From NOT A LOT OF PEOPLE KNOW THAT
By Paul Homewood
h/t Philip Bratby
I was going to write about this, but Ross Clark has beaten me to it!
What remarkable power climate change has to turn the usual rules of fairness on their head. The poor pay the taxes and the wealthy get subsidised. It has happened with electric cars, where well-off early adopters were handed grants of £4,000 to buy a new vehicle – as well as being excused fuel duty and road tax, essentially freeing them from having to make any contribution to the upkeep of roads. It has happened with heat pumps – whose owners have enjoyed years of subsidies, the latest manifestation of which is £7,500 in upfront grants.
Surge pricing is a desperate solution to manage demand rather than maintain supply
The next phase will be even more painful for the poor and even more rewarding for the wealthy. The Department for Energy Security and Net Zero has put forward proposals to equip smart meters and electric appliances with technology to allow Uber-style surge pricing for electricity, where the price of power will vary on a half-hourly basis. Under the new system, there would be little warning of when prices would change, unlike the Economy 7 tariff, which has been around for decades and offers consumers cheaper electricity at night.
The reason for the new system is the intermittency of wind and solar, which the government and the green energy industry in general have failed to solve. Technologies for storing energy remain horribly expensive, or they have not yet even been proven on a commercial scale. Surge pricing is a desperate solution to manage demand rather than maintain supply. How much will prices have to vary in order to persuade people to turn off appliances when little wind and solar energy is being produced? It would require hugely punitive tariffs. This is the scale of the problem: Britain already has enough wind and solar capacity – theoretically – to meet Britain average power demand of 37 gigawatts. But in some weather conditions – namely calm winter evenings – that can fall away to less than one gigawatt.
Ross hits the nail on the head.
Fiddling around with peak prices won’t make the slightest bit of difference to peak demand. People are not going to rearrange their lives to save a few pence here and there.
To cut demand, prices will need to be punitive.
Moreover, we are not talking about the sort of variable tariffs currently on the market, such as Octopus Agile which offer variable prices for prearranged times of day.
Surge pricing can change every half hour, so very few people will even be aware prices are changing, never mind being able to do anything about it.
We are likely to end up in a situation where people automatically switch all appliances off whenever there is the slightest risk of price hikes.
The days of cheap, reliable energy are over.
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