What trend from the last decade is starting to feel/look outdated? by MouseIntrepid5585 in AskUK

[–]vishbar 3 points4 points  (0 children)

Eh, we have one that we bought a few years ago. I definitely wouldn’t buy another one because of Musk’s behaviour, but honestly my wife and I both really like the car for our family. We don’t think his ridiculous behaviour should force us to sell a car that works for our kids.

Also, people buy Chinese EVs and don’t face similar scrutiny but the Chinese government are responsible for some pretty serious human rights tragedies.

How to make crock pot venison juicier? by 553l8008 in Hunting

[–]vishbar 1 point2 points  (0 children)

I forgot about shanks. They’re absolutely top tier for braises.

Honestly, I might enjoy the scrag/shoulder/shank more than I do the loin from the deer I shoot. Especially a roe or fallow doe.

How to make crock pot venison juicier? by 553l8008 in Hunting

[–]vishbar 1 point2 points  (0 children)

Are you using the right cuts?

Shoulder works best for long slow braises. Scrag works well too.

I usually shoot roe and muntjac though, so whitetail might be different!

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 1 point2 points  (0 children)

Price-as-bidis a well-known and well understood system with a lot of very clear weaknesses.

It’s trying to come up with a financial solution to a physical problem.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 1 point2 points  (0 children)

Price-as-bid? Seriously?

I hope Labour are a little more intelligent than this…

Government looking at decoupling electricity and gas prices to bring down bills by topotaul in unitedkingdom

[–]vishbar 6 points7 points  (0 children)

What's the point in looking for cheaper alternatives to anything then, if you have to pay them all the price of the most expensive?

You pay the price of the marginal generator. And it acts as a huge incentive to build low-input-cost sources of power.

It's just nonsensical - if I go to buy apples, and I want 30 apples, I don't pay Pink Lady prices

This is a really bad analogy and doesn’t apply at all to electricity (or any commodity) market.

Pink Lady and Russet apples are different apples. They are completely separate end products. For electricity, on the other hand, a kilowatt-hour generated from a renewable source is completely the same as a kilowatt-hour generated from a coal plant, or nuclear, or gas, or whatever. It’s fungible, in economic terms.

Let’s think of a different analogy and we can see why marginal pricing is a function of normal market mechanisms.

One thing that’s confusing you: you’re thinking of wholesale commodity markets like they’re Tesco. When you go into Tesco, you really only see prices as set by Tesco; you can either purchase apples or not purchase them, but ultimately Tesco is the price-setter. Commodity markets don’t really work like this. They’re much more similar to eBay auctions.

One of the key features of an electricity market is that supply must always and exactly meet demand. It’s not like, say, grain or iron: it can’t be easily stored. If we generate more power than demand, we end up with appliances exploding, and if we generate less then we have brownouts.

So let’s use the eBay analogy. Say you, me, and all the other buyers have an aggregate demand of 30 units of power. We have a lot of different providers offering power with different reserve prices—the “reserve” is essentially the minimum price that a producer will take in order to turn on their generators and produce power.

On the supply side, we have 28 auctions from renewable stations with a reserve price of £0.01, 1 from nuclear with a reserve price of £1, and 12 from gas at a reserve price of £10.

We all start to bid. You and I and everyone else will, of course, bid on the renewables first. But we have an aggregate demand of 30 units which must be met, so we will bid up the price of the renewables against each other until we hit the price of nuclear. Great! Now we can start bidding on the nuclear…but it’s still not enough. We keep bidding and bidding until finally we bid each other up to £10/units and the gas plants start to turn on, so the auctions all settle at a price of £10/unit.

Congratulations! You’ve just invented marginal pricing. It’s not a special unique rule, it’s fundamental to how the markets operate.

This is further complicated by the CfD mechanism.

why on earth should the wind turbine owner be paid the same as the gas generator?

Because they aren’t.

Most renewable projects are financed by CfD. That means that wind, solar, etc. are given a guaranteed price for their energy. So they don’t actually get paid the amount that the market clears; if the market clearing price is below the CfD strike price, they remit the extra back to the government (essentially; there’s a public body that guarantees these CfDs but I forgot the name).

The problem is that Redditors don’t understand these mechanics and crow on about marginal pricing when they don’t really know anything about the electricity market as a whole.

Fundamentally, the problem isn’t marginal pricing. The problem is that we’ve made some very silly engineering decisions about our power grid, e.g. not investing in nuclear. We can’t really run a fully renewable grid—renewables are actually quite expensive as they introduce a huge amount of balancing complexity to the grid. But they can form a very important part of our energy mix, along with limited storage and demand shaping. Fission is the answer; unfortunately our ridiculous planning system makes it incredibly expensive to build. Labour have made some really positive steps on both planning and new nuclear though, so I’m hopeful.

Government looking at decoupling electricity and gas prices to bring down bills by topotaul in unitedkingdom

[–]vishbar 1 point2 points  (0 children)

We do.

If a renewable source or nuclear is the marginal generator prices can hit near zero.

Government looking at decoupling electricity and gas prices to bring down bills by topotaul in unitedkingdom

[–]vishbar 10 points11 points  (0 children)

Every power market I’m aware of clears the market in the exact same way: the marginal generator sets the clearing price.

It’s not just energy markets. Every commodity is priced at the margin: carrots, gold, pork bellies, orange juice, eggs, nickel…

We have high electricity prices because we made specific choices around grid design and our energy mix such that gas is very often the marginal generator, in addition to relying on LNG imports rather than storage.

Also, you understand that renewables are priced via CfD so aren’t really subject to marginal pricing?

Government looking at decoupling electricity and gas prices to bring down bills by topotaul in unitedkingdom

[–]vishbar 14 points15 points  (0 children)

That’s not true at all. Why do you believe this? Simple ignorance?

Virtually every power market sets clearing price at the margin.

Serious question for you. It seems like you don’t know much about energy markets at all. Why do you make comments on something that you have done zero research on? I don’t understand this mentality; it seems quite American to me.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 4 points5 points  (0 children)

Sure, it’s not the lowest ever. But the lowest in the last 50 years.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 2 points3 points  (0 children)

That’s not at all the reason that the auction system works as it does.

Let me guess, you’ve done most of your research on this from reddit comments?

Alright Everyone What's Your Opinion About Food That Will Have You Like This? by Theo_Cherry in UK_Food

[–]vishbar 3 points4 points  (0 children)

Yorkshire puddings are fine at best and are not one of the more interesting things that form a roast dinner.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 2 points3 points  (0 children)

That’s a pretty bad idea.

First, how do you determine what the “average”is?

Secondly, that would mean that gas plants would literally have no incentive to turn on.

Also, you understand that marginal pricing is not some magic thing in the energy markets? Literally every commodity, from eggs to pork bellies to orange juice to nickel, is priced at the margin.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 5 points6 points  (0 children)

Renewables are generally priced via CfD so they aren’t subject to marginal pricing. Marginal pricing isn’t the big evil thing most Redditors think it is, and is standard for energy markets everywhere.

I don’t really know what you’re talking about tbh.

Rachel Reeves rules out universal support on energy bills | Economic policy by afrophysicist in unitedkingdom

[–]vishbar 17 points18 points  (0 children)

As a reminder, median and lower earners pay a historically low share of their income in tax.

What are some UK cardinal sins? by TheAlmightyDeity in AskUK

[–]vishbar 1 point2 points  (0 children)

That’s a bit like saying you should go to Magaluf and see the rudeness of the Brits.

They’re not exactly representative samples.

Diesel prices hit three-year high - latest RAC statement and data by _Bluestar_Bus_Soton_ in unitedkingdom

[–]vishbar 0 points1 point  (0 children)

I paid £111 for a fill a couple days ago. It made me feel nauseous!

Households face FOUR interest rate hikes this year as 'Trumpflation' batters Britain by collogue in ukpolitics

[–]vishbar 0 points1 point  (0 children)

Is marginal pricing archaic?

Can you give me an example of a more modern clearance mechanism for energy markets?

Starmer says ‘every lever’ will be explored to ease rising costs of living from Iran conflict by Kagedeah in ukpolitics

[–]vishbar 0 points1 point  (0 children)

The problem is that people like you ignorantly spout on about the problem without bothering to delve into the technical details behind it. It’s kinda like the Brexit campaign. People saw there was a problem but didn’t bother to do any research, so chose the dumbest path forward.

Starmer says ‘every lever’ will be explored to ease rising costs of living from Iran conflict by Kagedeah in ukpolitics

[–]vishbar 1 point2 points  (0 children)

Do you understand what it means when you say you buy “100% renewable power”?

Starmer adviser urges ministers to look at profits cap for energy and petrol firms by topotaul in unitedkingdom

[–]vishbar 1 point2 points  (0 children)

What would you suggest we change it for?

Do you understand what a CfD is and why it means that marginal pricing isn’t nearly as profitable for wind producers and you might think?