Ongoing “green levies” 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 – this share simply must be brought down.
Above all, our “marginal-cost pricing model” keeps UK energy bills comparatively high. It’s true that wind, solar and other renewables generated two-fifths of the UK’s electricity last year – out-stripping gas. But “cheap” renewables, far from cutting consumer energy bills, are pushing prices up.
Renewables still depend heavily not only on subsidies, but also a large fleet of gas power stations on standby – which must be fired up on days when the wind isn’t blowing and the sun doesn’t shine.
Such “intermittent” 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 – as the sky-high fixed costs of being able to produce energy at short notice must be found from smaller revenues.
Even on days when it is sunny and windy, UK electricity prices are driven by the marginal cost of generation – that is, the spot price of gas. The shift to renewables inflates this marginal cost, pushing up household bills too – whatever we’re told about “low cost” renewable energy.
Renewable companies make serious money from the very intermittency problems they’re meant to be solving. The government takes a big slice – via a low-key but hefty renewable windfall tax. https://www.telegraph.co.uk/…/renewable-energy-net…/
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