Energy may go even higher

[John Brown]

We currently pay nearly 6 times as much for electricity as for gas. So would need a COP of 6 to break even. That's not much of an incentive.

 

[Trainee neophyte]

A sign of things to come: I have a 10kw solar panel system which sells all the power to the grid. I originally was paid about €7,000 a year for the power produced, but early on in the financial crisis the Germans insisted that the price per kilowatt was reduced (apparently I was getting a higher rate than Germans could get, which wasnt fair) so now I get about €6,000 per year. I pay tax on this income, obviously, but last week we had a suprise electricity bill for €500 because the government have, without mentioning it to anyone, decided on an additional 6% tax on my annual gross generation income - because they can. I expect the 6% to be merely an initial rate which will increase over time, again because they can.

Governments are overextended and looking for income, from any and every source. They are also trying to inflate away the debt, which is just theft from everyone who has savings or earns income in the currency. European energy policy has created the current crisis (done on purpose to make green energy more competitive?) and shutting the world economy down for a year gave it all an extra shove. There hasn't been enough investment in oil and gas to replace declining supplies from current sources : this means that actual shortages as well as insanely high prices are guaranteed in the near future. Oil over $80 a barrel causes instant world recession so it will self regulate, but ensure a lack of future investment and exacerbate the problem. We are royally flocked.

You would have to be a proper conspiracy theorist to think that all of this has been done on purpose.

Oh, and I forgot to mention fertiliser - I normally pay €600 a year to feed my trees, but this year it is over €1,000 because of gas prices. Do I pay the extra and be out of pocket, or do I put less fertiliser down, have a reduced yield and be out of pocket? Every farmer is making this decision right now, knowing that food prices are based on financialised investment market corruption, not the cost of production. Better to be cautious and plant less rather than assume there will be high prices due to lack of product.

Food insecurity is going to become an issue for many, but riots over fuel insecurity will come first - see Kazakhstan as a glimpse of our future.

Happy new year, everyone!

 

[Sachakins]

Does anybody know the actual reason gas wholesale prices are rising so fast?

 

[Spectric]

Apparently it is just a case of supply and demand, demand is outstripping supply and so prices rise. One reason is that many coal fired power stations and several nuclear plants have switched to using gas, there has been a colder winter in europe but not sure how true that is and then you have the issue with the americans sabre rattling with Russia over Ukraine.

Having watched a program this morning about some planed gas pipeline in the mediteranean a lot of the current issues could have been averted had it been built but with Greece and Turkey involved along with Israel it has just been friction and put back to 2027 with the gas reserves in the eastern mediteranean just sitting there and probably by the time anything happens our gas needs will be less as Borris bans gas boilers.

 

[Trainee neophyte]

Does anybody know the actual reason gas wholesale prices are rising so fast?

Lots of moving parts to this. I don't claim to understand all of it, but some of the issues are:

1. Russia is evil and it is all their fault for everything: Why have Europe's energy prices spiked and what can the EU do about them?

2. Europe, and particularly Germany, have an insane green energy policy which makes for the most expensive energy for consumers anywhere in the world, I think (but some small islands using diesel generators may pay more). Not having sufficient other sources means that there isn't enough gas to plug the gaps when the wind doesn't blow. Despite not having sufficient electricity generation options, Germany still turned off another nuclear power plant on 1 January because green = better. Not enough wind means a huge demand for everything fossil fuel.

3. Markets were deregulated and made more efficient (for hedge funds, that is) and fixed price long term contracts were no longer the preferred option. This was great when the price was low, but now it isn't, it's all gone Pete Tong. Some people are making fortunes and other people are going bust. The consumer will pay more, obviously - because the market is more efficient.

4. Last year's winter reduced the amount of gas in storage across all of Europe and also Russia, but because prices were high no one wanted to pay to replenish the reserves. That may have been a mistake.

There is probably quite a lot more, but as so much of this is political it is difficult to get honest information. There are claims that Russia is withholding gas, although I keep asking for proof and never finding it. I think because the price is high companies aren't buying, rather than Russia not supplying, but either way the amount of gas flowing west is somewhat reduced. A war in the Ukraine could change this overnight, so it may be interesting to see who pushes who to take the first swing. I would expect Ukrainian gas infrastructure to be the first casualty, given that it is so poorly maintained it only has 2 or 3 years of life anyway, allegedly. A theoretical reason for USA to push for a conflict, despite the fact that USA can not possibly provide enough gas by ship for European needs.

Feel free to pull the above apart - I would love to have someone confirm my thinking, or otherwise.

 

[Dibs-h]

I think there was also the bit about most of the UK's imported gas is LNG transported in tankers from the US & ME and as China's demand went sky high, tankers from the US\ME originally bound for the UK, got diverted to China - even with the penalties involved in breaking those contracts, the huge leaps in prices still paid off.

Combine that with the UK possibly having the lowest storage in Europe - just makes for a sh1tshow.

 

[Spectric]

Combine that with the UK possibly having the lowest storage in Europe

I dare say many people here can remember seeing gasholders or gasometers in most towns that stored gas which have now mostly gone, what a great way to store reserves of gas when there is a spike in demand or cost goes high and yet someone saw fit to get rid of them, probably due to cost of maintanance but I bet they wish we now had them.

I think there was also the bit about most of the UK's imported gas is LNG transported in tankers from the US & ME

Yes that program mentioned how Egypt produces LNG and that it is more efficient and cost effective to pipe just natural gas at pressure through a pipeline than moving LNG around in tankers.

Russia is evil and it is all their fault for everything:

Don't forget Israel, that Netty yahoo is probably a bigger war monger and threat to world peace than Putin, about time someone knocked them down a peg or two.

A war in the Ukraine could change this overnight,

So long as America keeps its nose out then it should only be a short one, if they stick there nose in then things will become a lot worse because American oil supplies will be disrupted if Russia and China take offence.

 

[Terry - Somerset]

As North Sea oil and gas decline, the UK is unlikely ever to be self-sufficient in gas. Given current policy goals of zero carbon the solution is a rapid transition to non-carbon sources, not finding ways to somehow control international commodity markets.

There is limited merit to arguments for additional storage. Prices can be largely stabilised by forward purchases. Storage removes the risk of default in the markets, but stability is a matter of policy as its replenishment would anyway be at the market price.

The world order is fundamentally unstable in a way unseen since WW2:

• US still think they are the dominant world power. Depending upon how power is defined, China has either already overtaken the US, or will do so in a few years.
• the West still think Putin and Russia are replaying the cold war. They fail to understand that with the loss of the eastern European Soviet buffer, that Russia feels very exposed.
• the EU as a major world economic grouping have no common defence or foreign policy. They may be NATO members but this is wholly reliant on US support which is less than 100% assured
• population growth and technological change is rapidly increasing demands for raw materials, clean water, and space

The solution is a very clear sighted strategy to substantially achieve energy independence, implemented with resolve at speed.

Increased energy prices will encourage behaviours which reduce consumption and the size of the problem. Subsidies, reducing VAT, nationalising energy companies etc etc may win short term popular acclaim, are short term fixes, but will not promote the speed of change in behaviours and infrastructure required.

 

[Phil Pascoe]

US still think they are the dominant world power. Depending upon how power is defined, China has either already overtaken the US, or will do so in a few years.

My history master told us that the the threat to world stability in the 21c wouldn't be Russia, it would be China. In 1969.

 

[baldkev]

I dare say many people here can remember seeing gasholders or gasometers

Yes! When i was a kid we lived near one in brighton, it fascinated me because sometimes it was up, sometimes it was down. Eventually I asked my dad, who explained it and back then he worked for British gas

 

[Cabinetman]

I always found it incredible how they stopped the gas leaking around the joint of the two biscuit tins, at first I thought there must be a great big rubber bag in there but the top half didn’t just go up and down it swivelled round on a screw thread, so it twisted.
I have no doubt that some very clever person will come along in a minute and explain it for me.
So it doesn’t take a genius to read between the lines that there won’t be any help when Russia invades as we daren't because we will all die of the cold. Think I might just get a couple of bottles of propane – just in case.

 

[Droogs]

The bottom storage tank has a double wall which is filled with water and the wall of the top of the tank sits inside the double wall. The water acts as the seal and also allows the top to rise and fall as the volume of gas inside changes. First introduced in the early 1820s. The two big ones on the outskirts of Glasgow used to fascinate me as a kid when we went past.

 

[Trainee neophyte]

The solution is a very clear sighted strategy to substantially achieve energy independence, implemented with resolve at speed.

Increased energy prices will encourage behaviours which reduce consumption and the size of the problem

Do you subscribe to the theory that this is being done on purpose to reduce consumption and make green energy more competitive?

It's It's a bit harsh for everyone who doesn't get free money direct from the printer. We are required to replace our transport (or not travel), replace our heating system (or be cold), work from home (or not work at all). This will produce a colossal transfer of wealth from just about everyone to a small coterie of already excessively wealthy people, which is the purpose of government when you get down to it.

 

[Jameshow]

If prices go up much more the numbers of old people who cannot afford to heat thier homes (only using electricity) is going to be massive and the death toll with easy out strip covid....

 

[clogs]

we use propane for cooking.....it just went up 25%......
For water heating 98% of the year is solar......
to heat the house and water on cold, less sunny days the only option is wood or oil for us....dual fuel boiler.....
as the tent dwellers are not short of a few bob we use wood on principal......
to add, when drive around we use a Kombi van and at the bins people dump all kinds of wood, from pallets to furniture..... we collect it and add it to our bought in supply of Olive.....
elec has also increased by about 30%, so very glad we didn't install Air-Con for the tourists...
these increases have been in just a few short weeks....

 

[Spectric]

back then he worked for British gas

The only british supplier left, once upon a time it was the gas equivalent of the national grid and was where we all got our gas from, then Thatcher made way for it to become private and that was that. All ultilties that supply gas, electric and water should be nationised and their running overseen by UK tax payers.

 

[Phil Pascoe]

I tend to agree, but why presume that they would be any better? They never were.

 

[Spectric]

I think an answer could be found by comparing the Japanese railways and our UK railways, both were national and now privatised but apart from that they are chalk and cheese. I suspect it is the fact that in the UK we have a dire track record when it comes to management and people skills.

 

[Terry - Somerset]

We are required to replace our transport (or not travel), replace our heating system (or be cold), work from home (or not work at all). This will produce a colossal transfer of wealth from just about everyone to a small coterie of already excessively wealthy people, which is the purpose of government when you get down to it.

Energy saving does not require expenditure in the £000s. Reducing total consumption will reduce the market price of all energy - simple supply and demand. Reduction with limited impact on quality of life and at trivial or no cost is simple - eg:

• when the car is next replaced - max of medium size, or one size down - whichever is smallest
• buy local not airfreighted
• turn down the heating 1 or 2C
• walk or bike don't drive unless necessary
• keep appliances until they fail and unrepairable. Don't replace if go out of fashion
• buy less new clothes, repair
• holiday closer to home - no need to fly 5000 miles to find sunshine even if you live in UK

Most of these save money, not increase expenditure. There will be some folk for whom all these changes are not feasible - eg: rural, work requirements, disabled etc. That most of us don't is down to selfish gratification, not inability - I am no exception.

Accepting that those at the bottom of the economic league cannot make these changes (they already find things difficult) is not a reason for the other 80-90% not to embrace change.

For those folk it would be entirely possible, for instance, to increase benefits, subsidise or zero rate the first (say) £500 of consumption so that the vulnerable would be protected. The only issue is who pays - the costs won't somehow disappear.

 

[Spectric]

buy less new clothes, repair

The fashion industry is a great example of how marketing can target the gullable and is an enviromental disaster, who would ever have thought that one day people would buy worn out jeans, I used to get moaned at for wearing jeans with threadbare knees now they wear just the threads often with rolls of fat hanging out.