{"id":270571,"date":"2023-07-31T13:47:25","date_gmt":"2023-07-31T11:47:25","guid":{"rendered":"https:\/\/climatescience.press\/?p=270571"},"modified":"2023-07-31T13:47:28","modified_gmt":"2023-07-31T11:47:28","slug":"renewable-energy-isnt-as-cheap-as-advertised-so-far","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=270571","title":{"rendered":"Renewable energy isn\u2019t as cheap as advertised \u2013 so\u00a0far"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From NOT A LOT OF PEOPLE KNOW THAT<\/a><\/p>\n\n\n\n

By Paul Homewood<\/p>\n\n\n\n

h\/t Ian Magness<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

But the main reason UK inflation remains exceptionally high is our still elevated energy costs \u2013 a serious problem, which shows little sign of being resolved.<\/em><\/p>\n\n\n\n

The UK\u2019s domestic energy production has been 14pc below pre-pandemic levels over the last year, according to the latest\u00a0<\/em>Digest of UK Energy Statistics<\/em><\/a>. Oil production was down nearly 30pc on 2019.<\/em><\/p>\n\n\n\n

During 2022, high energy prices saw energy consumption \u2013 down 11pc on pre-Covid levels \u2013 fall further across all sectors, impacting broader economic growth. And energy prices have been slow to fall.<\/em><\/p>\n\n\n\n

Wholesale gas prices in the US were 80pc below those across Europe during 2022 \u2013 and remain much lower now. That\u2019s because the US has hugely expanded energy production, exploiting shale reserves.<\/em><\/p>\n\n\n\n

Residential electricity prices in the UK, meanwhile, were \u20ac45.3 per kilowatt hour during June, compared to a European Union average of \u20ac45.3 according to the HEPI index. In the US, prices averaged \u20ac18.9.<\/em><\/p>\n\n\n\n

Ongoing \u201cgreen levies\u201d on UK utility bills, used to subsidise renewable energy, have lately been suspended across many major European economies. In Britain, though, taxes and network charges still account for 56pc of household electricity bills, compared to 40pc across the EU \u2013 this share simply must be brought down.<\/em><\/p>\n\n\n\n

Above all, our \u201cmarginal-cost pricing model\u201d keeps UK energy bills comparatively high. It\u2019s true that wind, solar and other renewables generated two-fifths of the UK\u2019s electricity last year \u2013 out-stripping gas. But \u201ccheap\u201d renewables, far from cutting consumer energy bills, are pushing prices up.<\/em><\/p>\n\n\n\n

Renewables still depend heavily not only on subsidies, but also\u00a0<\/em>a large fleet of gas power stations on standby<\/em><\/a>\u00a0\u2013 which must be fired up on days when the wind isn\u2019t blowing and the sun doesn\u2019t shine.<\/em><\/p>\n\n\n\n

Such \u201cintermittent\u201d periods can last weeks, especially during winter, when energy demand is high. But having gas-fired stations on standby to facilitate more renewables is hugely expensive \u2013 as the sky-high fixed costs of being able to produce energy at short notice must be found from smaller revenues.<\/em><\/p>\n\n\n\n

Even on days when it is sunny and windy, UK electricity prices are driven by the marginal cost of generation \u00ad\u2013 that is, the spot price of gas. The shift to renewables inflates this marginal cost, pushing up household bills too \u2013 whatever we\u2019re told about \u201clow cost\u201d renewable energy.<\/em><\/p>\n\n\n\n

Renewable companies make serious money from the very intermittency problems they\u2019re meant to be solving. The government takes a big slice \u2013 via a low-key but hefty renewable windfall tax.<\/em><\/p>\n\n\n\n

Marginal cost energy pricing has seriously aggravated the UK\u2019s cost-of-living crisis, explaining at least part of our inflation problem. Yet rather than reforming this pricing system, easing household bills, the government raids renewable profits \u2013 an ever-increasing household energy \u201cstealth tax\u201d.<\/em><\/p>\n\n\n\n

Since the Tories won the Uxbridge by-election amidst widespread opposition to Sadiq Khan\u2019s Ulez expansion, there\u2019s been talk of watering-down \u201cnet zero\u201d deadlines and other green targets. This builds on a sentiment that\u2019s grown considerably over recent months.<\/em><\/p>\n\n\n\n

The question of how we get to \u201cnet zero\u201d \u2013 and who pays \u2013 is increasingly-debated, becoming more and more controversial. Reaching the 2050 target has enormous cost implications not only for households and firms, but also the government.<\/em><\/p>\n\n\n\n

Between now and mid-century, subsidies and other \u201cgreen investment\u201d will add 21 percentage points to the UK\u2019s national debt-to-GDP ratio, according to a recent Office for Budget Responsibility Report. In today\u2019s money, that\u2019s equivalent to \u00a3500 billion.<\/em><\/p>\n\n\n\n

These are vast costs and, as long as \u201cNet Zero 2050\u201d remains in place, the process of spreading them around will become increasingly politically contentious. Any government wanting support for such targets to be maintained should start by finding a way to ensure renewables start delivering much cheaper energy bills.<\/em><\/p>\n\n\n\n

https:\/\/www.telegraph.co.uk\/business\/2023\/07\/30\/renewable-energy-net-zero-2050-cost-who-pays\/<\/a><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

These are vast costs and, as long as \u201cNet Zero 2050\u201d remains in place, the process of spreading them around will become increasingly politically contentious. Any government wanting support for such targets to be maintained should start by finding a way to ensure renewables start delivering much cheaper energy bills.<\/p>\n","protected":false},"author":121246920,"featured_media":270577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691819180,691820995,691818154,691818181,691818299,691818248],"class_list":{"0":"post-270571","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-energy-costs","9":"tag-inflation","10":"tag-net-zero","11":"tag-renewable-energy","12":"tag-subsidies","13":"tag-uk","15":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/0renewable-energy.jpg?fit=2121%2C1414&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-18o3","jetpack-related-posts":[{"id":415697,"url":"https:\/\/climatescience.press\/?p=415697","url_meta":{"origin":270571,"position":0},"title":"Green 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Offshore Wind Fail \u2013 The UK Government Must Make Cheap Renewables More Affordable","author":"uwe.roland.gross","date":"11\/09\/2023","format":false,"excerpt":"\u2018Biggest clean energy disaster in years\u2019: UK auction secures no offshore windfarms","rel":"","context":"In \"British renewable investment\"","block_context":{"text":"British renewable investment","link":"https:\/\/climatescience.press\/?tag=british-renewable-investment"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/09\/0Offshore_Wind_Power_shutterstock_486643192.jpg?fit=1200%2C560&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/09\/0Offshore_Wind_Power_shutterstock_486643192.jpg?fit=1200%2C560&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/09\/0Offshore_Wind_Power_shutterstock_486643192.jpg?fit=1200%2C560&ssl=1&resize=525%2C300 1.5x, 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government: more handouts for \u201agreen\u2018 projects please","author":"uwe.roland.gross","date":"23\/02\/2023","format":false,"excerpt":"An interesting (?) concept from renewables promoters here, partly to boost \u2018innovative\u2019 (generally expensive) technologies. We\u2019re supposed to believe that bigger subsidies, or \u2018fiscal incentives\u2019, will lead to lower bills.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-673.png?fit=1200%2C801&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-673.png?fit=1200%2C801&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-673.png?fit=1200%2C801&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-673.png?fit=1200%2C801&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-673.png?fit=1200%2C801&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":277959,"url":"https:\/\/climatescience.press\/?p=277959","url_meta":{"origin":270571,"position":5},"title":"Net Zero Offshore\u00a0Wind","author":"uwe.roland.gross","date":"09\/09\/2023","format":false,"excerpt":"The Government has today announced the results of the fifth auction of Contracts for Difference (CfD) subsidies for renewable electricity generation. 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