Patrick Cassels

Head of Network Commercial at SSEN Distribution. I follow interesting people in energy & technology, and occasionally offer my views.

[Patrick Cassels @patrickcassels]

I think the root cause of most of the incoherent policy in this space boils down to the clash between the role for more centralised strategic planning vs price signals/markets driven response, and what 'fair' and 'efficient' charges for the network look like under each. Charges can't be designed sensibly without clarity on what they are there to achieve alongside other policy tools like flex services, connection charges etc. A core part of UoS will always have to be to recover the network allowed revenue for any given year.

[Patrick Cassels @patrickcassels]

I think the challenge is once the network has been built, it should be utilised (as there is minimal extra cost), right up to the point of further investment being triggered. Expansion/reinforcement is where there should then be a strongly cost-reflective signal, and conventional wisdom said this is where connection charges had more of a role to play (before these became 'shallow').

[Patrick Cassels @patrickcassels]

@Adam_Grant_Bell @SuperAggo Worth remembering also that IDNO revenues are pegged to DUoS... To the extent that DUoS is not cost reflective, and influenced by social policy, IDNO revenues aren't cost reflective eother. A fundamental review is long overdue, but major DUoS reforms would surely be the trigger.

[Patrick Cassels @patrickcassels]

The challenge is how to calculate dynamic DUoS. It's simply not the right policy tool IMO. How would you set the price in any given moment? Industry doesn't like ex-post dynamic charging (i.e. TRIAD style "it'll be in the mail" charges, but all the time!), and administered, dynamic, ex-ante charges seems like a terrible combo versus market based alternatives. The behavioral assumptions on which network use/pricing is set will be reliably wrong as the market responds to the totality of price signals.

[Patrick Cassels @patrickcassels]

@Adam_Grant_Bell Many small providers do this routinely and unchallenged, under the radar. Batteries have a v important role to play in helping constraints, but we need an industry conversation about how to signal this properly, as too many are happy to earn revenues based on false value signals.

[Patrick Cassels @patrickcassels]

@Adam_Grant_Bell There is a version of this which is not helping the system with constraints at all - it's being paid to 'solve' a problem that you are deliberately creating. This is pure value extraction from the system via a (broadly socialised) BSUoS charge, which consumers pay for.

[Patrick Cassels @patrickcassels]

@g__j @agrinick @fredsirieix1 @OctopusEnergy Thanks. Price cap issue makes sense. But fixed costs surely factor somewhere? We're all still paying for network built to serve us in the 80s (pre-privatisation) depreciated over 40yrs. All unit rate creates bad incentives & fairness Qs, as reducing usage won't reduce those costs

[Patrick Cassels @patrickcassels]

@g__j @agrinick @fredsirieix1 @OctopusEnergy Isn't it entirely up to suppliers how standing charges are passed through though? i.e you could convert to an equivalent unit rate with no standing charge? If I'm wrong, what prevents that? Genuinely curious what I'm missing. Is it just that consumers wouldn't choose this tariff?

[Patrick Cassels @patrickcassels]

@OVOEnergy @SchmeichelGoram This isn't quite right. Ofgem's price cap charts show elec and gas networks are around 7% of the bill from Jan - Mar 23, and 11% (due to falling wholesale prices) in Apr - Jun 23. Suppliers can levy this on standing charge or unit rate - it's their choice! https://t.co/NESUG1cKI2

[Patrick Cassels @patrickcassels]

@leccy_bill Thame seems to be on the boundary of three DNOs! UKPN driver mentioned a long drive to the most northwesterly part of the patch...

[Patrick Cassels @patrickcassels]

@Adam_Grant_Bell Don't forget all the extra technical requirements under Grid & D Codes, including from the RfG bandings. The 50MW hard edge is baked in across codes in all sorts of unhelpful ways. It has been driving silly clustering at an arbitrary point for far too long. A personal bugbear.

[Patrick Cassels @patrickcassels]

@GamersNexus Speaking of longevity, 1080ti is the best purchase I've ever made. Still going strong at 3440x1440 five and a half years later.

[Patrick Cassels @patrickcassels]

@GamersNexus Pricing is a major issue, but there are people out there prepared to pay (inflated) halo product prices for bleeding edge performance. My issue is the mid product stack pricing... Also no DP2.0 on the 4090 makes it hard to justify for enthusiasts who want a bit of longevity

[Patrick Cassels @patrickcassels]

@L__Bow @heatpolicyrich Can't 'design' away the intersection of supply and demand cost curves. Cheap, plentiful low carbon generation is the only LT solution to displace gas balancers.

[Patrick Cassels @patrickcassels]

@L__Bow @heatpolicyrich Currently complex, inaccessible & signals are polluted by well intentioned policy costs that focus too much on short termism... and push prices up. Stability & clear vision have high value.

[Patrick Cassels @patrickcassels]

@L__Bow @heatpolicyrich Personal view is v hard to see how this is practically achieved - what does it mean? Opportunities for overhaul relate to fundamentals. Simple, level & accessible market based playing field for balancing & ancillaries.

[Patrick Cassels @patrickcassels]

@heatpolicyrich @L__Bow In GB, you just bid/offer at the price you'd be happy with & that's what you get if activated. Gas balancers drive up price because they're the marginal plant & expensive. Not because of marginal pricing principles (which are just a feature of the free market).

[Patrick Cassels @patrickcassels]

@heatpolicyrich @L__Bow Spotted this one & fear I may be the friend! Maybe missing context is we were chatting about the Balancing Mechanism, which is pay as bid. Early in gas price crisis there was confusion about GB vs continental European challenges, where pay as clear balancing is more commonplace.