{"id":275871,"date":"2023-08-27T16:17:04","date_gmt":"2023-08-27T14:17:04","guid":{"rendered":"https:\/\/climatescience.press\/?p=275871"},"modified":"2023-08-27T16:17:06","modified_gmt":"2023-08-27T14:17:06","slug":"energy-prices-really-are-a-conspiracy-against-the-public-ross-clark","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=275871","title":{"rendered":"Energy prices really are a conspiracy against the public-Ross\u00a0Clark"},"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 Paul Kolk<\/p>\n\n\n\n

From the Telegraph:<\/p>\n\n\n\n

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

From October 1\u00a0<\/em>the average home will be paying \u00a31,923 a year<\/em><\/a>\u00a0for gas and electricity rather than \u00a32,074 as now.<\/em><\/p>\n\n\n\n

Many consumers will be so relieved to hear that Ofgem has lowered its price cap again that they won\u2019t bother to ask the question they ought to be asking: how come, in a privatised electricity market, the price we pay for energy is still being determined by officials at a government agency? Why can\u2019t I go shopping around for a better deal just as I do for food, petrol, clothes, holidays and most other things?<\/p>\n\n\n\n

We used to have some kind of retail energy market, but consumer groups started moaning that some customers were paying more than others \u2013 something that is inevitable in a market. They persuaded themselves that energy companies were profiteering despite their margins being wafer-thin.<\/em><\/p>\n\n\n\n

Ed Miliband, then Labour leader, came up with the wheeze of capping energy prices and the Conservatives, while they damned him at the time, found it politically expedient to interfere in the market too.<\/em><\/p>\n\n\n\n

Once consumers found themselves wrapped in the comfort blanket of fixed prices, it has proved hard to switch back to a competitive market. On the contrary,\u00a0<\/em>energy is being dragged ever deeper into state interference<\/em><\/a>.<\/em><\/p>\n\n\n\n

Indeed, last autumn the Government ended up with the idea of capping the price cap with the Energy Price Guarantee \u2013 funded, needless to say, from our taxes.<\/em><\/p>\n\n\n\n

On the wholesale side, we never did have a genuinely free market in electricity. What was created after privatisation was a fudged, artificial market, the rules for which failed to foresee what would happen when we started feeding renewables into the grid. It is so dysfunctional that the prices that we pay for our power are vastly inflated.<\/em><\/p>\n\n\n\n

Energy companies are forced to buy a proportion of their power from green sources, partly explaining our higher electricity prices. Retail energy companies are still obliged to buy \u201crenewables obligation certificates\u201d from older wind and solar plants. Newer solar and wind plants are paid a guaranteed \u2018strike price\u2019 instead.<\/em><\/p>\n\n\n\n

But another reason we pay so much for our power \u2013 around 80pc more, unit for unit, than US households \u2013 is thanks to something called \u201cmarginal cost pricing\u201d.<\/em><\/p>\n\n\n\n

Every half an hour the grid runs an auction in which electricity suppliers submit bids to provide power for that period. The lowest bids are accepted first, followed by the next highest and so on until supply has matched demand.<\/em><\/p>\n\n\n\n

But here is where it gets odd. Rather than be paid what they bid, all electricity providers are paid the same rate \u2013 equivalent to the highest bid. In other words, a wind farm might have bid to provide power at cost of \u00a340 per megawatt-hour (MWh) and a gas plant at \u00a360 per MWh, but both will be paid at a rate of \u00a360 per MWh.<\/em><\/p>\n\n\n\n

It is rather as if you go to a supermarket to buy 12 bottles of Prosecco for your wife\u2019s birthday party but find they only have 11 bottles. To make up the 12 you buy a single bottle of Bollinger. But when you get to the till you are charged for 12 bottles of Bollinger.<\/em><\/p>\n\n\n\n

Obviously, such a market works in favour of the producers rather than the consumer, yet it didn\u2019t matter so much when our electricity market was made up mostly of large-scale reliable sources such as coal, gas and nuclear which charged similar prices for their electricity.<\/em><\/p>\n\n\n\n

However, then came renewables. While the marginal cost of supplying wind and solar energy tends to be low, these sources are very intermittent, and are prone to under-deliver at short notice if the wind stops blowing or the sun stops shining.<\/em><\/p>\n\n\n\n

In order to make up the gap between supply and demand, the operators of gas power stations have to be called upon to switch on their power plants at short notice. But it costs a lot more, MWh for MWh, to provide a burst of power for a couple of hours than it does to provide a steady load of power.<\/em><\/p>\n\n\n\n

Britain is becoming increasingly reliant on electricity imported via subsea interconnectors. But we quite often\u00a0<\/em>end up paying eye-watering prices<\/em><\/a>.<\/em><\/p>\n\n\n\n

At one point in June 2022 we ended up paying \u00a39,724.54 per MWh to import electricity from Belgium \u2013 over 100 times more than its average wholesale price. And given the rules of marginal cost pricing, everyone supplying power to the UK grid at that point was paid the same, silly sum.<\/em><\/p>\n\n\n\n

Over the past year alone, thanks to intermittent wind and solar, the average daily price paid in the wholesale market has varied between \u00a356 and \u00a3458. Retail customers don\u2019t see these enormous spikes on their bills, but the costs are passed onto them.<\/em><\/p>\n\n\n\n

The problem is compounded by green levies. If you own a gas power station you have to pay the Climate Change Levy \u2013 a tax on the burning of fossil fuels which is passed onto consumers. Yet thanks to marginal cost pricing, consumers are effectively paying the climate change levy even on renewable electricity.<\/em><\/p>\n\n\n\n

Wind and solar farms would be making a killing from our dysfunctional wholesale energy market were it not for the fact that the Government has shaped an effective windfall tax on them \u2013 capping how much they are paid per MWh.<\/em><\/p>\n\n\n\n

Yes, that is how silly it has become: renewables are being subsidised and subjected to windfall taxes at the same time.<\/em><\/p>\n\n\n\n

At some point someone in government is going to ask: why don\u2019t we sweep away all the absurdities \u2013 the levies, subsidies and bizarre rules like marginal cost pricing \u2013 and have a proper, functioning energy market? We might be surprised how liberating it is \u2013 and how much better value for the consumer.<\/em><\/p>\n\n\n\n

https:\/\/www.telegraph.co.uk\/business\/2023\/08\/26\/energy-prices-really-are-conspiracy-against-public\/<\/a><\/p>\n\n\n\n

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

Many consumers will be so relieved to hear that Ofgem has lowered its price cap again that they won\u2019t bother to ask the question they ought to be asking: how come, in a privatised electricity market, the price we pay for energy is still being determined by officials at a government agency? Why can\u2019t I go shopping around for a better deal just as I do for food, petrol, clothes, holidays and most other things?<\/p>\n","protected":false},"author":121246920,"featured_media":202720,"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":[691818056,691822125,691819814,691820533,691818130,691822123,691822124],"class_list":{"0":"post-275871","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-climate-change","9":"tag-conspiracy","10":"tag-energy-prices-2","11":"tag-epg-subsidies","12":"tag-renewables","13":"tag-ross-clark","14":"tag-wind-and-solar-farms","16":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/06\/0534273-popular-funny-stupid-wallpapers-2000x1500-pc.jpg?fit=2000%2C1500&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-19Lx","jetpack-related-posts":[{"id":271409,"url":"https:\/\/climatescience.press\/?p=271409","url_meta":{"origin":275871,"position":0},"title":"ROSS CLARK: This polluting green sham has been mocking taxpayers for\u00a0years","author":"uwe.roland.gross","date":"04\/08\/2023","format":false,"excerpt":"More on the environmental obscenity called Drax from Ross Clark","rel":"","context":"In \"CO2\"","block_context":{"text":"CO2","link":"https:\/\/climatescience.press\/?tag=co2"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0Drax_power_station_jd28304-me.jpg?fit=1200%2C739&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0Drax_power_station_jd28304-me.jpg?fit=1200%2C739&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0Drax_power_station_jd28304-me.jpg?fit=1200%2C739&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0Drax_power_station_jd28304-me.jpg?fit=1200%2C739&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0Drax_power_station_jd28304-me.jpg?fit=1200%2C739&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":276158,"url":"https:\/\/climatescience.press\/?p=276158","url_meta":{"origin":275871,"position":1},"title":"Net Zero is condemning more Brits to energy poverty-Ross\u00a0Clark","author":"uwe.roland.gross","date":"29\/08\/2023","format":false,"excerpt":"Here\u2019s another great idea from the net zero establishment: only heat your home when it is warm and sunny outdoors.","rel":"","context":"In \"Climate Change Committee\"","block_context":{"text":"Climate Change Committee","link":"https:\/\/climatescience.press\/?tag=climate-change-committee"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0net-zero_cities-1.jpg?fit=1200%2C600&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0net-zero_cities-1.jpg?fit=1200%2C600&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0net-zero_cities-1.jpg?fit=1200%2C600&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0net-zero_cities-1.jpg?fit=1200%2C600&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/0net-zero_cities-1.jpg?fit=1200%2C600&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":217095,"url":"https:\/\/climatescience.press\/?p=217095","url_meta":{"origin":275871,"position":2},"title":"We are all living in Greta\u2019s world now\u2013Ross Clark","author":"uwe.roland.gross","date":"03\/09\/2022","format":false,"excerpt":"Well, it\u2019s Greta\u2019s world we are living in now. 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