this up for cheap overnight and then I can discharge it in a much more handsome price during the daytime now with that said you may be asking the question did I take part in the National Grid energy flexibility scheme and this short answer to that question is no I did not the whole basis of the National Grid energy saving scheme was that participants would get paid three pounds per kilowatt hour for avoiding consumption during peak hours of particular evenings those evenings were announced 24 hours in advance and those times corresponded with periods when the National Grid thought there was considerable strain on the electricity grid by avoiding consumption during those Peak early evening periods they would be encouraging you to move consumption away to a time when demand for electricity was somewhat lower so the way it worked was that your electricity Supply Company in my case octopus energy they would take a measurement of what your normal demand during a pea period was and they would look at the difference in what your electricity demand was when you started to switch off electricity consumers during the early evening period however in the case of me with a battery my electricity consumption during the peak evening period is essentially zero I don't consume anything at all during a normal evening time so therefore there is no reduction to have for myself and therefore I wouldn't get paid anything what these schemes fail to address is the fact that I've got 10 kilowatt hours of storage here and I am more than willing to discharge those 10 kilowatt hours in the early evening time for the princely sum of three pounds per kilowatt hour and yet I wouldn't get paid for it and that's a shame this here is wasted resource potential during a time of critical shortage and I would say 30 pounds would come in very handy indeed now all told I'm hoping that the National Grid energy saving schemes which we had last winter will be refined coming into next winter now last year wasn't it wasn't just electricity prices which were astonishingly expensive the price of solar panel installation quotes also went up dramatically however I'm very happy to say that this year the price of solar panels not the price of labor for installing those solar panels but the price delivered has come down dramatically last year you would be paying about 187 pounds for a 400 watt panel now you're paying just over 100 pounds and indeed in terms of the price per watt these are the cheapest prices I've ever seen on the market and when you bear in mind that the electricity Market is still seeing retail prices 50 percent higher than before the pandemic I think there are some respectable returns to be had from solar in the short term at least but it's also worth asking the question if every household in this country invested in solar power wouldn't the price of electricity plummet during those sunny days the fact is is that renewable Investments are still quite slow in terms of deployment as mentioned before the renewable energy database shows only three gigawatts of capacity was added in the last year and there's eight gigawatts in construction now any reduction in electricity price tends to discourage Supply investment such as Renewable Power but the converse is also true any reduction in electricity price encourages consumption demand to be developed that means more people buying electric cars it means more people investing in heat pumps and it's just good for the General Health of the economy as a whole the long-term prospects for electricity demand is that it will double over the coming decades when you then also add on to that the risk that there could be disruptions to electricity Supply caused by Wars or extreme weather then there are very much upside risks to the price of electricity so that balance between electricity supply and demand as ever is unstable and it's very difficult to predict in the long term however I do think people are looking at solar panel Investments through a different light now they are looking at it in terms of insurance and security as opposed to just simply being about financial return these things do offer protection against future price shocks in electricity markets in the long term I do think solar panel prices will continue to fall and you bear in mind 100 quid for 1.7 square meters that compares to about 30 pounds for the same area covered in roof tiles so the ratio between solar panels and roof tiles in terms of price per square meter is continuing to fall once that ratio becomes parity these will become your standard roofing materials and at that point your electricity is essentially free I think we can now say that the reputation of natural gas being a cheap and reliable source of electricity and energy in general has completely evaporated last year what we've seen with the octopus agile prices this year is that when there is an abundance of Renewable Power then everybody benefits the price when you get Negative prices that's absolutely fantastic brilliant feel good Factor one interesting little anecdote about my street is that a third of all the houses now have solar power installed on their rooftop I think it's poignant to ask the question how long is it going to be before half of all the houses on my streets are going to have solar panels on their rooftop I don't think we're going to have to wait too long in order to see that Milestone being reached now coming up in a few weeks there's going to be another travel video this time myself and Rachel we're going to be heading up in that direction to orkney Islands but in the meantime I'd like to thank you all for watching and I'll talk to you again very soon

Channel: Anthony Dyer

Views: 3,001

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Id: Me0lFCfVCwo

Length: 20min 5sec (1205 seconds)

Published: Fri Aug 11 2023