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Comment by bionade24 | Hacker News Reader

For the heating BHKWs (Blockheizkrafwerke) of many cities in Germany it's still cheaper to run on gas than switch to burning oil. Since the communal industry are legally structured as companies, the mayors aren't allowed by law to switch to oil if it is more expensive, even though it could ease the shortage.

In Poland, coal prices absolutely skyrocketed because Russian coal isn't available anymore & consumers directly interfer with the market.

Relatively, Gas is still cheap. If people all would switch to electric heating quickly, electrity prices would go up proportionally because we would need to buy more form neighbouring countries in close-border regions to keep the network stable.

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In the EU the electricity price is pegged to the price of natural gas. This results in a lot of weirdness, such as the price of solar and wind power energy being the result of what natural gas costs, even though they have nothing to do with each other.

No (at least in Germany, can't speak for whole Europe) the price is settled by the most expensive electricity producer currently serving. Gas power plants are used regularly to stabilize the network, but they didn't drive the electrity price that high because Germany has way more gas power plants than usually necessary. Only the modern ones were used.

This year though, since France struggles so hard with their nuclear power plants, gas power plants are running 24/7, even older, less efficient ones.

This led to the price of electricity determined by gas power plant operation costs all day.

> the price is settled by the most expensive electricity producer currently serving

That seems even more broken. The annoying thing is that the case for renewables is polluted by these kind of price fixing measures.

The price set is the marginal price for the last MW of capacity required (which is the most expensive one). No other way to do it I guess: if you give the cheaper producers less than the most expensive ones, they have the economic incentive not to supply until they get the higher price.

A cost+ model would make a lot more sense in a situation like that.

Then all the cheap producers would be ‘down for maintenance’. Enron did a lot of tricks like that.

I highly doubt that would fly in the EU. Privatization always was 'at arms length', piss off enough bureaucrats and I'm pretty sure you'd find yourself nationalized pdq. Telcos have had the sharp end of the stick pointed at them a couple of times now and have each and every time folded rather than to see how sharp it really was, I don't think energy companies would fare any different, especially not because energy is more or less a first level need and telco services a second or even lower level one.

They figured out Enron too, after tens of billions worth of damage. Didn’t stop them.

I do agree that the EU isn’t likely to be hands off enough to ever let it get to that point though. It was a particularly dumb set of regulatory decisions that let/encouraged Enron to do what they did.

But market forces are powerful motivators.

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