UK electricity prices could double due to EU court ruling 

Posted: November 18, 2018 by oldbrew in Energy, government, Legal
Tags: , ,

Carrington Power Station near Manchester


The sooner Britain gets the interfering EU off its regulatory back the better. With already questionable policies on power generation due to climate obsessions, this aggravation is the last thing needed.

Electricity prices could double after the government suspended the UK’s system for ensuring there is a back-up power supply, experts have warned.

The wholesale power price could hit £121 per megawatt hour (MWh) by next winter unless the so-called capacity market is reinstated, according to a report — risking higher energy bills for millions, reports The Sunday Times.

The government suspended the capacity market on Thursday after the European Court of Justice (ECJ) found it breached state-aid rules.

Under the mechanism, which had originally been cleared by the European Commission, power stations are subsidised to be on standby to provide extra electricity for the UK’s main network immediately, if needed.

Some businesses are also paid to be ready to reduce their energy use when needed. However, payments and auctions have now been suspended while the government tries to find a way to re-establish the scheme.

If no solution is found, projects could be pulled as they might no longer be economically viable, and prices could be pushed up by limits on supply. Prices on future electricity contracts leapt by an average of £1.40 per MWh on the day after the announcement, experts said. […]

The ECJ ruling has thrown the energy market into disarray, with many projects relying on the scheme.

Continued here.

  1. Adam Gallon says:

    May’s Withdrawal Agreement, locks us into the EU’s climate & energy laws.

  2. Graeme No.3 says:

    Advice to politicians.
    Get out of the EU a.s.a.p.
    Dump the Climate Act and all subsidies for renewables. (the Greenies claim they are cheapest so an unnecessary expense)
    Demand the cheapest reliable supply of electricity.
    Listen to the cheers from the grateful public and the boost in industry.

  3. Agree with Graeme -how could anyone think UK could be better off by living under rules, laws and judges made by unelected officials in an EU run by countries which are antagonistic to Britain.
    Complete Brexit with no ties the EU must happen. Europe needs trade with the UK much more than UK needs the EU. Make separate trade deals with Australia, USA, Canada, Norway, China, Japan, South Korea and Switzerland and see how quickly the countries in the EU will want to make a trade deal.
    Strange DUP has not come out to scuttle May who is the worst PM since Blair and Gordon Brown and maybe the worst ever along with Chamberlain.

  4. ivan says:

    This could be resolved by the government insisting that all Power Purchase Agreements have an Absolute Guarantee clause added to then ‘in the public interest’.

    Absolute Guaranteed Delivery places 100% of the risk on the supplier. There is no excuse or exception to required delivery without penalty as described in the contract. The supplier supplies the contracted amount of power or pays a hefty penality. This would force the unreliable producers to either build their own spinning reserve or purchase, at their own expense, power from the main generators thus killing two birds with one blade, making sure that there is adequate power available at all times and keeping the reliable power generators solvent without government hand outs.

    I can’t help wonder how that clause is missing from all Power Purchase Agreements for renewables. as it because some green FoE activist masquerading as a civil servant made sure it was missing (like they made sure the climate change act favoured their aims) or something else?

    Unfortunately this government hasn’t the balls to do something radicle like that because the polipigs and civil servants would squeal too much when their shares and directorship pay took atumble.

  5. hunter says:

    The attitude of the EU and its biggest proponents seems to be best summed up as “Let them eat cake”.
    Who knew Marie Antoinette was a green?

  6. JohnMurray says:

    My personal observations are that a read of the ruling should be attempted. It would seem the case was brought by UK demand-side provision organisations…who doubtless want a rise in their price. Seriously, while there was a measure of rule avoidance, which was initially signed-off by the commission, mostly this seems a UK sour-grapes attitude come back to bite itself.

    54 As the United Kingdom and the Commission state, respectively, in the notification and the contested decision, there is a risk that the electricity available in the United Kingdom will be insufficient in the near future for the purposes of satisfying high-demand periods. The oldest generating plants will shortly be closing, and the electricity market is at risk of failing sufficiently to encourage generators to develop new generation capacities to make up for those closures. Equally, the electricity market does not offer sufficient encouragement to consumers to reduce their demand in order to remedy the situation. In order to guarantee the security of electricity supply, the United Kingdom therefore concluded that it was necessary to establish a capacity market”

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