According to the regulator OfGem, UK Wind farms are becoming cheaper to build with turbines more efficient and generating more electricty causing the Government to reconsider building new nuclear power plants so with a 6% increase in bills, the obvious question has to be why are our electricity bills still going up rather than down?
Seems an easy enough question and the Economist Intelligence Unit may say that: 'The trajectory of cheaper renewable technologies is irreversible' but it appears that our bills won't come down until 2030 because of what was agreed in 2015.
For some reason the price for wholesale electricity is set in 15 year cycles, with each generating company saying what it would be willing to accept to produce a unit of electricity for the next decade and a half and they base their price on Gas which they use to generate the electricity.
So it is the price of Gas which sets the electricity price which is agreed for the next 15 years into the future so we are paying up to 2030 for what Gas cost in 2015 (123p in 2015 compared to 83p this year).
OfGem say that as more renewables are connected there will be a time when gas is not setting the wholesale price but that brings us to another reason why electricity bills are not coming down, the infrastructure is old and unable to handle more electricity.
UK Energy say that the UK has an ageing electricity grid, which needs upgrading, partly to accommodate new renewable power sources and there are actually times when wind power is actually paid not to generate, because the grid cannot handle all the additional electricity that it could produce.
The government are now saying that they are reviewing the structure of the electricity market, alongside its push for clean power through renewables and state in the long term, with less dependence on gas, renewables will be bringing down overall energy bills, and specifically electricity bills, for the UK.
Can't say i understand why anyone would agree to pay 15 years in advance for something when the price could go down (and also up), but it does me wish that we had started the rush to renewables much earlier and also that the Privatisation which Margaret Thatcher promised would lower bill, had been pushed back against much firmer.
Saturday, 31 May 2025
Lower Electricity Bills..But Not Until 2030
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4 comments:
so many ignorant statements... where to begin...
> "...causing the Government to reconsider building new nuclear power plants...". this would be very stupid environmentally. nuclear energy has advanced dramatically since the leftist-greens killed the industry... it does much environmental harm to make the turbines, and almost as much getting rid of them when they need to be replaced (which is frequently)
> "...For some reason the price for wholesale electricity is set in 15 year cycles...". because fuel and other expenses fluctuate so much they created scientific models to predict the expenses and set prices based on the risk of fluctuations - actuarial science...
> note that the price of gas (LP) has come down because of fracking innovation...
> "...infrastructure is old...". so, yawl haven't paid enough taxes to keep it up... alas
> "...grid cannot handle all the additional electricity ...". it would be smart to make a gradual switch over. an added complexity is that you likely have power plants that still have many years of remaining operational capacity. are you going to shutter those (a wasted investment)?
> "...renewables will be bringing down overall energy bills...". while this is potentially true, it is also potentially true that gas based and nuclear based energy may be cheaper than renewable energy...
> "... started the rush to renewables much earlier ...". the most ignorant statement of all... renewables are just barely affordable now, starting earlier would have been a monumental and expensive failure. humans did not yet have the nano engineering capabilities needed, the computing needed, or the chemistry needed. some things cannot be forced no matter how deep in la la land a leftists exists...
I can see you have a grip on this as you do on most things, which is not at all to which point:
it does much environmental harm to make the turbines, - as much as burying the nuclear waste that stays lethal for hundreds of thousands of years?
'infrastructure is old...". so, yawl haven't paid enough taxes to keep it up... alas - privatised companies, do keep up.
so everything was great before the uk privatized? sure. maybe you will get your way so the uk can become like cuba, china, venezulea, or north korea...
Quentin Smith’s law!!!!!!
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