Crazy Energy prices, Short Deadlines, Solar Power. September 15, 2021 cliffski This is not a blog post about games. Its because I also run a solar energy company, which is in its infancy, but hopefully will start doing cool things next year, like building a solar farm. How often do you check the price of electricity? If you are like most people its…never. Maybe you go to a price comparison website every few years to see if you can get a better deal for your home electricity, but most people even then will not look at the actual price. Most people have no idea what their monthly electricity price is, and certainly no idea what the price per kwh (1,000 watts used for one hour) is. I’m not like that. The entire business model for the solar farm I hope to build next year (hopefully getting topographical survey results today,. probably signing the lease this month…), is based around the price of electricity being a certain value or higher. With current panel prices / inverter prices / storage prices and about 500 other factors, that minimum price is about £55 per MWH. (or £0.055 per kwh). This is the WHOLESALE price, not the price most end users pay. Its been around that price for a while. Lets look at a fun wholesale price chart for the UK! So…if you are looking at that and thinking you are confused because no way will the price of electricity be actually £160 per MWH compared to 55 this winter then… I have bad news for you. This chart is, AFAIK, correct. In fact, it gets way, way worse. Lets look at what the forward prices (prices at which electricity is being traded now for delivery at future dates) looked like on the 13th of September: Yup. its insane. We have had at least one day where the price has spiked to nearly 10x what it had been for the last few years. The price if electricity in the UK for retail customers has a price cap, but thats due to be adjusted next month. The actual price cap rise is about 12%, which if you consider that peoples salaries have not exactly risen 12% in the last year, is pretty shocking, but the really interesting/scary story is that there is NO WAY that energy companies can stay in business with only a 12% rise. The regulator will HAVE to allow higher prices, and soon. They set the 12% change in August which is now…very out of date. So why Am I blogging about this? Because the UK is in a serious mess when it comes to energy. To put it bluntly: we cannot produce enough power to keep this country running. We have closed almost all coal mines (necessary, due to climate change), but we didn’t make enough of an effort to fill the gap. And now we are going to have to VERY rapidly switch from gasoline cars to electric cars, our power demand is actually going to go up, not down, despite the best energy efficiency measures. There is an awesome website that tracks where the UK energy comes from in real time. The UI is horrible but you get the general idea. We have a fair amount of base-load nuclear, and some intermittent wind and solar, but a large part of our energy is either gas (whose prices are soaring, and is also a contributor to climate change and needs phasing out) or energy bought via connecting cables to France and Scandinavia. Now to be a bit more optimistic I should point out that the UK IS building a huge amount of wind and solar power, but these things take time so we are hopefully currently in a bit of lag, where spiking energy prices should be a reminder that you need to build power-plants in advance of when they are needed, not after a crisis… but the problem is we are both doing it too slowly, and doing it wrong. Too Slow From a climate change point of view, the UK is a disaster. Sure, there are truly horrendous countries regarding climate policy such as Australia, but we have nothing to brag about here. Our adoption rate of Electric Cars is pathetic compared to countries like Norway, we have no major electric vehicle or battery production facilities in the entire country, and we got rid of all subsidies for solar power. (My solar farm will be subsidy free). Take-up of solar power for residential users is way too slow, insulation of our leaky homes has not really got going, and the government of the day is basically completely disinterested. But thats just the background. In practice, even if the people were 100% behind green energy (and endless rants on facebook and planning objections from people who consider wind turbines an ‘eye-sore’ show they are not), and even if companies were full-steam ahead on building out renewable energy, I don’t think we are vaguely going to make it. And not because of evil government policies, and not because of technology… but because of planning. The solar farm I’m building is tiny (powering about 300 homes), but the planning process is absolutely horrendous. The application itself costs an absolute fortune, and the number of completely different, yet legally required processes you have to go through are frankly ridiculous. You need to check there are no birds nesting nearby, no protected bat species anywhere nearby, need to check the field is not of archaeological interest, need to do mock-ups for every person for miles around showing what they may be able to see on the distant horizon… And the process takes months… …and then once you have that, you need a grid connection and… guess what? That costs a fortune (only tens of thousands if you are lucky), and the process takes months. Maybe 6 months. Yes really. To connect a solar farm to the power grid. Now don’t get me wrong, in terms of actual work done by people actually doing things, its maybe a week. But the paperwork and pen-pushing can take six months. The whole pre-building process for a 1MW plant can be a year or two years. We.Do.Not.Have.Time.For.This. as a country. Planning reform is not some minor boring topic, its of national strategic importance. None of our climate change goals will be met without it. Doing It Wrong There is a brilliant opportunity before us. The energy market in the UK (and probably every country) is undergoing vast, vast change. There is a great moment here where we can bring about really awesome changes to the way people get their energy, and almost every country on earth is ignoring it, probably due to big phat bribes from lobbyists. Wind power and hydro power are special cases. They only really work at SCALE. Sure, you can put a tiny wind turbine up in a field if you are a farmer, but the efficiency is low. Its just physics, and the doubling of a blade length meaning 4x the swept area and thus energy captured. In other words, Huge wind turbines make more economic sense than small ones. Same with hydro power (as the fixed costs of putting in a system of any size are high). But setting aside that special case we have something really cool…solar power. This is a solution we should be embracing massively, yes even in the UK, and here is why: Solar power scales DOWN really well. The economies of scale when it comes to solar are not actually that massive. Sure, they exist, and if I had the money I would totally build a 2MW solar farm instead of a 1MW one… but they are small enough that its still WAY better for you to generate your own power from your own rooftop than it is to buy the power from someone else’s solar farm. Wholesale energy used to be £0.05. Current retail is £0.19. Every rooftop having solar power is kinda awesome, especially if there is local (either community or individual home) battery storage. It creates what are called ‘micro-grids’ which keep a lot of the back-and-forth of energy flow off of the main grid, and reduces the extent to which the grid needs mega upgrades to deal with the closure of gas plants and uptake of EVs. We have 10 solar panels in the garden. Not enough, by any means, but still a decent contribution. At their peak, they generate about 2kw per hour. My EV car battery is huge (85kwh) but its not like we use the whole range every day. Here is the recent output: My panels are almost exactly 10 years old, so they are low efficiency, old-tech polycrystaline ones that are shaded for part of each day, so my output is nothing close to what you would get with brand new panels on a rooftop. My actual energy use is high (working from home, multiple PCs on all day, electric cooking, electric car, old house), so if I could possibly fit some other panels somewhere I would. (In fact the solar farm, is born from my frustration at not being able to have my own home energy independence). Anyway, the point i am making is that home-solar is totally viable, and the beauty of it is that is DEMOCRATIZES the grid. This is the first time in generations that people have had the option of being able to say to the big multinational companies controlling energy “Thanks guys, but I generate my own power”. Even if you cannot go off-grid, you can reduce the amount of power you need to buy. Its a brilliant way of giving some power back to people instead of letting them choose between maybe 6 identical giant corporations who will still happily make a profit. We should be boosting residential solar big time. Its also GREAT for employment, because the installation on rooftops is actually pretty labour intensive. Panels are cheap now, a lot of the cost of the installation is just people going up ladders carrying stuff and connecting stuff. Where is the push in the UK for rooftop solar? Nowhere. I cannot remember the last time a government minister mentioned it, or encouraged it, or even acknowledged it exists. Where is the information campaign? where is the support? If we don’t start making noise about the alternatives we will find that the ‘green energy future’ looks exactly like the coal energy past, with giant faceless corporations squeezing money from all of us, with a ‘take it or leave it’ attitude. There is an opportunity here for something way better, if only people looked into it.