The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity.
Once built, the cost of generating power from renewables is very low, so these typically come in with the cheapest bid. Nuclear might come next.
Gas generators often have the highest costs, because they have to buy gas to burn, as well as paying a "carbon price" - a charge for emissions.
The wholesale cost is set by the last unit of electricity needed to meet demand from consumers. This means that even if gas only generates 1% of power at a given time, gas will still set the wholesale price.
Gas in the UK is expensive because the Tories spent decades selling off the storage so developers could turn them into real estate. This continued well into the 2000's when, for example the lettuce (Truss) closed the Rough storage facility in 2017.
Gas in the UK is expensive because of 1980's privitisation. Another one of the Tory's great ideas. The UK privitisation model is designed to generate profit. Norway made a different choice. Equinor is majority state-owned, and Norwegian extraction operates within a framework designed to capture resource rents for public benefit. Britain privatised its way out of that option decades ago in the Thatcher-era and has never seriously revisited it.
Analysis from the University of Oxford[1] found that maximising oil and gas extraction from the North Sea would only save households £16 to £82 per year – and this would rely on tax revenues collected being distributed to households to offset their energy bills.
Dr Anupam Sen, co-author of the analysis, said the idea that “draining” the North Sea would make the UK more energy secure and significantly cut household bills is “sheer fantasy”. “We show that regardless of the remaining lifetime of North Sea oil and gas, a ‘drill baby drill’ approach to extraction would actually cost households more money versus continuing on our path to clean energy.”
The authors stress that savings gained from the clean energy transition are recurring annual reductions in bills which would continue indefinitely, whereas North Sea oil and gas are finite resources that would run out around 2040.
Exactly, and the Tories banned onshore wind, and refused to really invest in offshore wind. We've got the North Sea and its perfect for wind farms we should have had for decades
They didn't refuse to invest in offshore wind. Tories were the ones who started this ball rolling in the mid-2010s by breaknecking the removal of non-renewable energy production without any clear plan.
The issue with offshore wind is that it isn't always windy. If you look at modelling with energy system with a high proportion of offshore wind, you need other sources of energy which often isn't factored into the economic return of the original investment.
We are doing this because, for some reason, we have decided there is political capital in paying out these huge subsidies to large companies to produce expensive energy. I would think that would be obvious when the UK has extremely high electricity prices and renewable production is very high...where do you think the money is going? It is going to subsidise inefficient and expensive supply.
Also, one of the primary issues with the UK is that the political system heavily incentivizes people to blame "the other side" for these issues. The Tories were extremely aggressive in moving towards green energy but people who vote for Labour, because they support green energy, will have to believe the opposite. There are other posts on this chain that also blame the Tories for things that didn't happen. In this system, it is very hard for anything good to happen and is how you end up with someone like Starmer who appears to have almost no opinions on anything other than staying in power and keeping the gravy train going for the lads. Not serious. Expect things to get significantly worse.
Our electricity prices are much higher than anywhere else. I remember reading research last year that the cost of government intervention in so high that if gas prices tapered to zero, electricity prices would not fall. It is going to get much, much, much worse.
The current government is banning wind turbines factories and billions of Pounds in investments because "China". It is too easy to blame the previous government(s) when the current one has no strategic thinking or plan, either.
> Presumably because the price is a volatile, and storage gives you more flexibility around when you buy.
I will give credit to the person who got there before me. :)
Smoothing out price volatility is a big one.
But also it gives you options:
You can buy it "today" when its cheap and store it for when you need it (e.g. winter months).
You can also trade on that basis too. For example you can make a future-dated commitment to buy gas (knowing you have the storage available to take delivery). But if the situation changes and you later find you don't need it, you can sell that contract to someone else (or you can still take delivery and re-sell it). But you can't do any of that without having the ability to take delivery, because the person who sold you that future-dated contract will want both your money and to get the gas they sold you off their hands.
Because if you have enough renewables and storage to eliminate gas from the mix you are no longer paying gas prices. The more often that happens, the cheaper your bills get.
There is no international market for gas because export/import is physically complex. This is why gas is priced very differently despite it being chemically similar (unlike oil). Anyone who says anything different should be immediately disregarded as someone who should not have an opinion.
This is technically true for oil but there are two other factors. One, importing oil is environmentally-intensive and relies upon the assumption of free and open trade in oil...hopefully, the last few weeks have demonstrated why this is untrue. Two, the assumption is that mix of imports is not changing, because of high energy costs and reduction in North Sea production, UK refineries are shutting down so we are completely losing domestic capacity across the whole space. We aren't importing oil, we are importing refined products, losing domestic chemicals capacity, losing margin. Lower jobs, lower tax revenues, more reliance on imports.
The above take would be somewhat funny if we weren't ten years into seeing the consequences of this. At this point, we could be back to the stone age and you would have the same people screeching that inventing fire is dangerous (I worked in equity research in the mid-2010s...I remember when Cameron was really pushing hard for this, Clegg was saying how expensive nuclear is, etc. people in the industry were saying this would very badly...the issue is that the political cycle is far shorter than the economic cycle, all of this stuff is obvious but people in the UK run on the political cycle so if it isn't the newspapers, no-one normal reads them, next week then it will never happen...same issue with housing, exactly the same thing happened, we are now subsidising retail electricity which is impossible to get out of, I remember specifically this idea was thought of as an insane impossibility but producers were saying it would have to happen, and giving huge subsidies to producers...this is all obvious, obvious things happening are obvious, producers were fine, they get paid the subsidies but consumers are getting shafted AND consistently voting to get shafted).
Also, Roughs storage facility is in the sea...so I am not sure what "real estate" development was done here (the UK has been building 10-20% of the required growth in housing stock for something like two decades...again, the same people will be screeching about developers if we lived in caves). The reason it was closed was due to economics.
For some reason, you deny that producing more gas would be useful but are outraged at a storage facility closing when the primary function of a storage facility is to allow energy producers to arb derivatives markets effectively. I have no idea how this makes sense to you based on all of the above...perhaps you just want to complain about the Tories? I have no idea.
The current tax rate on North Sea production is 75%, there was ample opportunity for public benefit but multiple governments took that money and spent it on benefits. The reason why Norway has worked is because they incentivized exploration (again, something that you imply later would have no benefit...but okay). The policy of the last fifteen years has been to tax the industry heavily and disincentivize exploration. Revisiting this approach is extremely unpopular amongst all politicians which is why production has dropped. Even with this limitation, we have large gas fields that have been blocked (by the Tories btw) for environmental reasons.
This isn't complicated: if you want more oil and gas, produce it and create more incentives to produce it. The reality is that people want to have their cake and eat it: North Sea production is both very pointless but paying huge amounts of carbon to import from the Middle East is a good idea and we have to pay subsidies of 30-40% electricity bills to subsidies green production...which is also very profitable but requires subsidies because of Tory developers or something.
The UK isn't a serious country. What is happening to the UK is a reflection of phenomenally poor political leadership. It is deserved.
> paying huge amounts of carbon to import from the Middle East is a good idea
You are wrong here.
UK oil has a very high carbon footprint.
British North Sea oil is sour (high in sulphur). It is the "wrong" type of oil for UK refineries. So it gets sent to other countries around the world for refining.
UK oil is viscous, waxy, crude which needs to be heated to pipe it. This means it takes a lot of energy to pipe (hello carbon footprint !) and it is not compatible with UK refineries anyway, so it has to be moved overseas (hello carbon footprint !!).
UK crude is nothing like Norwegian crude and massively different from the stuff drilled in the Middle East which requires barely any refining in comparison.
I already gave the answer in my original post.... UK crude is the wrong type of oil for UK refineries.
Almost all UK refineries were built back in the day (late 60's/early 70's), before North Sea, when the UK was mostly importing oil from Libya and elsewhere in that region.
All the stuff from Libya and elsewhere is far removed from the viscous, waxy sludge that emerges from the North Sea. It requires a far less intensive refining process.
So if your refinery has been built for a low-intensity process you can't just bolt on the shit-ton of high-energy stuff required for waxy crude.
The UK (and Europe) could produce much more gas and consequently control prices if they wanted. It is easy to always blame the previous government(s) but the current situation is policy across Western Europe.
Edit: puzzled by the blunt downvotes for stating a noncontroversial fact. Over the last 15 years the US has invested in shale gas while the UK and EU have banned it. Even today the UK refuses expension of North Sea gas extraction. Whatever the reasons (environment, decarbonisation) it does mean that the situation we have now with gas across Western Europe is policy, not an unfortunate consequence of world events...
To be fair, I think you would be hard pushed to find anyone outside Israel who seriously thought Iran would ever be on the cards.
Netanyahu dedicated 40 years of his life going to various US presidents trying to get their buy-in. The US presidents all clearly listened to what their advisors had to say regarding Hormuz etc. and said "Thanks, but no thanks" to Netanyahu. Then Trump came along who was ready to over-rule his advisors and surrounded himself with yes-men in his cabinet.
I'm not being political here. A lot of it is public, for example just go to YouTube and look up the decades of videos of Netanyahu visiting the UN or US repeating the same line about "Iran being weeks away from a bomb", almost word-for-word for the last 40 years.
No, this has nothing to do with either. It is policy in the UK and EU not to produce gas on environmental and decarbonisation grounds, and so in fact high priced are policy.
Yeah I'm in the UK and for electricity, I'm on the green Octopus Agile tariff, which tracks the wholesale price updating every 30 mins. Given the abundant green energy today, and peak times between 3-7pm, right this second I'm paying £0.02/kWh, but at 6pm, I'll be charged £0.40/kWh. In the coming months with gas supply reduced, and consumer demand steady, it will have a knock on impact to me given it tracks wholesale cost so I'll have to consider moving off the tariff given I'll be paying more overall.
California is a great example; highest electricity prices in the US (not counting Hawaii, which makes sense) despite significant hydro and fantastic solar capacity. In the last few years California runs 100% renewable on many days (and growing) every year.
Economics 101: prices are not set by what goods cost to create + markup. Prices are set by how much people are willing to pay.
Why is it "people are willing to pay" and not "corporations are brazen enough to charge"? These utilities are necessities and relatively few people have access to cheaper alternatives to them.
Because, under usual circumstances, self-interested corporations compete against each other to get as close to what people are willing to pay for energy as possible.
I know nothing about California so please correct me if I'm wrong.
You mention significant hydro and solar capacity in California. So minimal carbon externality: lung disease and climate change. If you consider that externalised cost into the cost of electricity elsewhere, does not California and other renewable-rich electric grids fare more competitive on price?
E.g. the problem is not the expensive renewables in California, rather, the problem is that the cost of declining human and animal health and climate change is externalised for the fossil fuel.
According to the official tracker (https://www.energy.ca.gov/data-reports/clean-energy-serving-... and elsewhere) there were 279 days in 2025 where California was on 100% renewable for _some_ time during the day (could be hours, could be minutes at mid-day).
In total hours equivalent of 77.3 full days over 2025.
Which, importantly, drives more renewables and storage development because it makes the renewables fantastically profitable to run: near zero cost for you, but paid the price set by gas.
You can read more about gas markets in the Global Gas Market guide by A115 here: https://a115.co.uk/global-gas-market/ (you can download the PDF guide at the bottom without giving any information)
They aren't orthogonal - the reason that gas is being used is because renewable can't reliably power the grid! If you look at something like https://grid.iamkate.com/ you can see that in the last 24 hours the gas peak is when the wind dies down and the sun isn't shining, around 6-8pm. Happens to be a real price peak at that time. This isn't some weird and unexpected outcome, we've had at least a decade of evidence with this sort of low-wholesale-high-retail price dynamic.
That isn't gas is expensive, it is simply policy that the UK, rather naively, is trying to run their grid 24/7 based on processes that are not available 24/7. That is an expensive trick to try and pull off. Poor people need a way to signal that they won't use electricity in the evening if they want to be able to afford power is my read on the situation. Not very civilised but if that is how the UK doesn't think reliable cheap energy is a target then it seems the most reasonable outcome.
Seems like a very good case to get storage and power backup in people's homes. Industrial users could install their own gas fired generators. Residential consumers could have simple battery based backup, or even a generator which would double for helping during powerouts.
I've read this before and I don't understand how this doesn't become/is untenable.
Doesn't this mean that solar/wind are insanely lucrative?
Also, this would mean that in order to really bring the price down, gas needs to be taken out as a source. But gas is typically the source that balances the grid because its output can be changed quickly. So price wise, you might get a drop but you would lose your ability to react quickly to fluctuations in demand
> Doesn't this mean that solar/wind are insanely lucrative?
I used to work in wind energy in the Netherlands, it is only profitable there due to government subsidies. It was/is an enormously complicated system to understand on the whole. I was on the environmental impact side (visualizations) during the permitting process. It's high-risk & enormously expensive during the permitting process (i.e. getting permission to build the wind farm), and beyond that I understand it's a bidding process and again, super complicated on the energy trading side once you're operating. My experience was that the wind farm operators seemed to be doing well financially, but insanely lucrative? I'm not sure about that vs. non-renewables. Everyone I worked with (including myself) believed in green energy as a part of a larger mission to make the world a slightly better place. EU directives on renewables is what pushed the mission forward; the dutch on the whole (surprisingly), do not love wind turbines in their back yard.
> Doesn't this mean that solar/wind are insanely lucrative?
This is how markets are supposed to work. It provides an economic incentive for production to increase, which is what we want.
Consider what happens if you develop a farming method to produce potatoes for a fraction of the usual cost, but you can only meet 10% of total demand at your local market. What price are you going to sell your potatoes for when you show up to the market? You (like any free market seller) want to maximise your return, so you'll be able to sell for a fraction under the previous market rate, undercutting everyone else. Your farming method would be extremely lucrative.
Yes, but here’s the thing: you don’t have a monopoly over your potato farming method. Lots of new farms are built, and the more that do, the more the average price of a potato drops. Your expected return starts to drop. Yours - and everyone else’s - profit margins get squeezed.
Investors begin to refuse to build new potato farms because a return on their investment gets worse whenever anyone decides to build a new farm.
But the people need potatoes and more potato farms! The government issues an incentive scheme to guarantee a minimum price for each potato sold. Potential farm owners bid against each other for the lowest price, but it means they can build a farm and expect to break even.
Sure, but those same free markets will happily see those expensive producers go out of business. In the electricity scenario, that would mean blackouts.
If you triple the price, you don't have a new gas plant appear out of thin air. And the result won't really be lower consumption either, because most people would have fixed rate contracts (not in the UK so don't know specifically, but this is very common elsewhere)
Yes, and I think that’s actually intentional, they’re rewarding renewables way over the odds without needing to give politically controversial benefits. The rewards are just an inherent result of the existing system. This is why renewables are growing rapidly in the uk.
Of course we’ll need a way to resolve fluctuations both rapid and slower. Rapid fluctuations are handled by pumped hydro and increasingly by batteries.
The slow fluctuations (day/night all the way to summer/winter and good/bad weather patterns) are much trickier, I think it’s still unclear how well handle them, but it will certainly be partly handled by having an excess of renewables, though we’ll likely need some other solutions too, nuclear is probably one of them.
The irony is that your comment should be entirely inverted. Renewables are not rewarded way over the odds - in fact the ruling party banned onshore wind entirely and i remember them banning at least one offshore wind farm. Luckily it is very cheap to build.
Now Hinkley Point C is another story. It's a hugely expensive boondoggle which is taking decades to construct at enormous cost and the reward at the end is that they are rewarded with a strike price that is 3x that of solar and wind. That is an obsecene subsidy forced on to customers for a power source that cant even do load following and doesnt help with fluctuations in supply and demand.
The slow fluctuations on cold, windless nights are going to be managed with gas.
Maybe one day gas synthesized with electricity from solar+wind overproduction on a day like today. The roundtrip is expensive, but will still be cheaper than nuclear power on a windy, summer day.
Not only is it insanely lucrative, but the government enters into "contract for difference" contracts that guarantees a price per MWh that are generally above market rates, taking out most of the financial risk.
> The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity.
Without mentioning how Contracts for Difference (CfD) works, this is a slightly disingenuous oversimplification.
You can have dispatchable gas without that pricing structure, but having a grid without that pricing structure can't really function without major nationalization of power generation.
Marginal pricing is one of those things that at first sounds crazy, but when you delve into the topic, it's the only sensible way to have market pricing on electricity generation. The only real alternative would be a fully nationalized grid where the government buys up all the dispatachable power sources.
I know less about the UK's electrical grid, but at least in Germany, if renewables plus batteries are enough to cover electricity needs for normal day-to-day weather, there is more than enough biogas production in the country to save and store that biogas for the weeks-at-a-time periods where renewable shortfalls happen and batteries won't be enough to cover it.
On any given day Germany generates 7-8% of its electricity from biogas, which means that if instead of burning that gas each day for electricity, we stored it in our network of gas reservoirs, then every 13 days of the year that we don't dip into those reserves, that's a full day of electricity generation in gas that's stored.
____
Even if this is done with fossil-gas instead of biogas though, simply having enough renewables + batteries to cut gas out of day-to-day electrical generation, and using it only for backup would be enough to drastically lower prices for the majority of the year.
This is Telegraph for you.
The cost of electricity is not driven by green levies or net zero targets, but by gas prices, as gas is a backstop when all other sources are exhausted. Therefore electricity prices are pretty much ties to gas.
The title may be misleading, but IMO not for the reasons you mentioned. "90%" is based on generation right now, live. On the site from the post you can see that for the last day (24h) renewable generation was 66%, for the last week 46%, for the last year 42%. So it's nowhere near 90% renewable in general, but it is 90% at the moment (there's sunlight and good wind). Emissions on the website from the post are lower than on the website you linked - 107 g/kWh for the week, 124 for the year - but I don't know why that is.
Because nuclear. Which is a great 20th century French achievement !
If the EPR2 doesn’t spiral into costing £17.5bn per unit as the UK-PWR has, perhaps we can get them in to “rustle me up a nuclear power station” or two, in the words of Tony Blair.
Yet still it costs several pounds a day to heat your home in winter. People are going back to log burners. I've never seen so much coal/wood sold at the supermarkets during winter. I've got some electric blankets which is great but really energy costs seem to be spiralling.
Somehow? It’s a well established and publicised fact that it’s due to the price of gas. It’s so well established that anyone posting a comment here about the high price of electricity without mentioning it has an ulterior motive.
It's also widely misunderstood. Just because the spot price of electricity is set by the price of gas doesn’t mean the consumer pays that price for all of their electricity.
A lot of wind and solar are on Contracts for Difference. That means when market prices go above the agreed level, the generator pays the difference back through the scheme, which reduces supplier costs rather than the generator simply keeping the whole windfall.
This is particularly relevant when e.g. the price of gas goes way up due to the Iran war, it doesn't mean that the consumer ends up paying more for the energy from wind
It's not only the price of gas but also the price of the co2 emissions. I'm really surprised the uk didn't get rid of it when they left the eu. It's one of the most stupid things possible. It only makes everything more expensive.
That would make British people less poor for once so they decided against it. Managed economic decline and mass immigration go hand in hand with globalism and ‘global warming’ extremists.
So who's working on fixing it? It's not like "the price is fixed to the price of gas" is some iron law of nature. Meanwhile you have folks seeing these three things together:
- England is 90% renewables
- Renewables are a really cheap source of energy.
- England has very high energy prices.
And the obvious conclusion is that someone is lying. It's eroding support for renewables among those that don't have time to investigate how or why the spot price of gas sets the overall energy price.
The thing is, it's nowhere near 90% in general. 90% is the generation right now, with sunlight and good wind. On the site you can see that renewables were 66% in the last 24h, 46% in the last week, and 42% in the last year. I don't think it's possible to have 90% renewable generation overall without massive energy storage.
>It's not like "the price is fixed to the price of gas" is some iron law of nature.
It kind of is.
Gas is the only source of electricity currently which can be scaled up and down at will and on demand.
Even once grids eventually go 100% green we will probably still use (green, synthesised) stored gas as the power source of last resort on cold, windless nights after batteries and pumped storage have been depleted.
If you’ve got even a passing interest in the UK energy market you’d know this is because of the wholesale price of gas, not the actual wholesale cost of solar and wind.
If you really want to pay less for green energy, which is cheap when it’s plentiful (like anything) get on a variable tariff and install some storage.
Stop seeing this through the eyes of a consumer. On a macro scale, your country is not handing hundreds of millions of pounds a day over to other countries. Now imagine if it still was. You'd be even worse off.
Almost every normal person sees this through the eyes of the consumer because paying the electric bill is their primary interaction with the issue. What you're describing is politically a tough sell.
This is a 'lawyer-worded' headline.
I am an enormous fan of renewables, I am an electrical engineer who designs control systems for renewables exclusively. My career depends on renewables.
Headlines like this do nobody any favors. The problem with renewables is that you cannot run a grid on renewables alone. Many days will have an abundant oversupply, like the day shown. Many days will not. Consumers are not tolerant of brownouts in the west. We need pump storage hydro, we need massive improvements to the transmission system, and we need battery storage plants (in that order).
Its fine to celebrate days of high renewable GW output, but people get out the GW Bush 'mission accomplished' banners a little early. The generation is the cheap and easy part. The rest is expensive and slow and needs way more focus than it's getting if we ever want to make progress in the west (China is already figuring it out)
Well, in the sense that it's possible to be eating zero calories in the time between meals. You still need the meals. If you're just looking at brief snapshots, it doesn't tell you much.
Isn't pumped hydro severely limited by geography in many places?
I'm hoping for some other technology apart from pumped hydro or batteries to be used for capturing surplus renewable energy for later use. It's unfortunate that hydrogen seems to be too complex to handle at these scales, it'd be utopian if it wasn't and the excess of renewables could be transformed into hydrogen for use in turbines instead of nat gas...
And thats not how good renewables are- thats how deindustrialized britain has become. And deindustrialization leads to debt slavery - and debt slavery either leads to passing on that bitter chalice to others (empire) or to becoming a colony.
As you denindustrialize, your normal working class population rebells - demanding its lifestyle to remain untouched- thus subsidized by the state. So the state either prints money costing the world (us-model) or it prints money- costing the future. As this happens and future generations get poorer- the idea to lend from foreign "investors" which then take over your country becomes the default solution - until you are a debt colony, owned by those lending you money.
> Britain paying highest electricity prices in the world for second year running
> Ed Miliband’s net zero targets are facing fresh scrutiny after Britain was found to be paying the highest electricity prices in the developed world.
> New data published on Tuesday showed the price paid by UK industry for power was 63pc higher than in France and 27pc higher than in Germany.
> Britain is also the second-most expensive country in the world for household electricity, with billpayers paying twice as much as those in the US.
https://www.yahoo.com/news/articles/britain-paying-highest-e...
Yes. But these things can be orthogonal. Or actually brcause gas is expensive.
https://www.bbc.com/news/articles/crkep1vx3mro
The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity.
Once built, the cost of generating power from renewables is very low, so these typically come in with the cheapest bid. Nuclear might come next.
Gas generators often have the highest costs, because they have to buy gas to burn, as well as paying a "carbon price" - a charge for emissions.
The wholesale cost is set by the last unit of electricity needed to meet demand from consumers. This means that even if gas only generates 1% of power at a given time, gas will still set the wholesale price.
> Or actually brcause gas is expensive.
Gas in the UK is expensive because the Tories spent decades selling off the storage so developers could turn them into real estate. This continued well into the 2000's when, for example the lettuce (Truss) closed the Rough storage facility in 2017.
Gas in the UK is expensive because of 1980's privitisation. Another one of the Tory's great ideas. The UK privitisation model is designed to generate profit. Norway made a different choice. Equinor is majority state-owned, and Norwegian extraction operates within a framework designed to capture resource rents for public benefit. Britain privatised its way out of that option decades ago in the Thatcher-era and has never seriously revisited it.
Analysis from the University of Oxford[1] found that maximising oil and gas extraction from the North Sea would only save households £16 to £82 per year – and this would rely on tax revenues collected being distributed to households to offset their energy bills.
Dr Anupam Sen, co-author of the analysis, said the idea that “draining” the North Sea would make the UK more energy secure and significantly cut household bills is “sheer fantasy”. “We show that regardless of the remaining lifetime of North Sea oil and gas, a ‘drill baby drill’ approach to extraction would actually cost households more money versus continuing on our path to clean energy.”
The authors stress that savings gained from the clean energy transition are recurring annual reductions in bills which would continue indefinitely, whereas North Sea oil and gas are finite resources that would run out around 2040.
[1] https://www.smithschool.ox.ac.uk/news/drill-baby-drill-appro...
Exactly, and the Tories banned onshore wind, and refused to really invest in offshore wind. We've got the North Sea and its perfect for wind farms we should have had for decades
They didn't refuse to invest in offshore wind. Tories were the ones who started this ball rolling in the mid-2010s by breaknecking the removal of non-renewable energy production without any clear plan.
The issue with offshore wind is that it isn't always windy. If you look at modelling with energy system with a high proportion of offshore wind, you need other sources of energy which often isn't factored into the economic return of the original investment.
We are doing this because, for some reason, we have decided there is political capital in paying out these huge subsidies to large companies to produce expensive energy. I would think that would be obvious when the UK has extremely high electricity prices and renewable production is very high...where do you think the money is going? It is going to subsidise inefficient and expensive supply.
Also, one of the primary issues with the UK is that the political system heavily incentivizes people to blame "the other side" for these issues. The Tories were extremely aggressive in moving towards green energy but people who vote for Labour, because they support green energy, will have to believe the opposite. There are other posts on this chain that also blame the Tories for things that didn't happen. In this system, it is very hard for anything good to happen and is how you end up with someone like Starmer who appears to have almost no opinions on anything other than staying in power and keeping the gravy train going for the lads. Not serious. Expect things to get significantly worse.
Our electricity prices are much higher than anywhere else. I remember reading research last year that the cost of government intervention in so high that if gas prices tapered to zero, electricity prices would not fall. It is going to get much, much, much worse.
The current government is banning wind turbines factories and billions of Pounds in investments because "China". It is too easy to blame the previous government(s) when the current one has no strategic thinking or plan, either.
High prices and maximum rent extraction is the plan. Same plan as the Tories and everyone else who gets close to power.
Why would additional storage make a significant difference to the price of gas?
Presumably because the price is a volatile, and storage gives you more flexibility around when you buy.
> Presumably because the price is a volatile, and storage gives you more flexibility around when you buy.
I will give credit to the person who got there before me. :)
Smoothing out price volatility is a big one.
But also it gives you options:
You can buy it "today" when its cheap and store it for when you need it (e.g. winter months).
You can also trade on that basis too. For example you can make a future-dated commitment to buy gas (knowing you have the storage available to take delivery). But if the situation changes and you later find you don't need it, you can sell that contract to someone else (or you can still take delivery and re-sell it). But you can't do any of that without having the ability to take delivery, because the person who sold you that future-dated contract will want both your money and to get the gas they sold you off their hands.
Because if you have enough renewables and storage to eliminate gas from the mix you are no longer paying gas prices. The more often that happens, the cheaper your bills get.
The study you have linked is completely wrong.
There is no international market for gas because export/import is physically complex. This is why gas is priced very differently despite it being chemically similar (unlike oil). Anyone who says anything different should be immediately disregarded as someone who should not have an opinion.
This is technically true for oil but there are two other factors. One, importing oil is environmentally-intensive and relies upon the assumption of free and open trade in oil...hopefully, the last few weeks have demonstrated why this is untrue. Two, the assumption is that mix of imports is not changing, because of high energy costs and reduction in North Sea production, UK refineries are shutting down so we are completely losing domestic capacity across the whole space. We aren't importing oil, we are importing refined products, losing domestic chemicals capacity, losing margin. Lower jobs, lower tax revenues, more reliance on imports.
The above take would be somewhat funny if we weren't ten years into seeing the consequences of this. At this point, we could be back to the stone age and you would have the same people screeching that inventing fire is dangerous (I worked in equity research in the mid-2010s...I remember when Cameron was really pushing hard for this, Clegg was saying how expensive nuclear is, etc. people in the industry were saying this would very badly...the issue is that the political cycle is far shorter than the economic cycle, all of this stuff is obvious but people in the UK run on the political cycle so if it isn't the newspapers, no-one normal reads them, next week then it will never happen...same issue with housing, exactly the same thing happened, we are now subsidising retail electricity which is impossible to get out of, I remember specifically this idea was thought of as an insane impossibility but producers were saying it would have to happen, and giving huge subsidies to producers...this is all obvious, obvious things happening are obvious, producers were fine, they get paid the subsidies but consumers are getting shafted AND consistently voting to get shafted).
Also, Roughs storage facility is in the sea...so I am not sure what "real estate" development was done here (the UK has been building 10-20% of the required growth in housing stock for something like two decades...again, the same people will be screeching about developers if we lived in caves). The reason it was closed was due to economics.
For some reason, you deny that producing more gas would be useful but are outraged at a storage facility closing when the primary function of a storage facility is to allow energy producers to arb derivatives markets effectively. I have no idea how this makes sense to you based on all of the above...perhaps you just want to complain about the Tories? I have no idea.
The current tax rate on North Sea production is 75%, there was ample opportunity for public benefit but multiple governments took that money and spent it on benefits. The reason why Norway has worked is because they incentivized exploration (again, something that you imply later would have no benefit...but okay). The policy of the last fifteen years has been to tax the industry heavily and disincentivize exploration. Revisiting this approach is extremely unpopular amongst all politicians which is why production has dropped. Even with this limitation, we have large gas fields that have been blocked (by the Tories btw) for environmental reasons.
This isn't complicated: if you want more oil and gas, produce it and create more incentives to produce it. The reality is that people want to have their cake and eat it: North Sea production is both very pointless but paying huge amounts of carbon to import from the Middle East is a good idea and we have to pay subsidies of 30-40% electricity bills to subsidies green production...which is also very profitable but requires subsidies because of Tory developers or something.
The UK isn't a serious country. What is happening to the UK is a reflection of phenomenally poor political leadership. It is deserved.
> paying huge amounts of carbon to import from the Middle East is a good idea
You are wrong here.
UK oil has a very high carbon footprint.
British North Sea oil is sour (high in sulphur). It is the "wrong" type of oil for UK refineries. So it gets sent to other countries around the world for refining.
UK oil is viscous, waxy, crude which needs to be heated to pipe it. This means it takes a lot of energy to pipe (hello carbon footprint !) and it is not compatible with UK refineries anyway, so it has to be moved overseas (hello carbon footprint !!).
UK crude is nothing like Norwegian crude and massively different from the stuff drilled in the Middle East which requires barely any refining in comparison.
So why not refine it in the UK?
> So why not refine it in the UK?
I already gave the answer in my original post.... UK crude is the wrong type of oil for UK refineries.
Almost all UK refineries were built back in the day (late 60's/early 70's), before North Sea, when the UK was mostly importing oil from Libya and elsewhere in that region.
All the stuff from Libya and elsewhere is far removed from the viscous, waxy sludge that emerges from the North Sea. It requires a far less intensive refining process.
So if your refinery has been built for a low-intensity process you can't just bolt on the shit-ton of high-energy stuff required for waxy crude.
The UK (and Europe) could produce much more gas and consequently control prices if they wanted. It is easy to always blame the previous government(s) but the current situation is policy across Western Europe.
Edit: puzzled by the blunt downvotes for stating a noncontroversial fact. Over the last 15 years the US has invested in shale gas while the UK and EU have banned it. Even today the UK refuses expension of North Sea gas extraction. Whatever the reasons (environment, decarbonisation) it does mean that the situation we have now with gas across Western Europe is policy, not an unfortunate consequence of world events...
It takes time though and it's hard to anticipate geopolitical shocks like the war in Ukraine and Iran.
> Iran
To be fair, I think you would be hard pushed to find anyone outside Israel who seriously thought Iran would ever be on the cards.
Netanyahu dedicated 40 years of his life going to various US presidents trying to get their buy-in. The US presidents all clearly listened to what their advisors had to say regarding Hormuz etc. and said "Thanks, but no thanks" to Netanyahu. Then Trump came along who was ready to over-rule his advisors and surrounded himself with yes-men in his cabinet.
I'm not being political here. A lot of it is public, for example just go to YouTube and look up the decades of videos of Netanyahu visiting the UN or US repeating the same line about "Iran being weeks away from a bomb", almost word-for-word for the last 40 years.
No, this has nothing to do with either. It is policy in the UK and EU not to produce gas on environmental and decarbonisation grounds, and so in fact high priced are policy.
Yeah I'm in the UK and for electricity, I'm on the green Octopus Agile tariff, which tracks the wholesale price updating every 30 mins. Given the abundant green energy today, and peak times between 3-7pm, right this second I'm paying £0.02/kWh, but at 6pm, I'll be charged £0.40/kWh. In the coming months with gas supply reduced, and consumer demand steady, it will have a knock on impact to me given it tracks wholesale cost so I'll have to consider moving off the tariff given I'll be paying more overall.
Well explained, thank you! This is called the marginal price. Many people are not aware of this and are then think renewables are expensive.
California is a great example; highest electricity prices in the US (not counting Hawaii, which makes sense) despite significant hydro and fantastic solar capacity. In the last few years California runs 100% renewable on many days (and growing) every year.
Economics 101: prices are not set by what goods cost to create + markup. Prices are set by how much people are willing to pay.
Why is it "people are willing to pay" and not "corporations are brazen enough to charge"? These utilities are necessities and relatively few people have access to cheaper alternatives to them.
Because PG&E is a for-profit company. They are supposed to charge what the market will bear.
The regulations mandate that the market operates that way. It's the government that should be held to account.
Because, under usual circumstances, self-interested corporations compete against each other to get as close to what people are willing to pay for energy as possible.
> compete against each other
Citation needed.
I know nothing about California so please correct me if I'm wrong.
You mention significant hydro and solar capacity in California. So minimal carbon externality: lung disease and climate change. If you consider that externalised cost into the cost of electricity elsewhere, does not California and other renewable-rich electric grids fare more competitive on price?
E.g. the problem is not the expensive renewables in California, rather, the problem is that the cost of declining human and animal health and climate change is externalised for the fossil fuel.
> In the last few years California runs 100% renewable on many days (and growing) every year.
How many is "many days"? Gas is still used for at least one fifth of electricity. https://app.electricitymaps.com/map/zone/US-CAL-CISO/5y/mont...
According to the official tracker (https://www.energy.ca.gov/data-reports/clean-energy-serving-... and elsewhere) there were 279 days in 2025 where California was on 100% renewable for _some_ time during the day (could be hours, could be minutes at mid-day).
In total hours equivalent of 77.3 full days over 2025.
Meaning it's supply. Overall dupply low because fossil fuels discouraged and penalized, demand high, price high.
You could solve that with a stroke of a pen, by re-nationalizing.
Which, importantly, drives more renewables and storage development because it makes the renewables fantastically profitable to run: near zero cost for you, but paid the price set by gas.
This is absolutely correct. HN readers can learn more about the merit order and marginal pricing here: https://www.next-kraftwerke.com/knowledge/what-does-merit-or...
You can read more about gas markets in the Global Gas Market guide by A115 here: https://a115.co.uk/global-gas-market/ (you can download the PDF guide at the bottom without giving any information)
They aren't orthogonal - the reason that gas is being used is because renewable can't reliably power the grid! If you look at something like https://grid.iamkate.com/ you can see that in the last 24 hours the gas peak is when the wind dies down and the sun isn't shining, around 6-8pm. Happens to be a real price peak at that time. This isn't some weird and unexpected outcome, we've had at least a decade of evidence with this sort of low-wholesale-high-retail price dynamic.
That isn't gas is expensive, it is simply policy that the UK, rather naively, is trying to run their grid 24/7 based on processes that are not available 24/7. That is an expensive trick to try and pull off. Poor people need a way to signal that they won't use electricity in the evening if they want to be able to afford power is my read on the situation. Not very civilised but if that is how the UK doesn't think reliable cheap energy is a target then it seems the most reasonable outcome.
Seems like a very good case to get storage and power backup in people's homes. Industrial users could install their own gas fired generators. Residential consumers could have simple battery based backup, or even a generator which would double for helping during powerouts.
I've read this before and I don't understand how this doesn't become/is untenable.
Doesn't this mean that solar/wind are insanely lucrative?
Also, this would mean that in order to really bring the price down, gas needs to be taken out as a source. But gas is typically the source that balances the grid because its output can be changed quickly. So price wise, you might get a drop but you would lose your ability to react quickly to fluctuations in demand
> Doesn't this mean that solar/wind are insanely lucrative?
I used to work in wind energy in the Netherlands, it is only profitable there due to government subsidies. It was/is an enormously complicated system to understand on the whole. I was on the environmental impact side (visualizations) during the permitting process. It's high-risk & enormously expensive during the permitting process (i.e. getting permission to build the wind farm), and beyond that I understand it's a bidding process and again, super complicated on the energy trading side once you're operating. My experience was that the wind farm operators seemed to be doing well financially, but insanely lucrative? I'm not sure about that vs. non-renewables. Everyone I worked with (including myself) believed in green energy as a part of a larger mission to make the world a slightly better place. EU directives on renewables is what pushed the mission forward; the dutch on the whole (surprisingly), do not love wind turbines in their back yard.
> Doesn't this mean that solar/wind are insanely lucrative?
This is how markets are supposed to work. It provides an economic incentive for production to increase, which is what we want.
Consider what happens if you develop a farming method to produce potatoes for a fraction of the usual cost, but you can only meet 10% of total demand at your local market. What price are you going to sell your potatoes for when you show up to the market? You (like any free market seller) want to maximise your return, so you'll be able to sell for a fraction under the previous market rate, undercutting everyone else. Your farming method would be extremely lucrative.
Yes, but here’s the thing: you don’t have a monopoly over your potato farming method. Lots of new farms are built, and the more that do, the more the average price of a potato drops. Your expected return starts to drop. Yours - and everyone else’s - profit margins get squeezed.
Investors begin to refuse to build new potato farms because a return on their investment gets worse whenever anyone decides to build a new farm.
But the people need potatoes and more potato farms! The government issues an incentive scheme to guarantee a minimum price for each potato sold. Potential farm owners bid against each other for the lowest price, but it means they can build a farm and expect to break even.
Sure, but those same free markets will happily see those expensive producers go out of business. In the electricity scenario, that would mean blackouts.
If you triple the price, you don't have a new gas plant appear out of thin air. And the result won't really be lower consumption either, because most people would have fixed rate contracts (not in the UK so don't know specifically, but this is very common elsewhere)
Yes, and I think that’s actually intentional, they’re rewarding renewables way over the odds without needing to give politically controversial benefits. The rewards are just an inherent result of the existing system. This is why renewables are growing rapidly in the uk.
Of course we’ll need a way to resolve fluctuations both rapid and slower. Rapid fluctuations are handled by pumped hydro and increasingly by batteries.
The slow fluctuations (day/night all the way to summer/winter and good/bad weather patterns) are much trickier, I think it’s still unclear how well handle them, but it will certainly be partly handled by having an excess of renewables, though we’ll likely need some other solutions too, nuclear is probably one of them.
The irony is that your comment should be entirely inverted. Renewables are not rewarded way over the odds - in fact the ruling party banned onshore wind entirely and i remember them banning at least one offshore wind farm. Luckily it is very cheap to build.
Now Hinkley Point C is another story. It's a hugely expensive boondoggle which is taking decades to construct at enormous cost and the reward at the end is that they are rewarded with a strike price that is 3x that of solar and wind. That is an obsecene subsidy forced on to customers for a power source that cant even do load following and doesnt help with fluctuations in supply and demand.
The slow fluctuations on cold, windless nights are going to be managed with gas.
Maybe one day gas synthesized with electricity from solar+wind overproduction on a day like today. The roundtrip is expensive, but will still be cheaper than nuclear power on a windy, summer day.
Not only is it insanely lucrative, but the government enters into "contract for difference" contracts that guarantees a price per MWh that are generally above market rates, taking out most of the financial risk.
Renewables may be the cheapest at spot values, but there needs to be a way to price in the intermittent nature of the power.
There is. The cost of my electricity changes every half hour.
> The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity.
Without mentioning how Contracts for Difference (CfD) works, this is a slightly disingenuous oversimplification.
Electricity pricing in the UK is dictated largely by the price of Gas. This is a good video that goes into it: https://www.youtube.com/watch?v=IEnFmrgEbWo
Gas is the yang to winds yin. What other dispatchable power source is there that Britain could use?
Whatever the dispatchable power source, it would have to last weeks at a time in the coldest months of the year.
The issue is that if my electricity I am using now is 99% renewable and 1% gas then I am paying as if 100% is gas. That is why prices are so high.
The video goes into much better detail but the keyword if you want to search yourself is "marginal cost pricing.
You can still have dispatchable gas without this pricing structure.
You can have dispatchable gas without that pricing structure, but having a grid without that pricing structure can't really function without major nationalization of power generation.
Marginal pricing is one of those things that at first sounds crazy, but when you delve into the topic, it's the only sensible way to have market pricing on electricity generation. The only real alternative would be a fully nationalized grid where the government buys up all the dispatachable power sources.
I know less about the UK's electrical grid, but at least in Germany, if renewables plus batteries are enough to cover electricity needs for normal day-to-day weather, there is more than enough biogas production in the country to save and store that biogas for the weeks-at-a-time periods where renewable shortfalls happen and batteries won't be enough to cover it.
On any given day Germany generates 7-8% of its electricity from biogas, which means that if instead of burning that gas each day for electricity, we stored it in our network of gas reservoirs, then every 13 days of the year that we don't dip into those reserves, that's a full day of electricity generation in gas that's stored.
____
Even if this is done with fossil-gas instead of biogas though, simply having enough renewables + batteries to cut gas out of day-to-day electrical generation, and using it only for backup would be enough to drastically lower prices for the majority of the year.
Are you arguing causality? Texas generates significant renewables, and has low electricity prices.
This is Telegraph for you. The cost of electricity is not driven by green levies or net zero targets, but by gas prices, as gas is a backstop when all other sources are exhausted. Therefore electricity prices are pretty much ties to gas.
Footing the technology development bills as a developed country should. Britain owes the world a lot in terms of fossil fuel contamination too.
I'm sure there's an (un)healthy dose of degrowth to let them hit that 90% number too.
Economic rocket fuel lands in Dover most mornings, it'll balance out. - Ed Miliband 2026 (probably)
These titles are misleading, they always omit the rest of the grid and the final carbon footprint.
In March, the UK emitted 161g CO2/kWh. France did 6 times less CO2/kWh with 2x less renewables !
https://app.electricitymaps.com/map/zone/FR/12mo/monthly
The title may be misleading, but IMO not for the reasons you mentioned. "90%" is based on generation right now, live. On the site from the post you can see that for the last day (24h) renewable generation was 66%, for the last week 46%, for the last year 42%. So it's nowhere near 90% renewable in general, but it is 90% at the moment (there's sunlight and good wind). Emissions on the website from the post are lower than on the website you linked - 107 g/kWh for the week, 124 for the year - but I don't know why that is.
Because nuclear. Which is a great 20th century French achievement !
If the EPR2 doesn’t spiral into costing £17.5bn per unit as the UK-PWR has, perhaps we can get them in to “rustle me up a nuclear power station” or two, in the words of Tony Blair.
https://youtu.be/Gq-l07XmQVc
Just needs a bit of "4be2be4be2be", we can do that!
France has much more nuclear. You can argue that is better but even if you agree it would take decades to get there.
South Korea builds nuclear power plants in five years.
Yet still it costs several pounds a day to heat your home in winter. People are going back to log burners. I've never seen so much coal/wood sold at the supermarkets during winter. I've got some electric blankets which is great but really energy costs seem to be spiralling.
This is great. Yes, plenty of challenges around this remain but the direction of travel is hugely positive.
Bit more advances in grid scale storage, bit more interconnects and this looks real good
and still somehow pay tons for "cheap" green electricity
Somehow? It’s a well established and publicised fact that it’s due to the price of gas. It’s so well established that anyone posting a comment here about the high price of electricity without mentioning it has an ulterior motive.
It's also widely misunderstood. Just because the spot price of electricity is set by the price of gas doesn’t mean the consumer pays that price for all of their electricity.
A lot of wind and solar are on Contracts for Difference. That means when market prices go above the agreed level, the generator pays the difference back through the scheme, which reduces supplier costs rather than the generator simply keeping the whole windfall.
This is particularly relevant when e.g. the price of gas goes way up due to the Iran war, it doesn't mean that the consumer ends up paying more for the energy from wind
It's not only the price of gas but also the price of the co2 emissions. I'm really surprised the uk didn't get rid of it when they left the eu. It's one of the most stupid things possible. It only makes everything more expensive.
That would make British people less poor for once so they decided against it. Managed economic decline and mass immigration go hand in hand with globalism and ‘global warming’ extremists.
So who's working on fixing it? It's not like "the price is fixed to the price of gas" is some iron law of nature. Meanwhile you have folks seeing these three things together:
- England is 90% renewables
- Renewables are a really cheap source of energy.
- England has very high energy prices.
And the obvious conclusion is that someone is lying. It's eroding support for renewables among those that don't have time to investigate how or why the spot price of gas sets the overall energy price.
>England is 90% renewables
The thing is, it's nowhere near 90% in general. 90% is the generation right now, with sunlight and good wind. On the site you can see that renewables were 66% in the last 24h, 46% in the last week, and 42% in the last year. I don't think it's possible to have 90% renewable generation overall without massive energy storage.
My understanding is that legislation is in the works to fix that. But we’ll see.
Yesterday it was announced that a trial would take place so that regions near wind farms can receive free energy from them in periods of curtailment.
https://www.reddit.com/r/GoodNewsUK/s/jG5OCSWTTy
Unless i'm reading this wrong I'm pretty sure i already have this in the UK nad have done for years. What's the trial even for...
>It's not like "the price is fixed to the price of gas" is some iron law of nature.
It kind of is.
Gas is the only source of electricity currently which can be scaled up and down at will and on demand.
Even once grids eventually go 100% green we will probably still use (green, synthesised) stored gas as the power source of last resort on cold, windless nights after batteries and pumped storage have been depleted.
If you’ve got even a passing interest in the UK energy market you’d know this is because of the wholesale price of gas, not the actual wholesale cost of solar and wind.
If you really want to pay less for green energy, which is cheap when it’s plentiful (like anything) get on a variable tariff and install some storage.
Stop seeing this through the eyes of a consumer. On a macro scale, your country is not handing hundreds of millions of pounds a day over to other countries. Now imagine if it still was. You'd be even worse off.
Almost every normal person sees this through the eyes of the consumer because paying the electric bill is their primary interaction with the issue. What you're describing is politically a tough sell.
If by renewables you mean lumber from Canada, then sure.
9.4% is Gas + Biomass (not clean)
But there’s a generation surplus and export of +13.4%!
11am, nicely sunny-ish and quite windy here... and so 65% wind, 25% solar.
This is a 'lawyer-worded' headline. I am an enormous fan of renewables, I am an electrical engineer who designs control systems for renewables exclusively. My career depends on renewables.
Headlines like this do nobody any favors. The problem with renewables is that you cannot run a grid on renewables alone. Many days will have an abundant oversupply, like the day shown. Many days will not. Consumers are not tolerant of brownouts in the west. We need pump storage hydro, we need massive improvements to the transmission system, and we need battery storage plants (in that order).
Its fine to celebrate days of high renewable GW output, but people get out the GW Bush 'mission accomplished' banners a little early. The generation is the cheap and easy part. The rest is expensive and slow and needs way more focus than it's getting if we ever want to make progress in the west (China is already figuring it out)
For those of us outside of Britain (i.e. 98% of us?) the message here isn't "mission accomplished" -- it's "Yes it's possible"
Well, in the sense that it's possible to be eating zero calories in the time between meals. You still need the meals. If you're just looking at brief snapshots, it doesn't tell you much.
Isn't pumped hydro severely limited by geography in many places?
I'm hoping for some other technology apart from pumped hydro or batteries to be used for capturing surplus renewable energy for later use. It's unfortunate that hydrogen seems to be too complex to handle at these scales, it'd be utopian if it wasn't and the excess of renewables could be transformed into hydrogen for use in turbines instead of nat gas...
The headline is perfectly accurate… I’d say what you’re saying is a kind of whataboutism about stuff everybody knows…
Milestones like the one here are notable and interesting to most people!
Why don't they count pumped storage and batteries as renewable?
Because they’re not generation, they’re storage. You need to charge them and that charge can come from any source.
They are storage. They should count as neither.
And thats not how good renewables are- thats how deindustrialized britain has become. And deindustrialization leads to debt slavery - and debt slavery either leads to passing on that bitter chalice to others (empire) or to becoming a colony.
> deindustrialization leads to debt slavery
Ok I’ll bite — how? Surely not because manufacturing is the only way to create value?
As you denindustrialize, your normal working class population rebells - demanding its lifestyle to remain untouched- thus subsidized by the state. So the state either prints money costing the world (us-model) or it prints money- costing the future. As this happens and future generations get poorer- the idea to lend from foreign "investors" which then take over your country becomes the default solution - until you are a debt colony, owned by those lending you money.
The landscape has been destroyed by wind turbines, and energy prices are higher than ever. lose lose.