[News] The Energy crisis

[Neville's Breakfast]

We all consume these markets and it isn't going very well.

Yes, we do. It is important though to distinguish between the day ahead physical market used for balancing the system and the forward market from which we get our bills. It is also important to understand the influence of energy policy particularly with regard to the shift to renewable energy and phasing out of coal. Politics across the continent and increased global demand are the drivers of what we are seeing at the moment. This is a financial and physical market global issue rather than a local constitutional one.

 

[Neville's Breakfast]

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One stand out country

Again, you are misusing data because you don’t understand the day ahead market. This is the manner in which the Brexit debate was conducted and why I became sick of it.

 

[PILTDOWN MAN]

well Kegged bitter can do one. Guinness uses nitrogen doesnt it (not sure on source), cider and real beer are better with their natural CO2.

Guinness uses a mix

 

[WATFORD zero]

Again, you are misusing data because you don’t understand the day ahead market. This is the manner in which the Brexit debate was conducted and why I became sick of it.

And once again, you bring up and attempt to put down the Brexit debate on yet another Main Board thread. The invitation to you to come over to the Brexit thread and debate the implications of Brexit in a mature manner is open as always.

I would be genuinely interested to hear one of the most lucid Brexit supporters views on the unimplementable Northern Ireland Protocol, the complete lack of any import controls whatsoever, the loss of financial services business to the rest of the world, the impact on fishing, farming, food preparation, supply chains, care homes, etc etc. Maybe discuss some proposed solutions to these ongoing problems?

It really isn’t. I trade these markets but I can see the desire to continue a six year old debate is just too tempting for some, so never mind the facts.

The 'debate' may well have been over 6 years ago, but the effects only began 9 months ago and are increasing day by day (and obviously will only increase until solutions are found). Maybe you could offer some idea of solutions to the above, over on the Brexit thread.

It would be good to get some reasonable debate and to hear your views on the consequences and how to go forward. It would certainly stop anyone mistaking 'being sick of it' for 'running away from the consequences'

See you over on the Brexit thread and let this one get back on topic

 

[Lenny Rider]

One of Maggie's biggest gaffe's, selling off the utilities.

Is Nationalisation still an option or have we gone past that?

Although even before that the first thing BJ could do is rescind the £20 policy on Universal Credit.

 

[Harry Wilson's tackle]

This is just another thing that is not solely down to brexit but brexit has clearly made it worse. Just because other factors are involved (as they are with driver shortages and goods held up) it doesn’t mean that brexit is irrelevant. Brexit has made us like an over handicapped horse in a jump race. Yes we could still do okay but it is being made much harder.

Very well put

 

[Harry Wilson's tackle]

One of Maggie's biggest gaffe's, selling off the utilities.

Is Nationalisation still an option or have we gone past that?

Although even before that the first thing BJ could do is rescind the £20 policy on Universal Credit.

Well, it wasn't a gaffe for those who bought the initial share floatations at knock down prices (all legitimately voted for, albeit this was not in the 79 manifesto).

I agree that nationalization of certain sectors now, with an influx of modern work practices, may work, but it will take a great deal of persuasion to stop older folk thinking that the days of having to buy a one size fits all piece of crap from the Gas Showroom and wait 3 months for their phone line to be connected would be over. And let's not mention nationwide Industrial Action driven by Union Barons, and the three day week.

The main problem would be the costs, of course. The nation can't simply pinch the utilities back, even though I sometimes fantasize about this, particularly when standing on a crowded train having paid ten times the ticket price of 20 years ago.

 

[Neville's Breakfast]

And once again, you bring up and attempt to put down the Brexit debate on yet another Main Board thread. The invitation to you to come over to the Brexit thread and debate the implications of Brexit in a mature manner is open as always.

I would be genuinely interested to hear one of the most lucid Brexit supporters views on the unimplementable Northern Ireland Protocol, the complete lack of any import controls whatsoever, the loss of financial services business to the rest of the world, the impact on fishing, farming, food preparation, supply chains, care homes, etc etc. Maybe discuss some proposed solutions to these ongoing problems?

The 'debate' may well have been over 6 years ago, but the effects only began 9 months ago and are increasing day by day (and obviously will only increase until solutions are found). Maybe you could offer some idea of solutions to the above, over on the Brexit thread.

It would be good to get some reasonable debate and to hear your views on the consequences and how to go forward. It would certainly stop anyone mistaking 'being sick of it' for 'running away from the consequences'

See you over on the Brexit thread and let this one get back on topic

You have misread the thread. There were multiple uninformed references to causation between leaving the EU and the current energy market situation on the first few pages of this thread. My post was in direct response to a couple more in posts 38 and 54. As I was responding I was clearly not ‘bringing it up.’ I take a direct interest in energy pricing and policy so I have been pointing out the actual dynamics of these markets. As to debating Brexit, as always the answer is no, thank you.

 

[Berty23]

This sums up numerous factors and yes brexit is high on the list.

https://bylinetimes.com/2021/09/20/...s-johnson-broke-his-promise-on-energy-prices/

 

[nicko31]

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One stand out country

Maybe 0.3l of schadenfreude pilsner on this occasion, rather than full 0.5l glass

Brexit is pouring oil on troubled waters again.

Britain had its chance to get out of Brexit and think again, instead it elected the Vote Leave government. C'est la vie.

 

[Wozza]

Project Fear again! Tsk!

 

[CheeseRolls]

Yes, we do. It is important though to distinguish between the day ahead physical market used for balancing the system and the forward market from which we get our bills. It is also important to understand the influence of energy policy particularly with regard to the shift to renewable energy and phasing out of coal. Politics across the continent and increased global demand are the drivers of what we are seeing at the moment. This is a financial and physical market global issue rather than a local constitutional one.

At no point have I dismissed any of these points. You however are very quick to dismiss the possibility that Brexit is a contributory factor.
I am though a little confused at the lack of any relationship between the forward market and the day ahead market. It seems to me as a casual observer that the spiky nature of short term pricing is discouraging some suppliers from committing capacity to the market, preferring instead to pick up lucrative short term capacity. Does this not then force up the price on the forward market? and has this volatility not been increased by inflexible trading relationships with our near neighbours?

Just for clarification in my mind this is much more about the execution of Brexit than the political decision.

 

[beorhthelm]

Just for clarification in my mind this is much more about the execution of Brexit than the political decision.

its neither. we get about 6% gas from EU, while exporting several times more back. is about the market price.

nevermind, the story has been set this is a brexit issue, despite the entire world dealing with doubling of natural gas prices in the year.

 

[Neville's Breakfast]

At no point have I dismissed any of these points. You however are very quick to dismiss the possibility that Brexit is a contributory factor.
I am though a little confused at the lack of any relationship between the forward market and the day ahead market. It seems to me as a casual observer that the spiky nature of short term pricing is discouraging some suppliers from committing capacity to the market, preferring instead to pick up lucrative short term capacity. Does this not then force up the price on the forward market? and has this volatility not been increased by inflexible trading relationships with our near neighbours?

Just for clarification in my mind this is much more about the execution of Brexit than the political decision.

Day ahead prices have always been considerably more volatile than forward pricing. So much so that an entirely different type of mathematical modeling has to be used when pricing its derivatives. Day ahead prices are effectively a balancing auction and heavily influenced by the amount of demand coming into the grid on that day and the cost and type of electricity needed to satisfy that demand eg on a low demand day it may be possible to satisfy it mainly with renewables which are the cheapest source but finite. Day ahead prices can and have been negative. On a high demand day in a situation like now where massive excess gas demand has a knock on effect in creating a switch to coal we see coal fired capacity having a more significant role in satisfying demand and this is a lot more expensive because of the need to buy carbon permits. The forward electricity market by contrast reflects quantity of financial market hedging, forecast long term demand and the generating capacity intended to satisfy that demand. It is usually a lot less volatile. This year though forward power prices have rocketed because of supply problems in the global gas market and insufficient gas storage in the EU to satisfy forecast demand. Add into this the rapid phasing out of coal and lack of enthusiasm for nuclear and the continent has problems. Germany in particular has a problem that will get bigger because of its success in moving from coal to renewables. Unfortunately the stark reality is it does not have enough generating capacity and since European power markets are led by the liquid German market this contributes to this years price spike.
The direct answer to your questions is to remember that electricity cannot be stored (unless in batteries). The forward market is not a separate source of supply so there is no trade off between day ahead and forward power. As to inflexible trading relationships I would dispute that these are relevant to the move up in forward power and this is what drives the wholesale and therefore the retail market.

 

[WATFORD zero]

You have misread the thread. There were multiple uninformed references to causation between leaving the EU and the current energy market situation on the first few pages of this thread. My post was in direct response to a couple more in posts 38 and 54. As I was responding I was clearly not ‘bringing it up.’ I take a direct interest in energy pricing and policy so I have been pointing out the actual dynamics of these markets. As to debating Brexit, as always the answer is no, thank you.

I am sorry, the script simply highlighted that you had used the term 'Brexit' on the main board again

I guess I then let my frustration at not being able to find any coherent, eloquent Brexiteer willing to take responsibility and discuss how to overcome all the issues raised. I thought you may be the one willing to discuss how to move forwards but as you have pointed out before, you don't believe you can. Again, my sincere apologies.

And back on topic, hopefully the posts since then relating to the effect of Brexit on Energy supply have been less 'uninformed'

 

[Neville's Breakfast]

Project Fear again! Tsk!

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And if that were an English politician or businessman saying the same in reverse he would be called a ‘little Englander.’ There would be consequences of such action which is why we tend not to see such behaviour between allies. The geopolitical risk of this situation has been excacerbated by the EU’s over reliance on Russian gas. That is the problem we will likely be trying to tackle together.

 

[Berty23]

And if that were an English politician or businessman saying the same in reverse he would be called a ‘little Englander.’ There would be consequences of such action which is why we tend not to see such behaviour between allies. The geopolitical risk of this situation has been excacerbated by the EU’s over reliance on Russian gas. That is the problem we will likely be trying to tackle together.

Wasn’t this always likely to happen? When you are the weaker party you take what you are given and deal with it. The big truck was people thinking we held the strong hand. We are now hoping to get involved with planning rather than being in the room by default. It is genuinely bizarre that some people seem to believe that after voting to be an outsider we would not be treated like an outsider.

 

[Neville's Breakfast]

I am sorry, the script simply highlighted that you had used the term 'Brexit' on the main board again

I guess I then let my frustration at not being able to find any coherent, eloquent Brexiteer willing to take responsibility and discuss how to overcome all the issues raised. I thought you may be the one willing to discuss how to move forwards but as you have pointed out before, you don't believe you can. Again, my sincere apologies.

And back on topic, hopefully the posts since then relating to the effect of Brexit on Energy supply have been less 'uninformed'

You have a script that alerts you to mentions of the word Brexit ?
Wouldn’t it be healthier to set it to ‘Dunk’ or ‘Lamptey’ instead ? On a serious note I just don’t want to go round and round in circles arguing about the constitution. There are pros and cons to each view and I don’t feel the need to be ‘right’ or ‘prove’ anyone else ‘wrong.’ I am though interested in energy pricing hence I am on this thread.

 

[WATFORD zero]

You have a script that alerts you to mentions of the word Brexit ?
Wouldn’t it be healthier to set it to ‘Dunk’ or ‘Lamptey’ instead ? On a serious note I just don’t want to go round and round in circles arguing about the constitution. There are pros and cons to each view and I don’t feel the need to be ‘right’ or ‘prove’ anyone else ‘wrong.’ I am though interested in energy pricing hence I am on this thread.

So I gathered

 

[Neville's Breakfast]

Wasn’t this always likely to happen? When you are the weaker party you take what you are given and deal with it. The big truck was people thinking we held the strong hand. We are now hoping to get involved with planning rather than being in the room by default. It is genuinely bizarre that some people seem to believe that after voting to be an outsider we would not be treated like an outsider.

It hasn’t happened. Argument about whether we think it might or might not happen tends to divide along pro or anti membership lines and is ultimately pointless. You think it’s likely because someone has said it and it conforms to your view. Someone else thinks the opposite. And there we have the thread that cannot be named (particularly now I know mention of it triggers a script ).