UK energy Balancing Mechanism costs ‘skyrocketed by 294%’ – to nearly £1 billion for the quarter year

Posted: December 7, 2021 by oldbrew in Energy, net zero, Politics
Tags: , , ,


Of course if the UK was willing to tap its own coal and onshore gas and had enough places to burn them, which could have been the case but isn’t, much of this eye-watering expense wouldn’t be needed. But foolish climate obsessions like costly so-called renewables and ‘net zero’ have dulled the minds of too many politicians so here we are. Expect more of the same.
– – –
From September to November, the BM cost reached £967m, compared to £337m the same period last year, reports Energy Live News.

The crisis in the energy market has so far had many collateral damages – one of them, the cost of the Balancing Mechanism (BM) that soared by 234% during the three-month period, from September to November.

The BM is a tool used by the National Grid to balance electricity supply and demand in real-time. Where these two metrics are not balanced, participants submit bids to either increase or decrease their generation or likewise for consumption.

New research by the consultancy LCP suggests the BM cost has jumped to £967 million from the £337 million that it was in the same period last year.

The analysis suggests that the top ten most expensive days in the BM of all time have occurred in the past three months.

It also notes that the all-time peak was breached on 24th November, where the cost to balance the UK’s electricity network totalled £63.3 million, a leap of £18.6 million from the previous most expensive day recorded on 2nd November.

For November alone, the average daily cost of the BM was £16.4 million an increase of 192% from 2020 and 756% from 2019 when the average daily cost was £1.92 million, the report concludes.

Full report here.

Comments
  1. John MacDonald says:

    I guess the UK has also decided that MMT and the perpetual printing of more money supply are good things too.

  2. Chaswarnertoo says:

    The utter insanity of the greentards is showing. We will be happy and own nothing.

  3. Phoenix44 says:

    So every household in Britain is now paying an extra 50p/day for its electricity just to balance supply/demand.

    I suggest we all take it as a tax deduction when we do our tax returns next month.

  4. oldbrew says:

    Energy supply shortage 2021 – statistics & facts
    Published by N. Sönnichsen, Oct 22, 2021

    Europe and Asia are currently embroiled in an energy supply shortage that has greatly affected commodity prices for fuels and minerals, with repercussions for households and manufacturers alike. Natural gas prices have been rising to record highs in Europe. As power demand increased over the hotter months and wind energy generation was uncommonly low, reduced gas supplies from Russia have compounded a dearth of electricity generating fuels. Natural gas is the second greatest source of EU power production, and the hike in gas prices has led to surging monthly wholesale electricity prices across the continent, supplier businesses folding in the UK, and the European Union being reminded of its reliance on Russia for meeting energy demand.

    Read more — https://www.statista.com/topics/8604/energy-supply-shortage-2021/#dossierKeyfigures

    ‘Number of coal power plant units in China: 2,990.’
    – – –
    All going downhill. Small UK energy firms reliant on current market prices for gas folded quickly. Minimal UK gas storage. Only 3 or 4 UK coal power stations left, of which at least 2 soon to close. New nuclear several years away, old nuclear shrinking fast. Baseload crumbling due to government policy. Low-energy renewables can’t cut the mustard.

  5. […] UK energy Balancing Mechanism costs ‘skyrocketed by 294%’ – to nearly £1 billion … […]

  6. ivan says:

    There is a simple answer to this problem – the national grid only buys power in one month batches AND the generator must guarantee the amount of power supplied for that month.

    If a generator can not supply the amount of power they have quoted on it becomes their responsibility to pay for any shortfall. If they generate too much, tough, they don’t get payments for the extra.

    If this was followed we would see the cost of power go down for the consumer and a vast amount of the subsidy farmers going out of business. It would upset most of the politicians that have a money interest in such generators.

    There is absolutely no reason why the consumer should pay for any power generated but not used.

  7. oldbrew says:

    the all-time peak was breached on 24th November, where the cost to balance the UK’s electricity network totalled £63.3 million

    Obvious madness.

  8. Graeme No.3 says:

    It has been obvious to all but politicians and others who lack logic that grafting a variable supply onto a continuous system requires much storage for excess generation to balance the periods of inadequate generation. As batteries were/are far too costly and pumped storage also, the wishful fell back on a backup by variable supply – and the only ones known were gas-fired “peaking plants” and diesels. Both are more expensive to run than more conventional methods (and don’t reduce emissions much) but to also reduce supplies of gas (and stocks) would only work if there was a world-wide glut and lower prices.
    All the indications are that the Government hasn’t grasped reality and hopes to “muddle through” the coming winter. I predict that by April there will be a change in which PM’s wife is running the country.

  9. oldbrew says:

    On-its-last-legs coal was running at 4.5% of UK output earlier this evening.

  10. Graeme No.3 says:

    @oldbrew
    maximum (remaining) capacity? Do they add the (roughly) 3% from burning more expensive wood chips?

  11. oldbrew says:

    Graeme – no, but Drax may have restarted another retired coal plant?

    Update: Energy firm Drax may delay the closure of its coal-fired power plant on Yorkshire due to the current energy crisis and the fragility of the UK’s electricity supplies, the Financial Times (FT) has reported…delayed the closures to September 2022.
    https://eandt.theiet.org/content/articles/2021/09/drax-could-delay-closure-of-coal-fired-generators-as-energy-crisis-looms/

    Britain’s last coal power stations to be paid huge sums to keep lights on
    Mon 13 Sep 2021
    The UK’s electricity system operator (ESO) spent more than £86m last week alone to keep the lights on, which involved making payments of up to £4,000 per megawatt-hour for fossil fuel power stations to generate electricity at short notice, including the West Burton plant in Nottinghamshire and a coal unit at the Drax site in North Yorkshire.

    https://www.theguardian.com/business/2021/sep/13/britain-last-coal-power-stations-to-be-paid-huge-sums-to-keep-lights-on-record-energy-prices

    Note that was September, not the latest panic.

    Today…

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