Thank you for this great analysis! Gave my brain a bit of a workout - I found the bit about battery providers especially interesting - had never thought about that sort of profit angle to the wave of batteries required for renewable energy to work! I was wondering, more fundamentally, why do renewables need such generous subsidies to set up? And are these subsidies basically required forever? Or is there some feasible way that renewable power could stand on its own two feet at some point? Thank you very much for the analysis!
I don't think intermittent renewables could ever stand on their own two feet.
At times of maximum generation, often the market value is zero, or less. Lots of generation * zero price = zero revenue. At times of lowest generation, wholesale prices are highest, so zero generation * high price is still zero revenue.
Wind and Solar need the largely unachievable Goldilocks situation of moderate wind and sun and moderate demand. But that doesn't happen often, so in a free market, their economics would be screwed.
They only survive because they get a high and rising CfD or FiT price, or ROCs to top up their income. We pay for that inherent inefficiency. Solar might just be able to cut it with batteries at low latitudes, where the day length does not vary much. But not at Northern European latitudes.
One of the worst unintended consequences of this kind of subsidy is the effect on the steady, reliable sources of power that we need so badly. When the wholesale price drops on windy or sunny days, coal, nat gas, nuclear, all lose money and become unprofitable. If this system isn't changed, and soon, our best sources of power will start going out of business, and we'll be left with unreliable, intermittent power only - a nightmare.
Thanks. "Cliff edge" is right. We really need more nuclear power plants. SMRs are a great idea, but so far, they're still not economically feasible. The leader in the US is NuScale, based right in Portland, near my town of Sandy Oregon. I'm trying to get an interview with them and a tour to see how they're doing. They lost a proposed project in Idaho for lack of sufficient capital from investors, but I'd sure like to see them succeed.
Thanks. "Cliff edge" is right. We really need more nuclear power plants. SMRs are a great idea, but so far, they're still not economically feasible. The leader in the US is NuScale, based right in Portland, near my town of Sandy Oregon. I'm trying to get an interview with them and a tour to see how they're doing. They lost a proposed project in Idaho for lack of sufficient capital from investors, but I'd sure like to see them succeed.
And for ancillary services to provide inertia, spinning reserve, frequency management etc. Some of that goes to batteries, and some to the plants they keep running for grid stability reasons.
I am afraid, the "article" is full of wrong information, conflations etc. This could not ever result in a great analysis as the author simply skipped over the part of collecting sufficient and correct information.
You will convince no one here (including genuine industry experts), by posting such opinionated, incomplete, irrelevant twaddle.
David is fundamentally correct. Octopus customers are being subsidised by everyone else - for now. It's a modern pyramid selling scheme, which 𝘄𝗶𝗹𝗹 soon come crashing down with a bang. And , along with it, any remaining socio-economic stability of the UK - just as the Long March communists always planned.
No, I think it's you (and David) that have completely the wrong end of the stick.
David has mixed energy producer schemes and end user (members of the public) schemes together with gay abandon. If Agile was the 'pyramid scheme' you assert, then it wouldn't be running six years on. David is not a 'genuine industry expert', he's a writer, that makes a convincing story by munging 'facts' together to wind up his readership because they don't know any better. The whole energy industry in the UK is far from perfect, but David's issues aren't the real problems. The fossil fuel brigade has far far bigger subsidies and tax breaks than the green generators, the vast majority of which in the last decade are building out completely unsupported by the govt.
I don't hold a candle for the oil and gas industry, but they do provide billions in taxes to the Exchequer each year. Quite the opposite of subsidies.
Renewables get much of their revenue from Government mandated subsidy schemes. ROCs cost £7bn, CfDs and FiTs an additional amount of close to £2bn each. Then there's ~£3bn of grid balancing costs each year. Plus National Grid has announced £112bn of grid expansion costs out to 2035.
You need to come on here with facts and evidence, not just lazy opinions.
Strongly held belief in a thing is like pride, it goeth before the fall. It would be helpful to all here if rather than generalizations mixed with ad hominem, you brought a cogent set of statements with data to support your position. Bombinho is in the same position. Flame throwing angst does nothing but undermine one's position. This is the basic way of argument by ideologies.
In the US, the 'Inflation Reduction Act' (IRA) calls for the subsidies to continue until we reach "Net Zero". Since net zero is impossible, yes, the subsidies will go on forever - or until congress wakes up and revokes or at least amends the IRA.
The genius for our Representative flunkies is that they can peddle this ad infinitum because there are so few honest agency heads, academics, and experts willing to be honest with the citizenry. And of course the media itself is complicit in truth hiding because - heat death!
It will probably take two or three years yet, depending on just how barmy Milliband is once he gets hold of the reins - but yes, reality will kick in with a bang at some point.
If course it wouldn't. We have had growing subsidies in all manner of places in the US for decades (the last balanced budget was 25+ years ago) and there aren't uprisings over it. The citizenry is partly uninterested and partly told pretty lies by government as a matter of course. This is why no government leaders discuss the vastly increasing rate of coal uptake now and planned for by China and Indonesia to build solar panels. That wouldn't look very good.
Actually, most customers cancelled their Agile tariff during the energy crisis. It was set almost permanently at the contractual maximum for months on end - but being a special tariff it was not subject to the OFGEM cap. Those who stayed were there only to benefit from a high export tariff for solar surpluses.
The vampire squid of the industry has probably been expanding too fast - including internationally. Reminds you of the way Bulb bought business - again including international expansion.
Octopus must be subsidising this tariff from their other tariff prices otherwise they go bust. They are a retailer and exposed to the system prices and need cfds from generators to manage their risk. Unless they are being subsidised by a generator they can only balance their risk on this tariff by internally cross subsidising.
It's a gimmick the costs are like advertising. My guess is that they have calculated how many customers they can afford on this tariff, once that number gets close they will either pull the tariff or substantially change the T&C's.
Your analysis of the gaming potential of battery operators is spot on. The whole system is designed to cover up the real cost to the end customer.
You might want to look not only at the few occurrences of negative prices. During high price periods Agile customers actually can pay more than flat rate customers. Currently this can be up to £1 per kWh but prices above 30p are absolutely normal during peak hours. So Agile customers do in fact offset the low prices during high prices. Not every Agile customer has sufficient battery capacity to ride through high prices.
But all Agile customers help to adjust demand and supply so that we do not have to heat the air, sea and river like the French nuclear plants during low demand times or our former coal plants who mainly evaporated water in hundreds and thousands of tons to ride through low demand times.
It is not the case that Agile customers have negative bills. They may me able to achieve lower bills. But this was normal when we had ample of electricity suppliers and usually got achieved by changing tariff and/or supplier. Where was the outcry of Freeloaders then, when people changed to favourable tariffs?
Of course I am. I am even an Agile customer, making sure that your price too is lower as I avoid the price penalty between 4 and 7pm for us all, which otherwise would have been packed onto your invoice too, if you were an Octopus customer. Whilst I pay the penalty myself in full if I incur the penalty. No need to thank me, my lower electricity bill is thank enough.
Tell me one supplier that is more engaged than Octopus Energy to allow their customers to help improving the energy system and benefit in return?
ON the one hand you are claiming that the high peak period charges offset negative prices, and on the other you are admitting that you avoid paying the peak prices, which means they are not offsetting your extra consumption at low prices at all.
The reality is that the Agile tariff works out very favourably for some people: for example, singles who are out until late, when they can put their wine stained shirt in the washer to run at 4 a.m. Or those with solar panels and a battery. Even if you take the simple time averaged price - reflecting reduced use during peak hours - the average price over a month typically works out to be well below the OFGEM cap price which allows for full costs including OFGEM's recommended hedging programme. Of course, the price involves no real hedging at all, since it is simply derived from day ahead prices that are paid to wind farms for most of their output, and also represent the bulk of balancing trades by other generators. Bypassing the need to hedge saves a large chunk of cost in the OFGEM cap.
You aren't going to win this argument because all that you have is language from the Octopus tract you were given when you signed on. As Sean Connery said in The Untouchables, "it's like bringing a knife to a gun fight."
At the end of the day all of the current policies being put in place are aimed at long term strategic incentives to move power companies over from gas to renewables. Creating a scenario where they can profit from increase battery storage will drive.... an increase in battery storage. This is exactly what the infrastructure needs to balance out renewables famous unpredictability.
Just like the subsidies to move people from petrol to diesel, once the aim is achieved then policy will shift and things will be rebalanced.
In the meanwhile, anyone choosing to move to Agile has the potential to reduce bills by balancing their demand to off peak periods while accepting the underlying risk of increased prices if there are large scale changes to wholesale prices.
The trouble with your theory is that battery backup is incredibly expensive to build, install, and maintain, and somebody has to pay for it. Guess who? I did a study on ESS, the leading US grid scale battery maker, in Wilsonville, Oregon. You can scroll down to the part about 'batteries for large capacity for storage' here:
The French deliberately over built nuclear capacity because they wanted to manage their demand/supply balance by exporting to the interconnected countries when they over produced for French demand. Its a good job they did as without those imports of French electricity, the UK, Belgium, Holland, Germany and Italy would have had serious problems over the years.
Unlike Nukes, and unreliable wind and solar, coal ( and gas) generation can load follow, so there has been few times of over generation from these sources. Again without this generation the grid would have collapsed without back up and their ability to provide grid support services.
No-one has answered what will happen without this sort of back up generation in the future. Batteries are only so good for a small amount of time and limited demand and are very expensive. Hydrogen is still 'pie in the sky' for practical purposes.
You cannot run a system using just 'must run' generation.
"Unlike Nukes, and unreliable wind and solar, coal ( and gas) generation can load follow"
Nukes and coal certainly cannot load follow, hence the massive curtailment of wind and solar we pay for. If only they could load follow. But the reality is that they compensate low load by dumping the thermal energy from cooling towers or into bodies of water (the reason why these often sit on the shore or on river banks).
As solar and wind are easy to reduce in output (load follow) they get turned off instead.
Allegedly as this were the cheaper option. Unfortunately this is an urban legend as we pay both anyway, whichever one we are using. We could turn down nuclear and coal, if this would be possible. But it is not. Coal modulates in days to week ranges and nuclear in months to millennia time spans. Getting our now dismantled local coal plant after an emergency stop back on the grid was around 2 weeks. Getting local solar or wind back into the grid after a shut-off can be as much as milliseconds.
You have just about got everything upside down, very 'orwellian' in fact.
I worked in the Electricity Supply Industry since 1977 until more or less retirement at increasing levels of seniority , I think my 'picture' of power stations is reasonably accurate. Bye.
Bombinho, you are confusing yourself. I suggest you read more of Mr Turver columns and learn damaging unreliables really are rather than how you want them to.
What is it, Octopus Energy sells, buys and where do they buy?
It is spot market electricity with a mark-up multiplier which is sold to the customers. So it gets bought on the spot market at a price. The mark-up can be low, negative, high or very high as this is the nature of a multiplier.
This means, when Agile customers buy expensive units then they contribute more (than other customers) to the results and when the buy low or even negative then they gain in comparison.
This article makes many mistakes, for example identifying the green bars as wholesale price. This is plain wrong. There is no such thing as "a wholesale price" in the first place. The green bars show one particular high trade - low turnover segment. Most electricity is neither sold nor bought on the spot market(s).
Why do we have spot markets? Certainly not to buy and sell the gros of the electricity. But to allow for a certain adjustment supply and demand. High demand, like for example when Bulb was forced to buy on the spot market, leads to (in this case permanently) high prices. More electricity is sold to the system. Lower demand than the bulk sold outside the spot market can lead to low and even negative prices. Due to the low prices it is more likely to be absorbed, demand is shifted into such times.
Hence the spot market is a certain instrument to adjust demand and supply. And it is therefore necessary for the system to run, albeit prone to abuse.
If you wanted to report on flaws of the spot market you should have concentrated, who can buy on the spot market. It is not hard to find the list of licensees. And certainly customers cannot buy there when it is cheap. Hence most customers have no incentive to adjust their usage to the supply.
But who buys really on the spot market?
Well, suppliers like Octopus do. But particular fossil fuel generators do also and in large quantities. They buy this cheap or even negative priced energy and sell it at their high contracted price back to the system. This means, they don't need to run their own generation and make a living from doing nothing. The reason wind turbine or solar generators are not bankrupt is that the receive subsidies in order to afford those low prices. This means nothing more than that their accounts are only proxies in the cash flow of the subsidies and our subsidies, paid with consumer money (from all customers, including Agile customers) and tax money, actually do fund fossil fuel who experienced windfall profits (the same ones BTW that were excluded from paying windfall taxes btw). Since particularly these fossil fuel generators can buy and sell they can even determine the prices themselves (some might call that "manipulate").
It looks like you were well meaning but totally messed up your analysis by not looking close enough. You might want to sit down and get your information a little more complete than just looking at the surface. Maybe something informative (and then even factual correct) then comes out?
I note that you have not published any posts or notes on Substack, nor have you liked anything nor any subscriptions. From reading your comment, it also appears as though English is not your first language, so I can forgive that most of what you have written is incoherent.
You seem to omit from your analysis, that the main reason prices go negative is that the output from intermittent renewables is not controllable (except by curtailment), so when supply > demand, prices go negative.
Can you explain the mechanism by which renewables generators subsidise fossil fuels.
He has a point in that short term and spot markets are not (presently) the whole story. But there are 2 issues with his poorly articulated rant:
1. Nothing about the long term forward hedging of generation output belies your analysis of the markets rigged in favour of renewables.
2. Traditionally, the aim of long term progressive hedging was to forward sell base load (which varies, of course, by season, day of week, etc.). In a "fully" renewables system, the only base load source would be a small amount of nuclear. Generation backed hedging no longer works. The wholesale market is broken, and it will end in tears.
I would prefer if we could drop the expression "base load" where it belongs, the recycle bin.
It has no justification or way of being measured in electrical circuits and is a purely imagined figure only good to justify the use of ancient generation assets, incapable of adjusting to demand and supply.
You are absolutely right, English is not my first language, I might otherwise have expressed the flaws of your article in a more subtle way.
Is nuclear controllable? (You may want to have a very close look at timings of nuclear, start with "Why haven't we turned off the nuclear reactions in Chernobyl or Fukushima" or "Why are nuclear plants constructed the way they are, including basins for cooling nuclear fuel over very long periods of time?".
Is coal controllable? Compare traditional burners of coal plants as most were constructed with a few newer developments.
Gas is the only thing we really have managed to somewhat control and adjust. Mostly so because of their comparably small size.
Now to your question of how renewable generators subsidise fossil fuel.
I offer you a deal, you work for me full time without any material compensation. Since you have then no income, you will not be able to keep working for me. Hence you will be "subsidised" with tax credits to keep you going. Sounds fair?
By the way, at the same time I pay a colleague of you a nice wage for the same kind of work, which I can afford since you work for free.
And of course my account is nicely filling too.
Now please analyse this situation, have a look where the cash flows and who is subsidised in fact. Tell me in your own words what is happening here. Who is making the money? Who really benefits from the subsidy? Really you? Me? Your colleague?
Now also look how the situation would change if I were not permitted to not pay you for your contribution.
Your analysis of this situation we can then use to look closer where subsidy cash really flows to in the energy market. I am looking forward to read your analysis. Whilst this may look like a needless exercise and stringing out the conversation I think of this to offer invaluable insights. Whilst if you are struggling I can modify this with some example figures to make things more clear.
That is because you have looked at the only moment when wind had been benefitting. But you turned a blind eye to all the years before and after.
You also turned a blind eye to the fact that wind and solar were almost exclusively the only ones who paid windfall taxes. Whilst gas generators had been excluded by law from paying windfall taxes and oil and gas offset it against "cost" of new exploration.
You forgot to answer the questions though. If you are paid nothing or peanuts (like wind and solar are paid almost all the time before and after the energy price crisis, which you also pointed at in your "article") and others make big bucks by selling your products at high prices (long term contracts) are you really the one that benefits, that is subsidised? Why then is the money not racking up on your accounts but on those who make money with your products?
The market value of what wind and solar produces might be worth peanuts, but what they get paid is massive. They are currently the most expensive electricity.
CfDs and FiTs are index-linked so go up every year with inflation, so the generators get paid more each year for each MWh they produce. They never receive "peanuts".
ROC-funded generators are different and they received a windfall during the energy crisis because they get awarded their certificates in addition to the market price. During the energy crisis their revenue per MWh rose in line with the price of gas-fired electricity, but has now fallen back to the top-end of pre-crisis levels. Their total revenue per MWh has never been "peanuts" and never will be.
"Can you explain the mechanism by which renewables generators subsidise fossil fuels."
As the discussion starts going in a tangent I try to make it short:
Fossil fuel generators are getting paid comfortable monies for generating, which is sold to us. But what they deliver to us is often cheap or negatively priced wind and solar energy, bought on the spot market to subsidise. We though still pay the full price.
In order for solar and wind to survive (as well outside of a temporary energy price crisis) they are getting paid peanuts (the subsidies) in order to be able to survive. This is well reflected in the stock market. In effect therefore those subsidies flow straight onto fossil fuel accounts and to a much lesser apportion lower the cost of some Agile customers (who still keep paying).
If solar and wind were paid proper market prices they would not need subsidies but then the source of cheap units, to buy and sell back to us at full price, would disappear. We would not need to prop fossil fuel purses and energy would become cheaper to all.
Agile would not offer benefits anymore to Octopus Energy customers. I am absolutely pro this move.
You are right to point out that short-term and spot markets are not the full story - as I have tried to point out many times myself in both substack articles and on TwiX: the retail price of electricity is 𝗼𝗯𝘃𝗶𝗼𝘂𝘀𝗹𝘆 not driven by the wholesale price of gas, yet so many keep repeating the myth.
But David is essentially correct in this post, and you have done nothing but cloud the issue. Other consumers are subsidising Octopus customers, while grifters like Greg Jackson and Dale Vince make fortunes.
Since you are such a smartarse, why don't you write a detailed article of your own? Here's an example you could look at, if you actually want to understand the situation in detail, and then make a useful contribution to the debate.
Especially if you are familiar with operational details of the current wholesale Markets, many people (including possibly David and other commentators) might benefit from a detailed analysis of the relative contributions of long term hedged positions v. short term - front week, day-ahead and in-day fine tuning.
Then, perhaps, you could explain how the growing proportion of renewables screws up hedging strategies and - as you rightly infer - means that wholesale market positions rely more on trading shenanigans than actual generation. Of course, actual generation is ultimately needed, so the entire house of cards will eventually come crashing down one day - probably quite soon (next two or three years in the UK once the Milliband idiot has done his worst).
"But particular fossil fuel generators do also and in large quantities. They buy this cheap or even negative priced energy and sell it at their high contracted price back to the system."
And when these fossil fuel generators have massive short positions not backed by generation (for example because they haven't bought forward any gas to run their plant), and there is no wind?
What then, genius? How do they fulfill their contracts?
If they 𝗵𝗮𝘃𝗲 bought the gas, and they fulfill their commitments by buying on the spot markets rather than generating, what happens to the gas?
You have a poor understanding of electricity markets in GB. The bulk of electricity sales are priced off day ahead prices, which is the basis for the Agile tariff. The reason this is so is that renewables generation is uncertain until weather forecasts are sufficiently accurate to reduce the risks of failure to generate contracted sales volumes. If a wind farm sells ahead more than it produces it will be billed for the cost of the shortfall at balancing market prices, which can be very high when there is a general shortage of generation. For a wind farm selling ahead at fixed futures prices is not really hedging: it is speculating that the weather will allow them to meet the contracted sale.
Framework PPAs do exist of course - guaranteeing to take all the output whenever it occurs. But if they are not priced on the day ahead basis they will be priced at a significant discount to electricity futures prices to reflect the performance risk.
"The bulk of electricity sales are priced off day ahead prices"
Last time I looked at the statistics, over 60% of the energy in the UK were sold long term contract up to two years in advance. That was before CfDs, PPAs etc.
Whilst the spot market itself is a high turnover low volume market, meaning many sales but the same energy just changes hands several times.
But maybe you have some reliable sources that tell otherwise?
"For a wind farm selling ahead at fixed futures prices is not really hedging"
Why should it be? The available power could be sold in a similar way as if the buyer would install their own wind and/or solar generation. No hedging but reduction of grid/transmission load.
The buyer gets units at a comparably low price when these are available and has to buy less from their alternative provider at higher prices.
The seller has a guaranteed take off and does not need to worry about negative prices.
Most CFDs are priced off day ahead prices. (Exceptions for baseload technologies). It would be crazy to open up an exposure between the CFD pricing basis and the basis of sale. The rest of intermittent renewables cannot afford the risks of fixed price sales and then being unable to supply from own production: that would be a quick route to bankruptcy. So essentially, Drax and Lynemouth aside, all renewables are PRICED on a prompt basis. That doesn't mean that they don't have framework sales in place with a particular counterparty where they nominate the volume, perhaps some of it even as late as just before gate closure via a CC on an FPN.
As I have explained, the forward hedging market dried up in the energy crisis, and it has not regained its health. You can see this easily by looking at a longer term chart of trading volume and open interest for NBP gas futures which underpin electricity hedging markets. Both fell as the energy crisis gathered pace, and the costs of initial margins and mark-to-market maintenance margins became prohibitive. The trade has roughly halved. Probably just as well, because we have to pay the cost of hedging in our bills, even if you as an Agile customer evade them.
Could it be possible the the shift away from long term sales was not by accident. As you said, renewables are locked in on the spot market. Therefore such shift would be inevitable with increasing penetration and only will continue and soon enough spot market sales are trading the gros of the volume.
Unless of course new trading instruments allow a shift.
The current rigid structure of the energy market with fixation on hedging ignores partially simple mathematical principles. Do you ever have tried to sample random data for statistical purposes? If so you might not have been able to avoid to gather that random means statistically equal distribution and random is only the ripple.
I guess, you are pointing me in the right direction, some business tactics might no be so successful long term.
You also do not understand that the reason why fossil fuel generators trade in the day ahead markets is that they have typically provided hedge sales to retailers that wind farms cannot make. Retailers are effectively commanded by OFGEM to hedge future supplies, and the only possible sources for that are dispatchable generators who can more or less guarantee that they will be able to supply the contracts they enter into.
However, in very volatile markets the risk of a breakdown and eye watering costs to buy back hedge sales substantially reduced the volume of hedge sales by such generators during the energy crisis: other costs include financing mark to market and performance bond margins, which made hedge sales into speculation on working capital funding.
For generators with a high fuel cost they would typically buy fuel futures at the same time as selling the power the fuel can produce, locking in a margin. Drax operates similarly on its ROC subsidised units, selling hedges only when they offer an adequate margin against wood pellet costs. Nuclear power will have a predetermined low fuel cost, and in normal markets is more interested in avoiding low price spot sales in conditions of renewables oversupply. When it comes to the day ahead market nuclear will be almost absent unless they are forced into buying back volumes sold previously because of a plant problem. However, renewables will be seeking to ensure that they earn maximum subsidy by making firm sales ahead of time, since if they leave it until the balancing mechanism the price will not be pretty.
If the renewables forecast volume exceeds forecast demand less previous sales by other generators then to avoid curtailment and loss of subsidy they will have to persuade other generators (perhaps including ones at the other end of an interconnector) to reduce their planned generation. If a fuelled generator is to cut back production then it will end up with surplus fuel - and particularly where this is gas they will need to sell the gas they had previously bought: ensuring that they do not lose out in doing this will set the price at which they are prepared to buy in renewables generation to meet their contracted sales. In this case the renewables generator get to produce via a chain sale to the CCGT plant which had already sold to the retailer who had committed to supply the end user.
Once the maximum acceptable amount of dispatchable generation has been backed out the remaining bunfight is between renewables generators, often with added complications from grid transmission constraints if there is a wider surplus. The way the market operates is to find the cheapest to curtail, leaving the most expensive generation with the bigger subsidies still generating. This will produce negative prices, since revenues are still positive at any negative price lower in magnitude than the subsidy.
With the exception of those CFD contracts that cease to pay out when prices go negative for an hour or six, all renewables generation continues to get its subsidies.
The Long and the short of it is that the electricity markets (wholesale and retail) are rigged, exactly in the manner you describe.
The UK has zero chance of reaching Net Zero by 2050, or 2100 for that matter, but we could spend £2.5 Trillion enriching grifters like Greg Jackson, Chris Packam and Dale Vince in the meantime. The real joke of it is, it's the gullible useful idiot leftards who are facilitating this capitalist scumbag scam, because they've been signed up to the cult of a non-existent climate emergency.
I have often wondered about the fraud that is 'renewable only' electricity contracts for consumers.
We know that at times such as cold calm winter nights the total 'renewables' supply to our grid is close to zero. (Not actually zero as some wood burning generators are classed as renewable). In these circumstances does the totality of demand from 'renewables only ' supply contracts exceed the supply? If it does, surely such virtuous customers should be being cut off by meams of their oh-so-wonderful smart meters until the supply improves. I don't have any data about the renewables only supply contracts or demand to make even an educated guess, but it would be really interesting. I suspect that there has been a lot of overselling.
More on-topic, I'm increasingly alarmed by the use of time-of-day or surge pricing. The people who will suffer most are poorer families with small children, who will inevitably need to use electricity when it's most expensive. Not everyone can afford or would want the latest expensive whizz-bang gear that checks the prices over the internet and only heats your hot water when the prices are at their lowest. Yes, the suppliers do still offer single rate tariffs, but the pressure is there to get us all on 'smart' meters and variable tariffs. This effectively shifts costs from the supplier to some (the least 'agile', i.e. the least well off) of their customers , and amounts to an unpleasantly regressive policy.
I'm considering an article on that very topic. The suppliers have mealy mouthed footnotes to their advertising, explaining they buy REGOs and/or ROCs to cover the times when the the wind is not blowing and the sun is not shining. As if spending money on pieces of paper makes the emissions vanish. It's a scam.
On the surge pricing, yes you're right, those least able to switch their consumption patterns will be hardest hit by surge pricing.
Have a look at energy monitoring pages. Then show me one day, or even one (half) hour where wind and solar had been zero. You will actually be surprised how much energy still comes from wind and solar. You might have a stab at https://wind-curtailment-app-ahq7fucdyq-lz.a.run.app/ giving very detailed historic information for the last years.
The reality is that your power supply will depend on which generators you are close to and what they are producing. Live in Northern Scotland, and your power will be mainly wind and hydro, sometimes supplemented by gas from Peterhead and nuclear from Torness and Hunterston when it's not windy. Live in Ashford, Kent and your supply is likely a mix of French and Belgian imports much of the time. You can get an idea of how the power flows mix here:
Look at the Regional section: the map is clickable, and you can toggle the display of power flows between regions.
The question of what gets turned up if you turn on your oven is perhaps more complex: perhaps a battery reduces its rate of charge, or perhaps your region reduces its exports to its neighbours so that the actual generator with the flexibility to increase output may be a considerable distance away, with the power flows across the grid rebalancing. Your supply will not then come from the generator that increased output at all. Generators with flexibility tend to be gas or hydro (including pumped storage), although you might see a curtailed wind farm start up again if you are nearby, though such events are quite rare.
Everybody gets the same sources as their neighbours, regardless of what they think they are buying. But not everybody gets the same sources if they are in different parts of the country. If you live in part of the country with a supply surplus (e.g. windy Northern Scotland there is no way your supply will include anything from the interconnectors to France, or even Drax and RATS coal fired station and Pembroke CCGT.
So Octopus Agile users are being paid to help balance the grid.
Green energy generation is being encouraged.
Large scale energy storage is being encouraged.
Eventually, there will be enough grid level storage and demand-side control to smooth out the price fluctuations throughout the day and hourly price differences wont be so great and even non-octopus-agile customers benefit.
Ah, the old deflection drivel, from a neo-Marxist clown.
So, presumably. You agree with the baseless, moronic comment about "enough grid level storage"? Please elaborate, and you too can be exposed as yhe clown you are.
Expensive intermittent renewables are being encouraged. The extra expense of large-scale storage is being encouraged, which can only add to system costs. And our electricity costs are already among the most expensive in the developed world.
If you think this fits the definition of "working well", I have a bridge to sell you.
"The currently often below 4p/kWh (£40/MWh) offered to windfarms"
Are you really as ignorant as you seem? "Offered" by whom? AR6 strike prices have been set at ~£100/MWh for offshore wind. £240 for ridiculous floating schemes.
If I were David, I'd ban you from this page now. You are clearly nothing but a sealioning troll.
Can you tell me, why "AR6 has been set to ~£100/MWh" and who is in scope?
Don't hold back with real information, it is available in the press. What does the target price mean in relation to bids (strike price)? How does the bidding work? What is a price ceiling? Name commercial floating schemes.
To save myself an answer containing nothing and just deviating into nothingness I will answer this for you:
"The maximum strike price has been increased by 66% for offshore wind projects, from £44/MWh to £73/MWh, and by 52% for floating offshore wind projects, from £116/MWh to £176/MWh ahead of Allocation Round 6 (AR6) next year. "
Who is in scope? Successful bidders. Will they get the price ceiling? Very unlikely. Where have prices been in the past? Around £40/MWh.
Not one single Wh of existing schemes will benefit.
Onshore wind is for a while already largely build with own finances and marketed outwith CfDs. Same goes for solar unless very large.
Commercial floating schemes? Current count 0. These are experimental small scale schemes, mostly aimed at research. Once there is an established technology, prices are bound to reduce to commercial levels.
So you picked irrelevant things (and even exaggerated notably) to show something and I am not sure if even you know what you wanted to show.
Not one single Wh of existing schemes will benefit.
WRONG. 19% of AR4 schemes by capacity have seen their existing CFDs terminated. They can re-bid into AR6 and AR7 etc. Existing schemes can apply to reduce the capacity subject to a CFD by up to 25% and re-submit it to later rounds, as the government has confirmed. In practice, the government will be over a barrel on trying to procure capacity as their dithering will leave us short. Projects that are lined up to go will be able to re-name their price.
Onshore wind is for a while already largely build with own finances and marketed outwith CfDs. Same goes for solar unless very large.
Since the end of the ROC scheme there has been very little new onshore wind capcity built. See Energy Trends Table 6.1 for detail. What little that has been built has been dominated by CFD financed schemes.
Likewise there has been very little new solar since 2017 when the capacity started to cause problems on the grid on sunny Sundays, and the tariffs on solar export for new installations made them uneconomic. The energy crisis did result in an upsurge of domestic installations as an attempt to counter high prices. The AR5 CFD round included a lot of new solar, with every project that applied being awarded a CFD at the maximum permitted strike price. Several from AR4 and AR5 have since seen their CFD terminated because the projects failed to meet milestones.
There is nothing whatsoever 'green' about pouring 500 ton of concrete into the sea bed, jamming hundreds of tons of steel and sticking fibreglass blades attached to a motor full of thousand litres of oil, rare earth metals and killing birds and bats. Nothing.
That these monuments to folly are then paid for by crippling high energy taxes regardless of their utility is an abomination.
The ones who were really being paid were those on the DFS scheme, which was charging the rest of us up to £6,000/MWh for the privilege. It is an ideological fantasy, and a long way from the cheapest way to try to balance the grid, aside from the fact that the real volumes of adjustment were tiny in the scheme of things - and that among people who signed up for it enthusiastically.
The Triad system that applied to large industrial consumers really did work to flatten demand peaks on the grid - but the reality was the cost had to be set so high that they could justify their own generators instead. Again, it was not really a way to minimise the cost of supply, and the extra cost helped destroy many industrial enterprises which moved to more favourable energy markets.
The FCA has banned the sale of certain complex derivative trades on crypto assets to retail clients in the 2020s. In the 1990s the sale of interest rate swaps to local authorities such as Hammersmith and Fulham were found to be ultra vires. In the 2010s, UK banks paid out billions in redress to SMEs who had been mid-sold interest rate swaps on commercial loans. Yet in the energy markets of the future, consumers are expected to be energy derivative traders with tariffs that encourage price arbitrage every 30 minutes. I think Octopus should be very careful who they offer this tariff to.
Thanks - Very interesting. The more complex a system is, the harder it is to figure out just who benefits, who is taking advantage of it, and who the losers are.
Pretty much any energy tariff has complex embedded derivatives. Pay a regular amount per month on DD? You are lending money to your supplier (they rarely let you get set up so they are lending you money other than perhaps briefly towards the end of winter) and this is a part of why your DD tariff may be lower than paying quarterly in arrears. They have the option to raise the amount without paying you for the privilege of that either. Have a fixed tariff with an option to cancel and switch? That's a very complex thing to evaluate as to whether you are getting fair value. Now, my time in energy trading taught me a lot about how to attempt to value and hedge these complex derivatives. But I know that almost no-one in OFGEM even knows how to begin to do it. It's why they got so badly caught out by the energy crisis with so many companies going bust and with their theoretical hedging basis for the cap blown completely out of the water, having to be bailed out by the government.
If I build a warehouse to store potatoes, and then sell them when there is a shortage, is that wrong? I’ve invested in that infrastructure to store potatoes, and it fulfils a need in the market. Octopus and other suppliers with ‘smart’ tariffs are rewarding customers who invest in renewable technologies, or who are prepared to change their usage patterns to balance the grid and flatten out demand.
There is a difference between storing potatoes that were legitimately grown by hardworking farmers, and arbitraging energy that is subsidized by taxpayers. Also, maybe I'm missing something, because this is pretty complicated, but how are Octopus customers investing in renewables?
Thanks - this is the first I heard of the Agile Octopus. Subsidies distort markets, and the larger the subsidies, the greater the distortion and misallocation of capital. The bottom line is that consumers get to pay for all of it in higher taxes and in this case, higher electric bills.
Bombinho, you are talking utter twaddle. Pointing out the logical flaws in your writing would be pointless as you insist on making them. You deny that paying subsidy for nothing and unreliable fuels is better than a consistent, known quantity.
You argue that wind is reliable, when it isn't. Worse, you argue it is cheap. It isn't. The facts prove you wrong. The energy 'market' in hte UK works at a very simple level like this - reliable, efficient conventional fuels are heavily taxed. That tax subsidises unreliable, inefficient unreliable energy, and the bill payer pays at both ends.
Base load exists and is a known quantity. Please, educate yourself.
You may fight, argue, rant, squeal but the simple truth is if wind were a money maker then it would not need subsidy. It does, therefore it isn't. It's a scam.
Stop arguing black is white. By all means, play pretend. Take the tariff you want, but there is only so long the lie can continue.
I'm surprised there is nobody on this thread in defence of Agile, either genuine customers, or representatives of the company itself, who are seriously attempting to counter the points made by David, especially considering the pre-advertisement of this post and the stir it caused on X. All we've got is a flurry of barely intelligible and highly distracting comments from someone called Bombinho. Don't they ever shut up?
I don't think there's any inherent reason that dynamic tariffs must reduce those customers' contribution to subsidies. All else being equal, they'd contribute less off peak, and more over peak. It's just sensible to reveal the price signal to minimise inefficient overbuilding of capacity, especially as EV ownership grows. Your argument at its core seems to be an extension of an opposition to renewable subsidies? I'll have to dig more into your point about AR6 being well above the cost of gas generation. That certainly seems to break the narrative around cheap renewables at first pass, and the use of 2012 prices doesn't help make sense of things.
So when renewables are paid a fixed rate regardless of supply demand balance that’s bad, but when consumer prices reflect supply demand balance that’s bad? And presumably when we have high nuclear capacity and they are getting paid a fixed rate for their generation that will be good, and when customers are able to access cheap energy overnight from excess nuclear capacity that will be good?
Anyone interested in taking an in depth look at the Octopus Agile Tariff will find a welter of historic information by region and hourly tariff rates going back to 2017 here:
I do know it is popular with owners of oversized solar installations especially with a battery system, as it gives access to premium prices for solar export surpluses
Thank you for this great analysis! Gave my brain a bit of a workout - I found the bit about battery providers especially interesting - had never thought about that sort of profit angle to the wave of batteries required for renewable energy to work! I was wondering, more fundamentally, why do renewables need such generous subsidies to set up? And are these subsidies basically required forever? Or is there some feasible way that renewable power could stand on its own two feet at some point? Thank you very much for the analysis!
I don't think intermittent renewables could ever stand on their own two feet.
At times of maximum generation, often the market value is zero, or less. Lots of generation * zero price = zero revenue. At times of lowest generation, wholesale prices are highest, so zero generation * high price is still zero revenue.
Wind and Solar need the largely unachievable Goldilocks situation of moderate wind and sun and moderate demand. But that doesn't happen often, so in a free market, their economics would be screwed.
They only survive because they get a high and rising CfD or FiT price, or ROCs to top up their income. We pay for that inherent inefficiency. Solar might just be able to cut it with batteries at low latitudes, where the day length does not vary much. But not at Northern European latitudes.
One of the worst unintended consequences of this kind of subsidy is the effect on the steady, reliable sources of power that we need so badly. When the wholesale price drops on windy or sunny days, coal, nat gas, nuclear, all lose money and become unprofitable. If this system isn't changed, and soon, our best sources of power will start going out of business, and we'll be left with unreliable, intermittent power only - a nightmare.
Thanks. "Cliff edge" is right. We really need more nuclear power plants. SMRs are a great idea, but so far, they're still not economically feasible. The leader in the US is NuScale, based right in Portland, near my town of Sandy Oregon. I'm trying to get an interview with them and a tour to see how they're doing. They lost a proposed project in Idaho for lack of sufficient capital from investors, but I'd sure like to see them succeed.
Thanks. "Cliff edge" is right. We really need more nuclear power plants. SMRs are a great idea, but so far, they're still not economically feasible. The leader in the US is NuScale, based right in Portland, near my town of Sandy Oregon. I'm trying to get an interview with them and a tour to see how they're doing. They lost a proposed project in Idaho for lack of sufficient capital from investors, but I'd sure like to see them succeed.
Yes, we're already paying extra through the capacity market.
And for ancillary services to provide inertia, spinning reserve, frequency management etc. Some of that goes to batteries, and some to the plants they keep running for grid stability reasons.
I am afraid, the "article" is full of wrong information, conflations etc. This could not ever result in a great analysis as the author simply skipped over the part of collecting sufficient and correct information.
You will convince no one here (including genuine industry experts), by posting such opinionated, incomplete, irrelevant twaddle.
David is fundamentally correct. Octopus customers are being subsidised by everyone else - for now. It's a modern pyramid selling scheme, which 𝘄𝗶𝗹𝗹 soon come crashing down with a bang. And , along with it, any remaining socio-economic stability of the UK - just as the Long March communists always planned.
No, I think it's you (and David) that have completely the wrong end of the stick.
David has mixed energy producer schemes and end user (members of the public) schemes together with gay abandon. If Agile was the 'pyramid scheme' you assert, then it wouldn't be running six years on. David is not a 'genuine industry expert', he's a writer, that makes a convincing story by munging 'facts' together to wind up his readership because they don't know any better. The whole energy industry in the UK is far from perfect, but David's issues aren't the real problems. The fossil fuel brigade has far far bigger subsidies and tax breaks than the green generators, the vast majority of which in the last decade are building out completely unsupported by the govt.
I don't hold a candle for the oil and gas industry, but they do provide billions in taxes to the Exchequer each year. Quite the opposite of subsidies.
Renewables get much of their revenue from Government mandated subsidy schemes. ROCs cost £7bn, CfDs and FiTs an additional amount of close to £2bn each. Then there's ~£3bn of grid balancing costs each year. Plus National Grid has announced £112bn of grid expansion costs out to 2035.
You need to come on here with facts and evidence, not just lazy opinions.
Strongly held belief in a thing is like pride, it goeth before the fall. It would be helpful to all here if rather than generalizations mixed with ad hominem, you brought a cogent set of statements with data to support your position. Bombinho is in the same position. Flame throwing angst does nothing but undermine one's position. This is the basic way of argument by ideologies.
Tell us about your own "industry expertise".
Looking at your contributions I conclude that you are full of wrong information.
"are these subsidies basically required forever?"
In the US, the 'Inflation Reduction Act' (IRA) calls for the subsidies to continue until we reach "Net Zero". Since net zero is impossible, yes, the subsidies will go on forever - or until congress wakes up and revokes or at least amends the IRA.
The genius for our Representative flunkies is that they can peddle this ad infinitum because there are so few honest agency heads, academics, and experts willing to be honest with the citizenry. And of course the media itself is complicit in truth hiding because - heat death!
The Cult of the Octopus is about to be hit by a tidal wave of reality.
It will probably take two or three years yet, depending on just how barmy Milliband is once he gets hold of the reins - but yes, reality will kick in with a bang at some point.
Agile has been going for over six years already! Surely if it was such a big con, then it would have collapsed already???
If course it wouldn't. We have had growing subsidies in all manner of places in the US for decades (the last balanced budget was 25+ years ago) and there aren't uprisings over it. The citizenry is partly uninterested and partly told pretty lies by government as a matter of course. This is why no government leaders discuss the vastly increasing rate of coal uptake now and planned for by China and Indonesia to build solar panels. That wouldn't look very good.
Actually, most customers cancelled their Agile tariff during the energy crisis. It was set almost permanently at the contractual maximum for months on end - but being a special tariff it was not subject to the OFGEM cap. Those who stayed were there only to benefit from a high export tariff for solar surpluses.
The vampire squid of the industry has probably been expanding too fast - including internationally. Reminds you of the way Bulb bought business - again including international expansion.
Octopus must be subsidising this tariff from their other tariff prices otherwise they go bust. They are a retailer and exposed to the system prices and need cfds from generators to manage their risk. Unless they are being subsidised by a generator they can only balance their risk on this tariff by internally cross subsidising.
It's a gimmick the costs are like advertising. My guess is that they have calculated how many customers they can afford on this tariff, once that number gets close they will either pull the tariff or substantially change the T&C's.
Your analysis of the gaming potential of battery operators is spot on. The whole system is designed to cover up the real cost to the end customer.
You might want to look not only at the few occurrences of negative prices. During high price periods Agile customers actually can pay more than flat rate customers. Currently this can be up to £1 per kWh but prices above 30p are absolutely normal during peak hours. So Agile customers do in fact offset the low prices during high prices. Not every Agile customer has sufficient battery capacity to ride through high prices.
But all Agile customers help to adjust demand and supply so that we do not have to heat the air, sea and river like the French nuclear plants during low demand times or our former coal plants who mainly evaporated water in hundreds and thousands of tons to ride through low demand times.
It is not the case that Agile customers have negative bills. They may me able to achieve lower bills. But this was normal when we had ample of electricity suppliers and usually got achieved by changing tariff and/or supplier. Where was the outcry of Freeloaders then, when people changed to favourable tariffs?
Revealed as the cult Malthusian you are.
Well, if you feel like wanting to have all those benefits too, just join:
https://share.octopus.energy/crisp-pony-957
Remember, the article tells you that you can save fortunes. But you certainly will start with a £50 guaranteed benefit, using this link for joining.
So there we have it. You're an Octopus customer.
Of course I am. I am even an Agile customer, making sure that your price too is lower as I avoid the price penalty between 4 and 7pm for us all, which otherwise would have been packed onto your invoice too, if you were an Octopus customer. Whilst I pay the penalty myself in full if I incur the penalty. No need to thank me, my lower electricity bill is thank enough.
Tell me one supplier that is more engaged than Octopus Energy to allow their customers to help improving the energy system and benefit in return?
ON the one hand you are claiming that the high peak period charges offset negative prices, and on the other you are admitting that you avoid paying the peak prices, which means they are not offsetting your extra consumption at low prices at all.
The reality is that the Agile tariff works out very favourably for some people: for example, singles who are out until late, when they can put their wine stained shirt in the washer to run at 4 a.m. Or those with solar panels and a battery. Even if you take the simple time averaged price - reflecting reduced use during peak hours - the average price over a month typically works out to be well below the OFGEM cap price which allows for full costs including OFGEM's recommended hedging programme. Of course, the price involves no real hedging at all, since it is simply derived from day ahead prices that are paid to wind farms for most of their output, and also represent the bulk of balancing trades by other generators. Bypassing the need to hedge saves a large chunk of cost in the OFGEM cap.
You aren't going to win this argument because all that you have is language from the Octopus tract you were given when you signed on. As Sean Connery said in The Untouchables, "it's like bringing a knife to a gun fight."
Ah, a refreshingly detailed rebuttal.
At the end of the day all of the current policies being put in place are aimed at long term strategic incentives to move power companies over from gas to renewables. Creating a scenario where they can profit from increase battery storage will drive.... an increase in battery storage. This is exactly what the infrastructure needs to balance out renewables famous unpredictability.
Just like the subsidies to move people from petrol to diesel, once the aim is achieved then policy will shift and things will be rebalanced.
In the meanwhile, anyone choosing to move to Agile has the potential to reduce bills by balancing their demand to off peak periods while accepting the underlying risk of increased prices if there are large scale changes to wholesale prices.
The trouble with your theory is that battery backup is incredibly expensive to build, install, and maintain, and somebody has to pay for it. Guess who? I did a study on ESS, the leading US grid scale battery maker, in Wilsonville, Oregon. You can scroll down to the part about 'batteries for large capacity for storage' here:
https://alchristie.substack.com/p/the-folly-of-phasing-out-fossil-fuels?
The French deliberately over built nuclear capacity because they wanted to manage their demand/supply balance by exporting to the interconnected countries when they over produced for French demand. Its a good job they did as without those imports of French electricity, the UK, Belgium, Holland, Germany and Italy would have had serious problems over the years.
Unlike Nukes, and unreliable wind and solar, coal ( and gas) generation can load follow, so there has been few times of over generation from these sources. Again without this generation the grid would have collapsed without back up and their ability to provide grid support services.
No-one has answered what will happen without this sort of back up generation in the future. Batteries are only so good for a small amount of time and limited demand and are very expensive. Hydrogen is still 'pie in the sky' for practical purposes.
You cannot run a system using just 'must run' generation.
"Unlike Nukes, and unreliable wind and solar, coal ( and gas) generation can load follow"
Nukes and coal certainly cannot load follow, hence the massive curtailment of wind and solar we pay for. If only they could load follow. But the reality is that they compensate low load by dumping the thermal energy from cooling towers or into bodies of water (the reason why these often sit on the shore or on river banks).
As solar and wind are easy to reduce in output (load follow) they get turned off instead.
Allegedly as this were the cheaper option. Unfortunately this is an urban legend as we pay both anyway, whichever one we are using. We could turn down nuclear and coal, if this would be possible. But it is not. Coal modulates in days to week ranges and nuclear in months to millennia time spans. Getting our now dismantled local coal plant after an emergency stop back on the grid was around 2 weeks. Getting local solar or wind back into the grid after a shut-off can be as much as milliseconds.
Unfortunately you seem to have little understanding of how various power stations actually work.
Are you sure? Or could it be that your picture of power plants just does not fit, maybe due to limited knowledge?
But if you have something concrete where I am wrong, do not forget to mention it in your comment. I am keen to learn, if you have more to offer.
Life is too short!
You have just about got everything upside down, very 'orwellian' in fact.
I worked in the Electricity Supply Industry since 1977 until more or less retirement at increasing levels of seniority , I think my 'picture' of power stations is reasonably accurate. Bye.
Bombinho, you are confusing yourself. I suggest you read more of Mr Turver columns and learn damaging unreliables really are rather than how you want them to.
Let's have a look at your "analysis".
What is it, Octopus Energy sells, buys and where do they buy?
It is spot market electricity with a mark-up multiplier which is sold to the customers. So it gets bought on the spot market at a price. The mark-up can be low, negative, high or very high as this is the nature of a multiplier.
This means, when Agile customers buy expensive units then they contribute more (than other customers) to the results and when the buy low or even negative then they gain in comparison.
This article makes many mistakes, for example identifying the green bars as wholesale price. This is plain wrong. There is no such thing as "a wholesale price" in the first place. The green bars show one particular high trade - low turnover segment. Most electricity is neither sold nor bought on the spot market(s).
Why do we have spot markets? Certainly not to buy and sell the gros of the electricity. But to allow for a certain adjustment supply and demand. High demand, like for example when Bulb was forced to buy on the spot market, leads to (in this case permanently) high prices. More electricity is sold to the system. Lower demand than the bulk sold outside the spot market can lead to low and even negative prices. Due to the low prices it is more likely to be absorbed, demand is shifted into such times.
Hence the spot market is a certain instrument to adjust demand and supply. And it is therefore necessary for the system to run, albeit prone to abuse.
If you wanted to report on flaws of the spot market you should have concentrated, who can buy on the spot market. It is not hard to find the list of licensees. And certainly customers cannot buy there when it is cheap. Hence most customers have no incentive to adjust their usage to the supply.
But who buys really on the spot market?
Well, suppliers like Octopus do. But particular fossil fuel generators do also and in large quantities. They buy this cheap or even negative priced energy and sell it at their high contracted price back to the system. This means, they don't need to run their own generation and make a living from doing nothing. The reason wind turbine or solar generators are not bankrupt is that the receive subsidies in order to afford those low prices. This means nothing more than that their accounts are only proxies in the cash flow of the subsidies and our subsidies, paid with consumer money (from all customers, including Agile customers) and tax money, actually do fund fossil fuel who experienced windfall profits (the same ones BTW that were excluded from paying windfall taxes btw). Since particularly these fossil fuel generators can buy and sell they can even determine the prices themselves (some might call that "manipulate").
It looks like you were well meaning but totally messed up your analysis by not looking close enough. You might want to sit down and get your information a little more complete than just looking at the surface. Maybe something informative (and then even factual correct) then comes out?
I note that you have not published any posts or notes on Substack, nor have you liked anything nor any subscriptions. From reading your comment, it also appears as though English is not your first language, so I can forgive that most of what you have written is incoherent.
You seem to omit from your analysis, that the main reason prices go negative is that the output from intermittent renewables is not controllable (except by curtailment), so when supply > demand, prices go negative.
Can you explain the mechanism by which renewables generators subsidise fossil fuels.
He has a point in that short term and spot markets are not (presently) the whole story. But there are 2 issues with his poorly articulated rant:
1. Nothing about the long term forward hedging of generation output belies your analysis of the markets rigged in favour of renewables.
2. Traditionally, the aim of long term progressive hedging was to forward sell base load (which varies, of course, by season, day of week, etc.). In a "fully" renewables system, the only base load source would be a small amount of nuclear. Generation backed hedging no longer works. The wholesale market is broken, and it will end in tears.
I would prefer if we could drop the expression "base load" where it belongs, the recycle bin.
It has no justification or way of being measured in electrical circuits and is a purely imagined figure only good to justify the use of ancient generation assets, incapable of adjusting to demand and supply.
The concept is very simple. An alternative name is minimum demand, the level that must always be supplied.
You are absolutely right, English is not my first language, I might otherwise have expressed the flaws of your article in a more subtle way.
Is nuclear controllable? (You may want to have a very close look at timings of nuclear, start with "Why haven't we turned off the nuclear reactions in Chernobyl or Fukushima" or "Why are nuclear plants constructed the way they are, including basins for cooling nuclear fuel over very long periods of time?".
Is coal controllable? Compare traditional burners of coal plants as most were constructed with a few newer developments.
Gas is the only thing we really have managed to somewhat control and adjust. Mostly so because of their comparably small size.
Now to your question of how renewable generators subsidise fossil fuel.
I offer you a deal, you work for me full time without any material compensation. Since you have then no income, you will not be able to keep working for me. Hence you will be "subsidised" with tax credits to keep you going. Sounds fair?
By the way, at the same time I pay a colleague of you a nice wage for the same kind of work, which I can afford since you work for free.
And of course my account is nicely filling too.
Now please analyse this situation, have a look where the cash flows and who is subsidised in fact. Tell me in your own words what is happening here. Who is making the money? Who really benefits from the subsidy? Really you? Me? Your colleague?
Now also look how the situation would change if I were not permitted to not pay you for your contribution.
Your analysis of this situation we can then use to look closer where subsidy cash really flows to in the energy market. I am looking forward to read your analysis. Whilst this may look like a needless exercise and stringing out the conversation I think of this to offer invaluable insights. Whilst if you are struggling I can modify this with some example figures to make things more clear.
I covered the obscene profits of offshore wind farms here:
https://davidturver.substack.com/p/obscene-profits-offshore-wind-farms
And where the money goes:
https://davidturver.substack.com/p/offshore-wind-follow-the-money
It certainly doesn't go to fossil fuel generators.
That is because you have looked at the only moment when wind had been benefitting. But you turned a blind eye to all the years before and after.
You also turned a blind eye to the fact that wind and solar were almost exclusively the only ones who paid windfall taxes. Whilst gas generators had been excluded by law from paying windfall taxes and oil and gas offset it against "cost" of new exploration.
You forgot to answer the questions though. If you are paid nothing or peanuts (like wind and solar are paid almost all the time before and after the energy price crisis, which you also pointed at in your "article") and others make big bucks by selling your products at high prices (long term contracts) are you really the one that benefits, that is subsidised? Why then is the money not racking up on your accounts but on those who make money with your products?
The market value of what wind and solar produces might be worth peanuts, but what they get paid is massive. They are currently the most expensive electricity.
CfDs and FiTs are index-linked so go up every year with inflation, so the generators get paid more each year for each MWh they produce. They never receive "peanuts".
ROC-funded generators are different and they received a windfall during the energy crisis because they get awarded their certificates in addition to the market price. During the energy crisis their revenue per MWh rose in line with the price of gas-fired electricity, but has now fallen back to the top-end of pre-crisis levels. Their total revenue per MWh has never been "peanuts" and never will be.
"Can you explain the mechanism by which renewables generators subsidise fossil fuels."
As the discussion starts going in a tangent I try to make it short:
Fossil fuel generators are getting paid comfortable monies for generating, which is sold to us. But what they deliver to us is often cheap or negatively priced wind and solar energy, bought on the spot market to subsidise. We though still pay the full price.
In order for solar and wind to survive (as well outside of a temporary energy price crisis) they are getting paid peanuts (the subsidies) in order to be able to survive. This is well reflected in the stock market. In effect therefore those subsidies flow straight onto fossil fuel accounts and to a much lesser apportion lower the cost of some Agile customers (who still keep paying).
If solar and wind were paid proper market prices they would not need subsidies but then the source of cheap units, to buy and sell back to us at full price, would disappear. We would not need to prop fossil fuel purses and energy would become cheaper to all.
Agile would not offer benefits anymore to Octopus Energy customers. I am absolutely pro this move.
A little knowledge is a dangerous thing.
You are right to point out that short-term and spot markets are not the full story - as I have tried to point out many times myself in both substack articles and on TwiX: the retail price of electricity is 𝗼𝗯𝘃𝗶𝗼𝘂𝘀𝗹𝘆 not driven by the wholesale price of gas, yet so many keep repeating the myth.
But David is essentially correct in this post, and you have done nothing but cloud the issue. Other consumers are subsidising Octopus customers, while grifters like Greg Jackson and Dale Vince make fortunes.
Since you are such a smartarse, why don't you write a detailed article of your own? Here's an example you could look at, if you actually want to understand the situation in detail, and then make a useful contribution to the debate.
https://johnsullivan.substack.com/p/uk-energy-consumption-and-electricity
Especially if you are familiar with operational details of the current wholesale Markets, many people (including possibly David and other commentators) might benefit from a detailed analysis of the relative contributions of long term hedged positions v. short term - front week, day-ahead and in-day fine tuning.
Then, perhaps, you could explain how the growing proportion of renewables screws up hedging strategies and - as you rightly infer - means that wholesale market positions rely more on trading shenanigans than actual generation. Of course, actual generation is ultimately needed, so the entire house of cards will eventually come crashing down one day - probably quite soon (next two or three years in the UK once the Milliband idiot has done his worst).
"But particular fossil fuel generators do also and in large quantities. They buy this cheap or even negative priced energy and sell it at their high contracted price back to the system."
And when these fossil fuel generators have massive short positions not backed by generation (for example because they haven't bought forward any gas to run their plant), and there is no wind?
What then, genius? How do they fulfill their contracts?
If they 𝗵𝗮𝘃𝗲 bought the gas, and they fulfill their commitments by buying on the spot markets rather than generating, what happens to the gas?
You have a poor understanding of electricity markets in GB. The bulk of electricity sales are priced off day ahead prices, which is the basis for the Agile tariff. The reason this is so is that renewables generation is uncertain until weather forecasts are sufficiently accurate to reduce the risks of failure to generate contracted sales volumes. If a wind farm sells ahead more than it produces it will be billed for the cost of the shortfall at balancing market prices, which can be very high when there is a general shortage of generation. For a wind farm selling ahead at fixed futures prices is not really hedging: it is speculating that the weather will allow them to meet the contracted sale.
Framework PPAs do exist of course - guaranteeing to take all the output whenever it occurs. But if they are not priced on the day ahead basis they will be priced at a significant discount to electricity futures prices to reflect the performance risk.
"The bulk of electricity sales are priced off day ahead prices"
Last time I looked at the statistics, over 60% of the energy in the UK were sold long term contract up to two years in advance. That was before CfDs, PPAs etc.
Whilst the spot market itself is a high turnover low volume market, meaning many sales but the same energy just changes hands several times.
But maybe you have some reliable sources that tell otherwise?
"For a wind farm selling ahead at fixed futures prices is not really hedging"
Why should it be? The available power could be sold in a similar way as if the buyer would install their own wind and/or solar generation. No hedging but reduction of grid/transmission load.
The buyer gets units at a comparably low price when these are available and has to buy less from their alternative provider at higher prices.
The seller has a guaranteed take off and does not need to worry about negative prices.
Most CFDs are priced off day ahead prices. (Exceptions for baseload technologies). It would be crazy to open up an exposure between the CFD pricing basis and the basis of sale. The rest of intermittent renewables cannot afford the risks of fixed price sales and then being unable to supply from own production: that would be a quick route to bankruptcy. So essentially, Drax and Lynemouth aside, all renewables are PRICED on a prompt basis. That doesn't mean that they don't have framework sales in place with a particular counterparty where they nominate the volume, perhaps some of it even as late as just before gate closure via a CC on an FPN.
As I have explained, the forward hedging market dried up in the energy crisis, and it has not regained its health. You can see this easily by looking at a longer term chart of trading volume and open interest for NBP gas futures which underpin electricity hedging markets. Both fell as the energy crisis gathered pace, and the costs of initial margins and mark-to-market maintenance margins became prohibitive. The trade has roughly halved. Probably just as well, because we have to pay the cost of hedging in our bills, even if you as an Agile customer evade them.
Could it be possible the the shift away from long term sales was not by accident. As you said, renewables are locked in on the spot market. Therefore such shift would be inevitable with increasing penetration and only will continue and soon enough spot market sales are trading the gros of the volume.
Unless of course new trading instruments allow a shift.
The current rigid structure of the energy market with fixation on hedging ignores partially simple mathematical principles. Do you ever have tried to sample random data for statistical purposes? If so you might not have been able to avoid to gather that random means statistically equal distribution and random is only the ripple.
I guess, you are pointing me in the right direction, some business tactics might no be so successful long term.
You also do not understand that the reason why fossil fuel generators trade in the day ahead markets is that they have typically provided hedge sales to retailers that wind farms cannot make. Retailers are effectively commanded by OFGEM to hedge future supplies, and the only possible sources for that are dispatchable generators who can more or less guarantee that they will be able to supply the contracts they enter into.
However, in very volatile markets the risk of a breakdown and eye watering costs to buy back hedge sales substantially reduced the volume of hedge sales by such generators during the energy crisis: other costs include financing mark to market and performance bond margins, which made hedge sales into speculation on working capital funding.
For generators with a high fuel cost they would typically buy fuel futures at the same time as selling the power the fuel can produce, locking in a margin. Drax operates similarly on its ROC subsidised units, selling hedges only when they offer an adequate margin against wood pellet costs. Nuclear power will have a predetermined low fuel cost, and in normal markets is more interested in avoiding low price spot sales in conditions of renewables oversupply. When it comes to the day ahead market nuclear will be almost absent unless they are forced into buying back volumes sold previously because of a plant problem. However, renewables will be seeking to ensure that they earn maximum subsidy by making firm sales ahead of time, since if they leave it until the balancing mechanism the price will not be pretty.
If the renewables forecast volume exceeds forecast demand less previous sales by other generators then to avoid curtailment and loss of subsidy they will have to persuade other generators (perhaps including ones at the other end of an interconnector) to reduce their planned generation. If a fuelled generator is to cut back production then it will end up with surplus fuel - and particularly where this is gas they will need to sell the gas they had previously bought: ensuring that they do not lose out in doing this will set the price at which they are prepared to buy in renewables generation to meet their contracted sales. In this case the renewables generator get to produce via a chain sale to the CCGT plant which had already sold to the retailer who had committed to supply the end user.
Once the maximum acceptable amount of dispatchable generation has been backed out the remaining bunfight is between renewables generators, often with added complications from grid transmission constraints if there is a wider surplus. The way the market operates is to find the cheapest to curtail, leaving the most expensive generation with the bigger subsidies still generating. This will produce negative prices, since revenues are still positive at any negative price lower in magnitude than the subsidy.
With the exception of those CFD contracts that cease to pay out when prices go negative for an hour or six, all renewables generation continues to get its subsidies.
The Long and the short of it is that the electricity markets (wholesale and retail) are rigged, exactly in the manner you describe.
The UK has zero chance of reaching Net Zero by 2050, or 2100 for that matter, but we could spend £2.5 Trillion enriching grifters like Greg Jackson, Chris Packam and Dale Vince in the meantime. The real joke of it is, it's the gullible useful idiot leftards who are facilitating this capitalist scumbag scam, because they've been signed up to the cult of a non-existent climate emergency.
#WarOnMorons
Not strictly on-topic, but...
I have often wondered about the fraud that is 'renewable only' electricity contracts for consumers.
We know that at times such as cold calm winter nights the total 'renewables' supply to our grid is close to zero. (Not actually zero as some wood burning generators are classed as renewable). In these circumstances does the totality of demand from 'renewables only ' supply contracts exceed the supply? If it does, surely such virtuous customers should be being cut off by meams of their oh-so-wonderful smart meters until the supply improves. I don't have any data about the renewables only supply contracts or demand to make even an educated guess, but it would be really interesting. I suspect that there has been a lot of overselling.
More on-topic, I'm increasingly alarmed by the use of time-of-day or surge pricing. The people who will suffer most are poorer families with small children, who will inevitably need to use electricity when it's most expensive. Not everyone can afford or would want the latest expensive whizz-bang gear that checks the prices over the internet and only heats your hot water when the prices are at their lowest. Yes, the suppliers do still offer single rate tariffs, but the pressure is there to get us all on 'smart' meters and variable tariffs. This effectively shifts costs from the supplier to some (the least 'agile', i.e. the least well off) of their customers , and amounts to an unpleasantly regressive policy.
I'm considering an article on that very topic. The suppliers have mealy mouthed footnotes to their advertising, explaining they buy REGOs and/or ROCs to cover the times when the the wind is not blowing and the sun is not shining. As if spending money on pieces of paper makes the emissions vanish. It's a scam.
On the surge pricing, yes you're right, those least able to switch their consumption patterns will be hardest hit by surge pricing.
Have a look at energy monitoring pages. Then show me one day, or even one (half) hour where wind and solar had been zero. You will actually be surprised how much energy still comes from wind and solar. You might have a stab at https://wind-curtailment-app-ahq7fucdyq-lz.a.run.app/ giving very detailed historic information for the last years.
But you also can look at https://www.gridwatch.templar.co.uk/ or https://grid.iamkate.com/ and other sites.
Whilst solar goes zero at night time it is amazingly reliable during daytime, offering a lot of potential if scaled up.
You can do this for yourself. Look at January. Is there a point when reality actually intrudes on your ideology?
The reality is that your power supply will depend on which generators you are close to and what they are producing. Live in Northern Scotland, and your power will be mainly wind and hydro, sometimes supplemented by gas from Peterhead and nuclear from Torness and Hunterston when it's not windy. Live in Ashford, Kent and your supply is likely a mix of French and Belgian imports much of the time. You can get an idea of how the power flows mix here:
https://www.carbonintensity.org.uk/
Look at the Regional section: the map is clickable, and you can toggle the display of power flows between regions.
The question of what gets turned up if you turn on your oven is perhaps more complex: perhaps a battery reduces its rate of charge, or perhaps your region reduces its exports to its neighbours so that the actual generator with the flexibility to increase output may be a considerable distance away, with the power flows across the grid rebalancing. Your supply will not then come from the generator that increased output at all. Generators with flexibility tend to be gas or hydro (including pumped storage), although you might see a curtailed wind farm start up again if you are nearby, though such events are quite rare.
Everybody gets the same electricity from the same sources, whether they buy renewable electricity or not.
Everybody gets the same sources as their neighbours, regardless of what they think they are buying. But not everybody gets the same sources if they are in different parts of the country. If you live in part of the country with a supply surplus (e.g. windy Northern Scotland there is no way your supply will include anything from the interconnectors to France, or even Drax and RATS coal fired station and Pembroke CCGT.
So Octopus Agile users are being paid to help balance the grid.
Green energy generation is being encouraged.
Large scale energy storage is being encouraged.
Eventually, there will be enough grid level storage and demand-side control to smooth out the price fluctuations throughout the day and hourly price differences wont be so great and even non-octopus-agile customers benefit.
Seems like the system is working well.
Seems like you have absolutely no idea what you are talking about.
If I were you, I'd delete that absolute drivel before you are seriously humiliated.
Ah, the old deflection drivel, from a neo-Marxist clown.
So, presumably. You agree with the baseless, moronic comment about "enough grid level storage"? Please elaborate, and you too can be exposed as yhe clown you are.
Bombinho, is your real name Richard Head?
If it isn't, perhaps you should consider changing it.
Expensive intermittent renewables are being encouraged. The extra expense of large-scale storage is being encouraged, which can only add to system costs. And our electricity costs are already among the most expensive in the developed world.
If you think this fits the definition of "working well", I have a bridge to sell you.
David, you are saying that the currently often below 4p/kWh offered to windfarms are expensive whilst the10p+/kWh for gas (etc) generation are cheap?
"The currently often below 4p/kWh (£40/MWh) offered to windfarms"
Are you really as ignorant as you seem? "Offered" by whom? AR6 strike prices have been set at ~£100/MWh for offshore wind. £240 for ridiculous floating schemes.
If I were David, I'd ban you from this page now. You are clearly nothing but a sealioning troll.
Can you tell me, why "AR6 has been set to ~£100/MWh" and who is in scope?
Don't hold back with real information, it is available in the press. What does the target price mean in relation to bids (strike price)? How does the bidding work? What is a price ceiling? Name commercial floating schemes.
To save myself an answer containing nothing and just deviating into nothingness I will answer this for you:
AR6 price ceiling is a maximum price, nothing above will be accepted. Why has it been raised? https://www.offshorewind.biz/2023/09/08/offshore-wind-developers-take-a-pass-on-uks-fifth-cfd-round-as-maximum-bid-price-was-too-low/ Because nobody could still afford to build off-shore wind at the attempted price ceiling.
Just to cite gov.uk:
"The maximum strike price has been increased by 66% for offshore wind projects, from £44/MWh to £73/MWh, and by 52% for floating offshore wind projects, from £116/MWh to £176/MWh ahead of Allocation Round 6 (AR6) next year. "
The whole comment is here:
https://www.gov.uk/government/news/boost-for-offshore-wind-as-government-raises-maximum-prices-in-renewable-energy-auction
Who is in scope? Successful bidders. Will they get the price ceiling? Very unlikely. Where have prices been in the past? Around £40/MWh.
Not one single Wh of existing schemes will benefit.
Onshore wind is for a while already largely build with own finances and marketed outwith CfDs. Same goes for solar unless very large.
Commercial floating schemes? Current count 0. These are experimental small scale schemes, mostly aimed at research. Once there is an established technology, prices are bound to reduce to commercial levels.
So you picked irrelevant things (and even exaggerated notably) to show something and I am not sure if even you know what you wanted to show.
Not one single Wh of existing schemes will benefit.
WRONG. 19% of AR4 schemes by capacity have seen their existing CFDs terminated. They can re-bid into AR6 and AR7 etc. Existing schemes can apply to reduce the capacity subject to a CFD by up to 25% and re-submit it to later rounds, as the government has confirmed. In practice, the government will be over a barrel on trying to procure capacity as their dithering will leave us short. Projects that are lined up to go will be able to re-name their price.
Cluelless, sealioning tit. Finally blocked.
Onshore wind is for a while already largely build with own finances and marketed outwith CfDs. Same goes for solar unless very large.
Since the end of the ROC scheme there has been very little new onshore wind capcity built. See Energy Trends Table 6.1 for detail. What little that has been built has been dominated by CFD financed schemes.
Likewise there has been very little new solar since 2017 when the capacity started to cause problems on the grid on sunny Sundays, and the tariffs on solar export for new installations made them uneconomic. The energy crisis did result in an upsurge of domestic installations as an attempt to counter high prices. The AR5 CFD round included a lot of new solar, with every project that applied being awarded a CFD at the maximum permitted strike price. Several from AR4 and AR5 have since seen their CFD terminated because the projects failed to meet milestones.
There is nothing whatsoever 'green' about pouring 500 ton of concrete into the sea bed, jamming hundreds of tons of steel and sticking fibreglass blades attached to a motor full of thousand litres of oil, rare earth metals and killing birds and bats. Nothing.
That these monuments to folly are then paid for by crippling high energy taxes regardless of their utility is an abomination.
The ones who were really being paid were those on the DFS scheme, which was charging the rest of us up to £6,000/MWh for the privilege. It is an ideological fantasy, and a long way from the cheapest way to try to balance the grid, aside from the fact that the real volumes of adjustment were tiny in the scheme of things - and that among people who signed up for it enthusiastically.
The Triad system that applied to large industrial consumers really did work to flatten demand peaks on the grid - but the reality was the cost had to be set so high that they could justify their own generators instead. Again, it was not really a way to minimise the cost of supply, and the extra cost helped destroy many industrial enterprises which moved to more favourable energy markets.
The FCA has banned the sale of certain complex derivative trades on crypto assets to retail clients in the 2020s. In the 1990s the sale of interest rate swaps to local authorities such as Hammersmith and Fulham were found to be ultra vires. In the 2010s, UK banks paid out billions in redress to SMEs who had been mid-sold interest rate swaps on commercial loans. Yet in the energy markets of the future, consumers are expected to be energy derivative traders with tariffs that encourage price arbitrage every 30 minutes. I think Octopus should be very careful who they offer this tariff to.
Thanks - Very interesting. The more complex a system is, the harder it is to figure out just who benefits, who is taking advantage of it, and who the losers are.
Pretty much any energy tariff has complex embedded derivatives. Pay a regular amount per month on DD? You are lending money to your supplier (they rarely let you get set up so they are lending you money other than perhaps briefly towards the end of winter) and this is a part of why your DD tariff may be lower than paying quarterly in arrears. They have the option to raise the amount without paying you for the privilege of that either. Have a fixed tariff with an option to cancel and switch? That's a very complex thing to evaluate as to whether you are getting fair value. Now, my time in energy trading taught me a lot about how to attempt to value and hedge these complex derivatives. But I know that almost no-one in OFGEM even knows how to begin to do it. It's why they got so badly caught out by the energy crisis with so many companies going bust and with their theoretical hedging basis for the cap blown completely out of the water, having to be bailed out by the government.
If I build a warehouse to store potatoes, and then sell them when there is a shortage, is that wrong? I’ve invested in that infrastructure to store potatoes, and it fulfils a need in the market. Octopus and other suppliers with ‘smart’ tariffs are rewarding customers who invest in renewable technologies, or who are prepared to change their usage patterns to balance the grid and flatten out demand.
There is a difference between storing potatoes that were legitimately grown by hardworking farmers, and arbitraging energy that is subsidized by taxpayers. Also, maybe I'm missing something, because this is pretty complicated, but how are Octopus customers investing in renewables?
Thanks - this is the first I heard of the Agile Octopus. Subsidies distort markets, and the larger the subsidies, the greater the distortion and misallocation of capital. The bottom line is that consumers get to pay for all of it in higher taxes and in this case, higher electric bills.
Bombinho, you are talking utter twaddle. Pointing out the logical flaws in your writing would be pointless as you insist on making them. You deny that paying subsidy for nothing and unreliable fuels is better than a consistent, known quantity.
You argue that wind is reliable, when it isn't. Worse, you argue it is cheap. It isn't. The facts prove you wrong. The energy 'market' in hte UK works at a very simple level like this - reliable, efficient conventional fuels are heavily taxed. That tax subsidises unreliable, inefficient unreliable energy, and the bill payer pays at both ends.
Base load exists and is a known quantity. Please, educate yourself.
You may fight, argue, rant, squeal but the simple truth is if wind were a money maker then it would not need subsidy. It does, therefore it isn't. It's a scam.
Stop arguing black is white. By all means, play pretend. Take the tariff you want, but there is only so long the lie can continue.
I'm surprised there is nobody on this thread in defence of Agile, either genuine customers, or representatives of the company itself, who are seriously attempting to counter the points made by David, especially considering the pre-advertisement of this post and the stir it caused on X. All we've got is a flurry of barely intelligible and highly distracting comments from someone called Bombinho. Don't they ever shut up?
I have offered the Octopus chap who contacted me a right of reply. No answer yet, but it is Sunday.
Win win for Octopus. If you're wrong and they are right, they have the opportunity to publicly set the record straight and promote their business.
Free lunch and free electricity are free of being free. The exaggerations of wind, solar, and batteries are in the quadrillions by now.
I don't think there's any inherent reason that dynamic tariffs must reduce those customers' contribution to subsidies. All else being equal, they'd contribute less off peak, and more over peak. It's just sensible to reveal the price signal to minimise inefficient overbuilding of capacity, especially as EV ownership grows. Your argument at its core seems to be an extension of an opposition to renewable subsidies? I'll have to dig more into your point about AR6 being well above the cost of gas generation. That certainly seems to break the narrative around cheap renewables at first pass, and the use of 2012 prices doesn't help make sense of things.
"I'll have to dig more into your point about AR6 being well above the cost of gas generation."
See here, section 3.
https://johnsullivan.substack.com/p/uk-energy-consumption-and-electricity
Try this:
https://davidturver.substack.com/p/ar6-budget-to-increase-energy-bills-by-billion
So when renewables are paid a fixed rate regardless of supply demand balance that’s bad, but when consumer prices reflect supply demand balance that’s bad? And presumably when we have high nuclear capacity and they are getting paid a fixed rate for their generation that will be good, and when customers are able to access cheap energy overnight from excess nuclear capacity that will be good?
Anyone interested in taking an in depth look at the Octopus Agile Tariff will find a welter of historic information by region and hourly tariff rates going back to 2017 here:
https://agileprices.co.uk/
I do know it is popular with owners of oversized solar installations especially with a battery system, as it gives access to premium prices for solar export surpluses
https://octopus.energy/smart/outgoing/
Not quite as lucrative as an old FiT, but another way to grind money out of those who don't fit the template to subsidise those who do.