Will this finally decrease some of these bills? Or will this just mean even more record profit for the energy companies?
If you believe that I have a monorail to sell you! Why pass onto consumers what you can take as profit.
Norwegian news is reporting that the price of electricity will increase a tiny amount (about £10-15 a year) in both Norway & the UK as an increased flow of power means more bidders for it, pushing the price up when power is scarce (which seems to be most of the time).
https://www.nrk.no/sorlandet/ny-kraftkabel-kan-fore-til-dyre...
Because other suppliers will outbid you.
>Norwegian news is reporting that the price of electricity will increase a tiny amount (about £10-15 a year) in both Norway & the UK as an increased flow of power means more bidders for it, pushing the price up when power is scarce (which seems to be most of the time).
That doesn't make sense, if energy is scarce in one country but not the other then the additional supply should lower prices.
With Denmark able to buy 1GW this will increase demand at the cheapest bits (when supply is high), but with Denmark able to sell 1GW it will increase supply and thus drive lower price.
The majority of people in the UK don't pay market prices for electricity and instead pay a government set "cap" which is based around hiding the actual cost in the marketing material because far too many people in the UK don't understand what you can do with 1kWh or how it affects your bill - some people on think that turning 30W of LED lights off makes a material difference to the monthly cost they pay for example.
I understand that, the market is trying to deal with an inefficiency in the system. What I don't understand is how removing those inefficiencies will lead to higher prices. If anything it should do the opposite.
The cap is incidental, I don't like it but it doesn't really have much to do with this.
If the cost in the UK is 5p/unit and in Denmark is 7p/unit, the price will stabilise at 6p/unit as the UK sells to Denmark, decreasing UK supply thus pushing price up
If the cost in the UK is 42p/unit and in Denmark it's 40p/unit, the price will instead by 41p/unit as the UK buys more from Denmark, increasing supply, thus pushing the price down
The cable works both ways.
Having an inter-connector opens the market to a larger pool of suppliers on both sides of the cable. You would expect this to lower prices rather than increase them.
That's about 15p per month per household