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Huge increase in wholesale gas prices.


adam2
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UK wholesale gas prices have increased very substantially and the current price is well over TWICE the previous record, and is about FIVE times the norm for this time of year. Discussing the reasons for this could take us into forbidden p0litical areas, but it is an observed fact that the increase has occurred.

 

In time retail prices of both gas and electricity will increase very substantially, gas prices might well double, and electricity prices increase by 50%. I would therefore urge that urgent consideration be given to reducing gas and electricity consumption in performance venues, and of course in ones home.

 

Several energy retailers have gone bust as they have to pay market prices higher than the retail prices they promised to customers. I expect more such failures.

 

Link to 5 year chart of UK gas prices.wholesale gas prices.

Edited by adam2
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That’s great and all, but what’s the relevance to us here?

 

It's relevant for anyone specifying equipment for their venue. The balance of upfront purchase cost vs ongoing overheads has shifted.

 

Gas provides quite a bit of electrical generation capacity (especially as backup/baseline for renewables) so there will be a knock-on effect on electricity prices.

 

 

The big question is whether this is a momentary blip that will be "corrected" (like the spike in container and shipping prices) or whether it's the new normal.

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That's great and all, but what's the relevance to us here? Is anyone still using gas to light their venues? Or is this an off topic post more suited to the Crew Room? ☺️

 

Disagree, whilst indoor gas lighting is indeed almost extinct, gas is the default choice for heating and hot water in many venues, especially those that are part of a larger complex such as a school, college, community center, or village hall.

Electricity is almost universally used for lighting and small appliances, and with a large proportion of UK electricity being generated from gas, substantial increases in electricity prices seem inevitable.

 

I therefore urge that heating systems be checked for correct operating and that time controls and thermostats are sensibly set. Electrical installations should be inspected for waste caused by inefficient appliances and equipment left turned on when not needed.

 

Since I posted the above, the converter station in Kent that is used to import electricity from France has blown up, 2 GW of imports lost until at least October, and 1 GW lost until next year. 2 GW is about 4% of peak UK demand or about 6% of average demand. This will tend to increase prices of both gas and electricity.

 

 

News report

 

Edited by adam2
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That’s great and all, but what’s the relevance to us here?

 

The news is of limited value in New Zealand -you've already had a minor electrical outage! BUT in the UK it's relevant especially for determining the costs of re-opening venues to performance and paying punters following shutdowns due to covid.

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This is interesting as more and more venues get rid of their "distributed electrical heaters"* and have to rely more on their gas-powered heating system.

 

* = Tungsten lighting. ;)

 

We found that we needed to upsize the boiler/furnace at a previous venue after we went LED, as we were missing 100KW+ of heating... The boiler was due for replacement anyway, but it was a shock that we had to go from a 850,000BTU/h model to 1.2Million.

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This is a very good point. We've just replaced our (comparatively) small tungsten rig with LED and the cast were remarking on how cool it was on stage.

 

One of them does work as a film extra, and he was saying that in the past, sound stages would often warm up nicely by about 10 a.m. but now they stay cold all day.

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That’s great and all, but what’s the relevance to us here? Is anyone still using gas to light their venues? Or is this an off topic post more suited to the Crew Room? ☺️

I did a little googling and the NZ comparison between 15/09/2020 and 15/09/2021 in wholesale electricity prices for North Island is as scary as anything I have seen and makes our day ahead volatility look boring. The reasons are complex but they affect the whole developed world equally and gas prices affect all energy costs.

 

While reading this earlier the gasman came to do the annual check on our relatively new combi boiler. He is 60 now and his gasman son is converting to electrics because by 2030 there is supposed to be a ban on gas boilers in Wales. We are heavily insulated with efficient boilers, radiators, windows etc but the new-build social housing up the road is Passivhaus, PV panel, battery pack and air source heat pump. In England they are already 15 years behind and are still selling social homes not building them. They really are in trouble.

 

I have no idea how this all pans out but swift and radical change is coming and whether theatre can survive in anything remotely like it's present form is debatable. Interesting times are coming.

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We found that we needed to upsize the boiler/furnace at a previous venue after we went LED, as we were missing 100KW+ of heating...

 

I remember reading about a venue (in a more temperate part of the world than the UK) where part of the justification for putting in an all-LED lighting rig was the savings in air conditioning plant compared to conventional tungsten.

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Since I started this thread, gas prices went even higher and have now moderated a little. Todays price is still about double the previous peak.

 

This may represent the "new normal"

 

The previous peak price was 82 pence a therm and was only for a day or two. This peak is far higher and has already been higher for much longer. The price has been over 100 pence a therm since July 28. Very substantial retail price increases seem certain for both natural gas and for electricity which is largely produced from gas.

 

Even a fixed price tariff offers no protection if your chosen supplier goes bust, as several already have.

 

I would again urge that urgent attention be given to energy efficiency in entertainment venues and other workplaces.

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  • 2 weeks later...

This has not gone away and has indeed worsened.

UK wholesale natural gas is now trading at THREE times the previous record and at over SIX times the normal price for the time of year.

 

Many gas and electricity retailers have gone bust, and more are expected to fail in the coming days. At least one "major" energy supplier are reported to be in trouble.

 

D0m3stic gas and electricity consumers are protected against market prices for now, but businesses may have to pay a market price.

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