If there weren’t marginal pricing, nobody in the private industry would build more wind farms or submarine power lines or battery capacity - which are lucrative because they produce peak-time power cheaper than imported gas — and these are the things that will drive power prices down eventually.
Whether it is better or not, I have no idea. One could probably see an argument for allowing renewables to price themselves below the sustainable rate for petrochemical based fuels—let them outcompete based on price. Of course that gives them less money to reinvest.
On the other hand, power grids are never entirely market based; the grid needs some dispatchable power for stability sake, and it is hard to get consumers to express their tolerance of power outages in terms of how much extra they’ll pay to keep unused plants in reserve…
E.g. it would be unfair to pay wind farms 10p/kWh and gas turbines 20p/kWh when the electricity they supply is the same and fungible
If there was enough grid storage this wouldn't be an issue, but because there isn't, there are always times where we need gas turbines to top up and those turbines won't turn on for less than it costs them, which is a lot
The upside of this is renewables are very profitable and incentivised
OTOH treating all units of energy “fairly” ignores the added value of dispatchable generation, so it doesn’t really seem fair at all.
On the gripping hand, if pricing was set by the market, customers could be incentivized to help fix the intermittence problem by making their loads dispatchable, which seems like it would be an all-around win…
What do you propose we do when the intermittent sources don’t provide enough energy and all the other power sources have gone bankrupt?
I mean it is a big pile of interests that needs to be optimized. One option is to expose it to the market and let the supply and demand optimization process have a go at it.
You don't actually need the 0.1%. There are easy ways to make it up. There AREN'T easy ways to make up 7%, though.
So the silk incinerator only gets to sell electricity if demand is extremely high and the utility needs to accept even the highest bid.
Batteries would fix a lot of this, but western nations have extremely long interconnection queues (project waiting to be allowed to be connected to the grid), mostly because of stupid bureaucratic reasons.
In the longer term, price spikes like this incentivise the building of batteries - which might be marginably profitable most of the time but profit big time (and help big time) in periods of price spikes.
> Despite campaigning for more data center development two years ago, not much has come to fruition in Scotland. In December of 2021, Oracle closed the Sun Microsystems data center in Linlithgow, Scotland. DataVita has opened a new data center in Glasgow in its parent company’s office development, as well as expanding its Fortis data center in August 2022. No major construction projects have been announced since the campaign began. https://www.datacenterdynamics.com/en/news/scotland-continue...
Why would you open a datacenter in Scotland when the UK rules mean the electricity price is the same throughout the UK, regardless of supply and demand? This is precisely the issue that OP highlights - the UK electricity auction is at a national level, but transmission is limited and the actual supply and demand is not evenly distributed, causing huge curtailment payments to have to be made.
You'd open them because of plenty of customer demand.
I don’t know why Northern Canada is not full of data centers. There’s untapped hydroelectric potential up there as well as free cooling.
If Russia wasn’t a basketcase politically Siberia would be great too.
It turns out most people don't really care about a power line, but do like money. You won't have to offer much money to have a majority saying yes.
https://www.politico.eu/article/uk-government-electricity-py...
It's currently "we'll give you £250 off your bill per year, for 10 years, if you let us build the pylons near you" (the average bill is currently £880 per year)
https://www.gov.uk/government/news/households-near-new-pylon...
NIMBYism is 99% wealthier people pushing the costs (visually or literally) of modern society onto others instead of bearing it themselves.
Localized ballot initiatives are basically unheard of in the UK, though. Everything is routed through central government and its press officers.
Last I was comparing houses in a neighborhood, the houses near a powerline were consistently worth 15k-30k less (3-6% less).
Being given money immediately for your living costs might be more attractive to you, than trying to retain value in an asset you'll only realise in 20 years time when you sell it, or perhaps not at all if you die first.
And it's unsurprising that windfarms in Scotland keep getting planned when the operator can collect these payments while switching off their turbines to reduce wear and tear.
EGL1 has already suffered a 16 month delay thanks to its constructors: https://www.offshore-energy.biz/supply-chain-constraints-pus...
> The partners attribute the delay to market conditions, supplier withdrawals, and a delayed final offer from an unnamed supplier, asserting they took all reasonable steps to secure the supply chain given the challenging circumstances.
We can certainly "what if" with NIMBYs pylon-blocking, but I'd still say it's mismanagement of the EGL, either by the government, Ofgem or the constructors, that have led to these delays. If these delays hadn't happened, we'd have EGL2 available today and the maintenance on old pylons would have less of an effect.
It's actually good news that there's so much interest in investing in wind farms! Scottish windfarm companies do have to bid at auction to be permitted to build, it's ultimately up to the government what bids they accept. The Tories fucked up and set too low a price, no investors were interested - https://www.bbc.co.uk/news/business-66749344 - their successors aren't making the same mistake: https://www.bbc.co.uk/news/articles/cly8ynegwn4o
I'd say the lion's share of time was spent seeking planning permission, writing environmental impact documents, planning the route, building the justification for any compulsory purchases, consulting with interest parties, etc. Some of that would be NIMBYs, but I don't think there was a sustained campaign to hold back EGL2, it just took a lot of bureaucracy, and effectively "death by a thousand cuts". A project gets to be 5 years late one day at a time.
See the timeline and some of the documents here: https://www.easterngreenlink2.co.uk/project-to-date
And Nimby is politics, so I don't see a distinction between Nimby and 'purely politics'.
You used a fine phrase there, "red tape", which describes all the bureaucracy over and above localised objections to national infrastructure. NIMBYs can certainly use the red tape to hold you up, but there's also NIMBY-free red tape that holds you up anyway.
Under "politics" I'd include NIMBYs and red tape... and also political will. The project was proposed in 2015 and didn't really start until 2020. That's politics -- convincing the appropriate people in power that they can and should do something, and commit to funding the project, assigning the appropriate governmental bodies to begin work on it, and in this case engage the companies responsible for electricity transmission and get them to work on it too. Only then do they start planning the route, applying for planning permission, compulsory purchase, holding consultations, hearing objections, etc.
Getting the project going took 5 years, it could have been 0 years if the political will was there.
1. We have two undersea cable projects (EGL1&2) to provide transmission capacity between all the new windfarms in Scotkand, and SE England where it's used. Both projects are years late.
2. But we keep approving and switching on more windfarms in Scotland anyway ("connect and manage" policy)
3. The bottleneck that the undersea cables aim to get around - the transmission lines between North Scotland and Northern England - are at lowered capacity because maintenance is due, and it's non-negotiable.
Basically everything will be great in 2030 when every project delivers at once, but until then, enjoy exhorbitant curtailment costs.
https://ukerc.ac.uk/news/transmission-network-unavailability...