Author Topic: "Gas Armageddon": Energy/electricity prices in EU/UK (and how to deal with them)  (Read 79096 times)

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Offline Marco

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The whole western is printing money like mad, with the US no exception. This seems to be a problem of western style democracy
It's not a problem, it's a feature.
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Economical failure of the state
The frequency of depressions has been massively reduced for the cost of a little inflation with an unprecedented era of sustained increases in standards of living. The current problems in real estate have got little to do with money printing and all to do with money distribution, wealth distribution can grow lopsided in any environment.

In general, economies can fail just fine without money printing too ... in fact they do so more frequently.
 
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Online tom66Topic starter

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Economists are really good at predicting recessions - they've successfully predicted nine of the last five. ~Paul Samuelson
 

Offline Siwastaja

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So realistically if those are implemented you are looking at a 10-15% reduction in gas usage in industry.  I think that's manageable, obviously the heaviest industries (glass making is a good example) will struggle more.  But a great deal of industrial gas is just spent on heating factories, offices and so on, so that will just mean they are a bit colder.

Exactly this, some of the gas is required for chemical processes, which is hardest to replace, but this part is tiny. Some is required for special furnaces etc. which are hard to quickly convert to other energy sources, this is somewhat easier but still difficult to replace.

But, the vast majority of the gas goes to heating, and it makes very little sense to classify the use cases "domestic" vs. "commercial" vs. "industrial", it all boils down to people enjoying being at +20degC but managing at, say +15degC because you can put more clothes on. Yeah, it sucks, I know, but it does not force any office or any factory to go down.

The problem is overreacting to bad news, similarly how COVID was supposed to kill 1% of population, including large numbers of young and heatlhy individuals, yet it didn't.

So again what we will actually see is slight reduction in indoor temperatures (including industrial estates) but not enough to really cause serious health problems. It is way easier to personally protect oneself against cold, than excessive heat.

The lack of components (and everything else!) for the past 2 years has been a much bigger problem for industry in EU, including car industry. It doesn't matter if the factory where you can't build a car due to component shortage has indoor temperature of 20 or 15 degC.
 
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Offline tonyget

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Online tom66Topic starter

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https://www.theguardian.com/business/2022/sep/13/gas-prices-eu-fall-sharply-goldman-sachs-eu-russia

"European gas prices likely to fall sharply this winter, says Goldman Sachs"

Good news if it pans out as predicted.
 

Online themadhippy

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"European gas prices likely to fall sharply this winter, says Goldman Sachs"

Good news if it pans out as predicted.
wont make any difference  to uk  consumers, the price is set in stone for the next 2 years.
 

Online tom66Topic starter

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The Goldman prices are close to the UK cap - 100 EUR/MWh = ~10p/kWh gas, plus supplier overhead would probably make that 13-14p/kWh if no caps were applied.  UK cap is 10.4p/kWh.  Of course seasonal variations may effect that too.

But the UK price is only a cap, if wholesale costs drop then prices would be expected to fall below that.
 

Online themadhippy

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if wholesale costs drop then prices would be expected to fall below that.
:-DD just like fuel prices  dropped when the vat was reduced,or the price of oil fell.
« Last Edit: September 14, 2022, 01:46:22 pm by themadhippy »
 

Online SiliconWizard

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I'm sure we can trust Goldman Sachs.
 
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Online tszaboo

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https://www.ft.com/content/c936d529-4223-4983-980c-0e4251ed1297

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EU targets €140bn from windfall taxes on energy companies

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The commission proposal would set a mandatory threshold for prices charged by companies that produce low-cost, non-gas energy, such as nuclear and renewables groups.

Companies would have to give EU states the “excess profits” generated beyond this level, which the commission seeks to set at €180/MWh. But member states would be free to put in place lower thresholds of their own.
Only too bad that it just doesn't go back to the customer directly.
 

Online langwadt

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https://www.ft.com/content/c936d529-4223-4983-980c-0e4251ed1297

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EU targets €140bn from windfall taxes on energy companies

Quote
The commission proposal would set a mandatory threshold for prices charged by companies that produce low-cost, non-gas energy, such as nuclear and renewables groups.

Companies would have to give EU states the “excess profits” generated beyond this level, which the commission seeks to set at €180/MWh. But member states would be free to put in place lower thresholds of their own.
Only too bad that it just doesn't go back to the customer directly.

then I'd like to buy from cheap sources, everyone else can buy from the expensive sources ....

when I use a kWh it doesn't matter if it is from cheap or expensive source, if total demand exceeds the cheap sources the fact that I used it caused expensive sources to be needed, if I got compensated for "cheap sources" I wouldn't be as encouraged to save energy, causing even more need for expensive sources



 

Offline bdunham7

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I'm sure we can trust Goldman Sachs.

They seem trustworthy to me.  They pay their dividends like clockwork! 
A 3.5 digit 4.5 digit 5 digit 5.5 digit 6.5 digit 7.5 digit DMM is good enough for most people.
 

Online tautech

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https://www.ft.com/content/c936d529-4223-4983-980c-0e4251ed1297

Quote
EU targets €140bn from windfall taxes on energy companies

Quote
The commission proposal would set a mandatory threshold for prices charged by companies that produce low-cost, non-gas energy, such as nuclear and renewables groups.

Companies would have to give EU states the “excess profits” generated beyond this level, which the commission seeks to set at €180/MWh. But member states would be free to put in place lower thresholds of their own.
Only too bad that it just doesn't go back to the customer directly.
This was identified early this year in NZ and a Gubbermint desperate for praise reduced the excise tax on motor spirits in some effort to protect the economy from the flow on price increases from increased transport costs.
Yet still we have 8+% inflation and possibly lots more.  :o

Again, we are run by children that make decisions to unnecessarily expose us to international energy fluctuations by closing coal mines and importing it FFS, ceasing all onshore and offshore oil/gas exploration and resisting further hydro dam development......all of which NZ will pay dearly for and soon.
Further the muppets tax special use vehicles like utes and such to subsidize EV's FFS which if this winter is anything to go by as the national grid operator has warned electricity retailers to cut back consumption 3 times in a fortnight.....and they want more EV's on the road.....they're blithering idiots !
« Last Edit: September 15, 2022, 10:55:39 am by tautech »
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Online tszaboo

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then I'd like to buy from cheap sources, everyone else can buy from the expensive sources ....

when I use a kWh it doesn't matter if it is from cheap or expensive source, if total demand exceeds the cheap sources the fact that I used it caused expensive sources to be needed, if I got compensated for "cheap sources" I wouldn't be as encouraged to save energy, causing even more need for expensive sources
That's how it works in a free market. We are not in a free market, and this is a strategic resource. Why do customers need to pay extra for wind energy, because the price of gas went up? Why is my district heating more expensive? It's done by a coal fired power plant. I have no alternative way of heating my entire house. Because they have a monopoly on the heating supply, and used bad legislation to charge me more money for it.

If you have a windmill park, you got extra profit. Now the EU will step in, take that extra profit and use it the way they deem necessary. I hope they tell the energy suppliers that they have a monopoly on making laws, and if they don't like the extra tax, too bad.
 
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Online iMo

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The fact we have to pay more money for energies is simply our fault ("we citizens") - it is the fault of every EU/UK citizen who is eligible to vote. We have to pay four our mistakes we have made. We live in the well functioning democracies where we decide, and are responsible for, on how our EU/UK's strategic interests are guarded. You, me, we all in EU/UK are guilty for this crisis and we have to pay the price..
Edit: added UK
« Last Edit: September 16, 2022, 08:42:17 am by imo »
Readers discretion is advised..
 

Online tom66Topic starter

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if wholesale costs drop then prices would be expected to fall below that.
:-DD just like fuel prices  dropped when the vat was reduced,or the price of oil fell.

VAT hasn't been dropped on fuel, though.

And the price of fuel has fallen.  Around here, it's £1.59/L now, whereas it was up to £1.90/L at peak.  This actually lines up fairly nicely with the drop from $130 a barrel to $100 a barrel (20% fall in pump price, 30% fall in oil price, but remember most of the price is tax in the UK.)
 

Online themadhippy

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VAT hasn't been dropped on fuel
my mistake,i meant fuel duty,dropped by 5p a liter
 

Online langwadt

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then I'd like to buy from cheap sources, everyone else can buy from the expensive sources ....

when I use a kWh it doesn't matter if it is from cheap or expensive source, if total demand exceeds the cheap sources the fact that I used it caused expensive sources to be needed, if I got compensated for "cheap sources" I wouldn't be as encouraged to save energy, causing even more need for expensive sources
That's how it works in a free market. We are not in a free market, and this is a strategic resource. Why do customers need to pay extra for wind energy, because the price of gas went up?

because they use electricity, not wind or gas electricity, it is one big pool. When demand exceeds cheap supply that drives the need for expensive gas electricity, so everyone gets to pay because everyone contributes to the "problem"


Why is my district heating more expensive? It's done by a coal fired power plant. I have no alternative way of heating my entire house. Because they have a monopoly on the heating supply, and used bad legislation to charge me more money for it.

that might be bad legislation, I get district heating from a coal plant, and it hasn't increased in price

If you have a windmill park, you got extra profit. Now the EU will step in, take that extra profit and use it the way they deem necessary. I hope they tell the energy suppliers that they have a monopoly on making laws, and if they don't like the extra tax, too bad.

don't they also get subsidies when the price is low? i.e. it goes both ways they get a fixed price
 

Offline Squarewave

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"European gas prices likely to fall sharply this winter, says Goldman Sachs"

Good news if it pans out as predicted.
wont make any difference  to uk  consumers, the price is set in stone for the next 2 years.

That's only a price cap?
 

Offline Faringdon

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Folks.
We speak of Gas Armegeddon......from Putin's narrative, we are getting  forced into a full Nuclear war here with Russia.
We have no other choice.
We must embrace full Nuclear war....read post #542 to hear the detail.
Otherwise the Utter Blood  Drenched Barbarism meated out to Ukraine by Putin will also come to us.
Its such a shame because the Russian people are such great , wonderful, nice people.
But Putin, and a few of his lackys,  calls their shots.
« Last Edit: September 16, 2022, 04:51:59 pm by Faringdon »
'Perfection' is the enemy of 'perfectly satisfactory'
 

Online tom66Topic starter

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Putin isn't going to go nuclear, because his advisors would not let him.
More than the President is needed to launch a missile.  The whole chain of command is needed.
And that would almost certainly result in immediate retaliation from NATO.  So it is just not an option that will be considered unless Russia is invaded itself.
 
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Offline james_s

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Putin isn't going to go nuclear, because his advisors would not let him.
More than the President is needed to launch a missile.  The whole chain of command is needed.
And that would almost certainly result in immediate retaliation from NATO.  So it is just not an option that will be considered unless Russia is invaded itself.

One can hope this, but I don't know that I'd count on it. Does anyone really know how things work deep within the Russian government? Are we really that confident on the checks & balances that exist to keep Putin from having too much power?
 

Online wraper

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There is no reason for Putin to use nuclear, certainly not even close at this point. Russia is not even all in into a full-fledged war with Ukraine at this moment. Only a relatively small part of total army is deployed there. No conscript soldiers (Russia has a large reserve of that if needed), only professional military who work on contract. The only conscript soldiers are from DPR/LPR (separatist regions of Ukraine). Several orders of escalation are needed before nuclear would be even considered. This is some really weird war FWIW. Ukraine says Europe should stop buying Russian gas while continuing pumping it through their own territory, but Russia supplying gas to an enemy country it is at war. Do not recall something like that in history.
 
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Offline Siwastaja

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Ukraine says Europe should stop buying Russian gas while continuing pumping it through their own territory.

Oh, this one's simple: Europe (esp. Germany) wants to buy Russian gas, but Europe supports Ukraine, so Ukraine's interest is to let the gas flow to their supporter. Basically Europe supports both Ukraine and Russia (through the gas payments, especially artificially inflated gas price).

Getting the gas through is everybody's shared interest so it's no surprise it happens. Even though everyone feels bad doing that.

But it now seems this might be slowly changing with the "we don't want to sell after all, no wait we want, no wait..." & "we don't want to buy, no wait, we want to buy, no wait we don't" game. Let's see what happens.
 

Offline Nusa

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Putin isn't going to go nuclear, because his advisors would not let him.
More than the President is needed to launch a missile.  The whole chain of command is needed.
And that would almost certainly result in immediate retaliation from NATO.  So it is just not an option that will be considered unless Russia is invaded itself.

The US President is literally all that's required to authorize nuclear launches on a moments notice, so long as he's picking a pre-planned option. (It was a real worry during the Trump administration, given his rhetoric and crazy act.) Sure there are people in the physical chain of command, but they're trained, vetted, and blind tested (they think it's real, even when it's a test) to follow orders -- or they're removed from the chain. All the codes and interlocks are only to verify the order is coming from the President and to prevent any other individual from launching without authority.

I imagine the Russian setup is comparable, with Putin having uncontested launch authority. Talking to advisors before acting would be an unacceptable delay in process. That would come after, when it comes to what happens next.

Sure, there would be consequences, both internally and externally. Retaliation would happen, but unless NATO countries were DIRECTLY targeted it may not be immediate or even nuclear, since the results of escalation to mutually assured destruction levels with a country with sub-based nukes are very high indeed.

So your entire argument really comes down to: I think Putin is too sane to use nukes. If he's got something terminal, maybe not. If he's about to be overthrown, maybe not. If he's a poor loser, maybe not. Are you willing to bet your only world on that logic?
 


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