Electric Ireland energy sources are 63% from renewables ([link](https://www.electricireland.ie/business/help/efficiency/fuel-mix-disclosure) ). That means that 2/3s of the costs of energy production should be unaffected by the energy crisis yet we seeing the price of electricity go up hundreds of percent while, for example, petrol at the pump has gone up way less. Can someone explain? It’s like the renewables have no effect, or to put it another way, the way its going it looks like running a diesel generator is cheaper then getting electricity from the state body.

27 comments

  3. Electric Ireland like all energy companies are profiteering.

    Everyone important turns a blind eye because of a potential peak demand issue that could effect the electricity grid this winter. People are hoping that high prices will cut the demand.

    Be honest. Double or treble electricity prices during the 3 hour period that could be risky every day and manage demand.

  7. Oh god. This has been gone over to death. There’s hugely informative sources and indeed posts in this actual forum explaining it all.

  8. It’s down to how wholesale energy is sold. All pools are paid the same irrespective of the source. The cheapest pool is the renewable which are sold first. Once that capacity is exceeded the next pool is brought in and everything is charged at the higher rate.

    The renewable energy suppliers are making a killing right now. This is why the EU are talking about bringing in pricing reforms as this pricing system was great at promoting the use of renewable over fossil fuels but now is causing a massive crisis.

  10. It has actually cushioned the price increase somewhat for us compared to other EU countries that don’t have as much renewables as us, but the problem is that the price of electricity is artificially tied to the price of natural gas. The EU has announced plans to change this, and the wholesale price of electricity in Germany dropped by half yesterday in part due to that announcement.

  11. Wholesale electricity prices are pegged to the most expensive type of electricity generation. So as gas gets more expensive it causes all electricity prices to rise. I don’t fully understand it but changes are being made on how this works at an EU level so cheaper renewal electricity will bring wholesale prices down.

  12. I think it works something like this. Every producer puts in a bid saying they can sell X amount of electricity for Y.
    So wind can sell 25 units for €10/unit, Solar can sell 25 for €15, Hydro can sell 25 for €20 and Gas can sell 50 units for €25.

    If only 20 units are needed, they buy up from Wind and it gets €10/unit. However if they need 55 units, they’ll buy up all of Wind and Solar and 5 units from Hydro, but everyone gets the Hydro price of €20/unit. Because we need as much power as possible, the gas power plants are coming online and because gas is so expensive now because of Putin’s invasion, all producers are getting the price of the most expensive source, which is gas.

    Happy to be educated if this wrong though.

  14. A rough overview of the situation:

    When it comes to the electric grid, supply must match the demand at all times or the grid falls apart. Electricity can’t be directly stored in meaningful amounts so it is produced on demand. If the load (demand) on the grid is 10 units but you only produce 9 units, the grid fails. If that happens, those 9 units are worthless. The marginal (10th) unit sets the price. This is called marginal pricing. It’s very common in commodities markets.

    Say the grid demands 10 units and Alice has a very efficient setup & can produce 9 units at €1 and Bob is less efficient & can produce 1 unit at €2. If you offer to pay Alice €1 per unit, she’s going to say you’re paying Bob €2 for an identical unit. She can stop investing in her efficient setup or withhold her units and the grid fails. If we offer Bob the average price of €1.10, he’s not going to produce because he’d be running at a loss and the grid fails.

    There are three broad classifications of power plant.

    1. Base load
    2. Load following
    3. Peaking

    Base load covers all the stuff that’s always on – a constant load.
    Load following is the predictable ebb and flow as people go to work, cook and sleep at different times.
    Peaking covers sudden spikes in demand like when lots of kettles get switched on at once at half-time.

    Base load plants are typically very efficient, high capital, low operating cost and operate best at constant output and are very slow to change output. Big coal and nuclear plants are common for this.

    Load following plants can adjust their output at a reasonable rate but are more expensive to operate.

    Peaking plants provide rapidly dispatchable power but are very expensive to run. Gas turbines are commonly used for this.

    Renewables generally squeeze in between base load and load following. Average output is reasonably well predicted ahead of time. But output can’t be guaranteed so you need to have enough dispatchable power available to fill in the gaps.

    Now, say at 10am, the demand on the grid is 10 units.

    * Base load provides 5 units at €1
    * Wind provides 3 units at effectively €0
    * Load following provides 2 units at €3

    The price per unit is set by the load following plant. Everybody gets €3 per unit.

    * Base load makes €10
    * Wind makes €9
    * Load follower breaks even (still makes a profit included in his price)

    Here the base load guy is incentivised to increase his efficiency (i.e. burn less fuel to produce the same amount or more power). The wind farm guy is incentivised to build more wind farms. The less efficient load follower carries on. This is the way we minimise burning carbon fuels and maximise wind power investment.

    If the peak plant has to produce 1 unit at €5, everybody below him (including the load follower) makes more and are incentivised to reduce their costs to make even more profit.

    In our current situation, some idiot started a war and now there’s less gas to go around so the price went up like a rocket. The gas burning load followers and peaking plants had their costs go up. Thanks to marginal pricing, all electricity got more expensive.

    Now, the question, can we force different producers to accept different prices without disincentivising them? I don’t have the answer, but I’m sure there are a lot of people trying to figure it out.

  15. Money money money!

    No doubt that there is some increase in the price of raw fuels due to global and other inflationary events, but the major energy companies are using this as cover to profiteer like f**k.

  16. It’s because the electricity market model is based on marginal pricing, which means that the price of electricity is being set by the cost of the most expensive generation method used in the system, which happens to be gas.
    There is a shortage of gas because of the war, which means the price of gas is skyrocketing and driving up the price of electricity.

    Ursula von der Leyen explaining it:
    https://www.europarl.europa.eu/plenary/en/vod.html?mode=unit&vodLanguage=EN&vodId=b839936a-22b6-fdd1-03bd-487b76155158&date=20220608#

    Plans to reform this electricity market model (developed a couple of decades ago to boost the share of renewables in generation and no longer fit for purpose in the current circumstances) are in the pipeline (pun not intended).
    https://www.politico.eu/article/pressure-for-eu-level-intervention-in-energy-market-mounts-amid-soaring-prices/amp/

  18. Can we please have a sticky thread explaining how the retail electricity market works? Mods? Please? This must be the 20th time a thread like this has been made.

  20. Maintenance costs on so called renewables are high as fuck. Especially for wind. Have you any idea how much petroleum based lubricant they need to operate?

  22. The less a thermal power plant operates the higher the price per MW it must charge in order to remain profitable.

    Also due to wind turbines being asynchronous and unable to import/export Mvars there is additional payments to thermal plants for providing this service. It is referred to as DS3 and is essentially providing stability for the power grid. In Dublin alone there must always be a minimum of two large thermal plants on the bars in order to provide this service.

  23. I presume it’s just capitalism?

    Companies producing renewable electricity are rising the price in line with demand for their sweet sweet nectar.

  24. Nationalize the energy sector! All these companies made record profits in recent years so it’s not like they’re losing money, they’re just greedy and profiting at our expense. The price of oil hasn’t risen in fact it’s come down slightly so how can they justify rising prices again, it’s pure greed, if that’s how they’re going to act than I say we take them over and combine them into one national energy provider again, this is also needed if we are going to tackle climate change so it’s a no brainer really

  25. THE BROTHER has it all worked out.

    What?

    The energy crisis.

    How we can get through the crisie here in the Free State. I mean the rationing and brown bread and all that class of thing.
    The brother has a plan.
    Begob you’ll be surprised when you hear it. A very high view was taken when it was explained in the digs the other night.

    What is the nature of this plan?

    It’s like this. I’ll tell you. We all go to bed for a week every month. Every single man, woman and child in the country. Cripples, drunks, policemen, watchmen—everybody. Nobody is allowed to be up. No newspapers, ’buses, pictures or any other class of amusement allowed at all. And no matter who you are you must be stuck inside in the bed there. Readin’ a book, of course, if you like. But no getting up stakes. That strikes me as a curious solution to difficulties in this dynamic iron age.
    D’ye see, when nobody is up you save clothes, shoes, rubber, petrol, coal, turf, timber and everything we’re short of. And food, too, remember. Because tell me this—what makes you hungry?
    It’s work that makes you hungry.
    Work and walking around and swallying pints and chawin’ the rag at the street corner. Stop in bed an’ all you’ll ask for is an odd slice of bread.
    Or a slice of fried bread to make your hair curly, says you.
    If nobody’s up, there’s no need for anybody to do any work because everybody in the world does be workin’ for everybody else.

    I see. In a year therefore you would effect a saving of twenty-five per cent in the consumption of essential commodities.

    Well now I don’t know about that, but you’d save a quarter of everything, and that would be enough to see us right.

    But why get up after a week?

    The bakers, man. The bakers would have to get up to bake more bread, and if wan is up, all has to be up. Do you know why? Because damn the bit of bread your men the bakers would make for you if the rest of us were in bed. Your men couldn’t bear the idea of everybody else being in bed and them up working away in the bakery. The brother says we have to make allowances for poor old human nature. That’s what he called it. Poor old human nature. And begob he’s not far wrong.

    Very interesting. He would do well to communicate this plan to the responsible Government department. And you’re not far wrong there yourself.

    Bye-bye, here’s me bus!

  26. Because the EU has mandated that energy is bought at the value of the most expensive source. Thanks EU. 👏👏

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