It will lower the peaks of the prices, but at the same time increase the depths. Currently those on market driven tarrifs can sometimes get paid to take electricity, and certainly have low prices. For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh
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.
>For example Octopus Agile is charging under 5p/kWh from 2230-2300 today, and from 0600-0630 actually paid its customers 4p/kWh
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.
It increased the demand from 2230-2300 (assuming Denmark either has higher demand at that time, or could itself export to Germany)
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
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.