Icebutik
  • Home
  • World
  • Anomalies
  • Unexplained
  • Phenomena
  • Weird
  • Odd News
  • Mysteries
  • Contact us
Facebook Twitter Instagram
Icebutik
  • Home
  • World

    Your Thursday Briefing – The New York Times

    July 7, 2022

    Chagos Islands FA: The team representing a lost homeland, 6,000 miles away

    July 7, 2022

    Tap Into Indigenous Knowledge To Preserve Our Forests — Global Issues

    July 6, 2022

    Pakistan police arrest suspect in deadly bombing of Chinese nationals | Police News

    July 6, 2022

    As Russia Moves on Another Province, Ukrainians Leave Ghost Towns Behind

    July 6, 2022
  • Anomalies
  • Unexplained
  • Phenomena
  • Weird
  • Odd News
  • Mysteries
  • Contact us
Icebutik
Home»World»Renewables Are Cheaper Than Ever
World

Renewables Are Cheaper Than Ever

SteinarBy SteinarJanuary 19, 2022No Comments7 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
Share
Facebook Twitter LinkedIn Pinterest Email
A wind farm in Curacao. Credit: Desmond Brown/IPS
  • Opinion
  • Wednesday, January 19, 2022
  • Inter Press Service

Jan 19 (IPS) – Not for the first time, global energy markets are in turmoil. Internationally traded gas prices more than quadrupled in 2021. In their wake, many energy suppliers have gone bust and household bills across Europe are set to soar. Energy prices are driving up the cost of living and inflation, but this is also a moment to realise the old saying: “never waste a good crisis”.

Some of the causes of sky-high energy bills are unavoidable – there is little that most governments can do about the wholesale price of gas itself. Fossil fuel companies make huge investments that take years to mature, breeding periods of moderate prices followed by supply squeezes when prices rocket. Gas prices softened over the previous decade and the arrival of the pandemic in 2020 depressed demand.

Regions without domestic gas supplies or which have depleted most of their gas reserves in recent decades get a lot of their gas by importing it. European periphery countries, including the UK and many parts of the Mediterranean, assumed they could rely on global supplies of liquefied natural gas.

But tankers from the big gas producers such as Qatar can turn to Europe or Asia depending on who pays the highest price. Now there is a scramble, and Asian demand dominates.

The knock-on effect to energy bills is amplified in the UK and other countries in Europe where electricity is organised through wholesale markets (in which generators bid to operate if the price is right) and in which most homes rely on gas for heating.

Average home energy bills in the UK, which rose to over £1,200 (US$1,630) in 2021, are predicted to shoot up by around 50% in 2022. Up to half of the rise will come not from the gas you burn, but from the impact of gas on electricity prices.

So why is a gas price crunch being felt just as strongly in electricity bills? After all, gas generates less than half of electricity – under 40% in the UK and only about 20% across the EU.

Renewables generate over a quarter of UK power, nuclear and imports another quarter. The cost of generating power from wind and solar has tumbled over the past decade globally, falling by over 40% for onshore wind and by far more for solar and offshore wind.

The last fixed-price government contracts offered for offshore wind energy in Britain – hardly the cheapest of renewables – were under 5p per kilowatt hour (kWh). That’s less than a quarter of the typical domestic tariff (what most people pay for electricity at home) that consumers are set to face in 2022. Households are paying for their electricity several times what it now costs to generate and transmit it from the cleanest energy sources at scale.

The design of electricity systems has failed to catch up with the revolution in renewable energy. Competitive electricity markets, established in many countries to try and minimise costs, are actually suffering the greatest price rises. This is not because governments elsewhere use taxes to subsidise electricity (though some do), but because in wholesale electricity markets, the most expensive generator sets the price.

Since renewables and nuclear will always run when they can, it is fossil fuels – and at present, unequivocally gas, plus the cost of taxes on CO? pollution – which set the price almost all the time, because some gas plants are needed most of the time, and they won’t operate unless the electricity price is high enough to cover their operating cost. It’s a bit like having to pay the peak-period price for every train journey you take.

If renewables are now so much cheaper, why can’t consumers buy electricity directly from them and avoid paying the gas and carbon costs?

A new golden age

Energy markets aren’t designed to cope efficiently with sources like renewables which cost a lot to build but far less than fossil fuels to run. Governments offer long-term, fixed-price contracts to generators for their output of renewable energy. This has been the biggest driver of investment, while competitive auctions of these contracts, to companies keen to build renewables, have slashed building costs the most.

In contrast, households and other small consumers can rarely buy fixed-price contracts more than a year or two ahead, given the uncertainties in wholesale prices along with governments encouraging competitive switching between suppliers.

The electricity generated from renewables contracts is fed into the rest of the system, which balances the variable output from renewables by generating more or less from conventional sources.

That adds about around 1p per kWh to the cost of renewable electricity in the UK and Europe. Even accounting for this, the gap between cheap renewables and expensive final electricity is becoming unconscionable.

A decade ago, many energy experts projected a “golden age of gas”. Countries are likely to continue burning gas for some years. But with the drive to cut emissions and the advent of cheap renewables, electricity is likely to dominate the energy system in future, powering heat pumps, electric vehicles and more.

This golden age of electricity cannot arrive as long as the price of electricity is decided by fossil fuels and their carbon costs.

What would electricity markets appropriate for renewable energy look like? In research I led with colleagues on electricity prices, we proposed a green power pool which would aggregate long-term contracts with renewable energy generators and sell the power on to consumers. The price would mainly be set by the actual investment costs of generators, rather than gas-driven wholesale markets.

When there isn’t enough renewable power being generated or stored – like on cold and calm winter days – the green power pool would buy electricity from the wholesale market for limited periods and quantities.

To minimise those costs (and emissions), contracts could give discounts to customers who can use electricity outside of peak times, or those with two-way electric vehicle connections who can sell power back to the grid.

It won’t happen overnight. It won’t cut bills tomorrow. But new electricity needs a new market – one which cuts energy bills at the same time as decarbonising the energy system.

Michael Grubb, Professor of Energy and Climate Change, UCL

This article is republished from The Conversation under a Creative Commons license. Read the original article.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

Where next?

Related news

Browse related news topics:

Latest news

Read the latest news stories:

  • Renewables Are Cheaper Than Ever – So Why Are Household Energy Bills Only Going up? Wednesday, January 19, 2022
  • Human Trafficking, Rape, Extortion Behind ‘Forced Conversions’, say Experts Wednesday, January 19, 2022
  • Palestine-Israel: UN envoy highlights urgent need for reform Wednesday, January 19, 2022
  • Key Pillars Mostly in Place to Speed up Africa’s Free Trade in 2022 Wednesday, January 19, 2022
  • UN chief lauds ‘demonstrable effort to make peace’ in Ethiopia Wednesday, January 19, 2022
  • Afghanistan: 500,000 jobs lost since Taliban takeover Wednesday, January 19, 2022
  • 2021 joins top 7 warmest years on record: WMO Wednesday, January 19, 2022
  • Adolescents Left Behind Global AIDS Response – Experts Experts Tuesday, January 18, 2022
  • UN celebrates 25 years of mandate to protect children caught in conflict Tuesday, January 18, 2022
  • COVID-19: WHO expresses hope worst of Omicron wave is over Tuesday, January 18, 2022

In-depth

Learn more about the related issues:

Share this

Bookmark or share this with others using some popular social bookmarking web sites:

Link to this page from your site/blog

<p><a href="https://www.globalissues.org/news/2022/01/19/29853">Renewables Are Cheaper Than Ever - So Why Are Household Energy Bills Only Going up?</a>, <cite>Inter Press Service</cite>, Wednesday, January 19, 2022 (posted by Global Issues)</p>

… to produce this:

Renewables Are Cheaper Than Ever – So Why Are Household Energy Bills Only Going up?, Inter Press Service, Wednesday, January 19, 2022 (posted by Global Issues)

Related

Economy & Trade Energy Environment Global global issues Inter Press Service Opinion
Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Previous ArticleMatcha Green Tea Latte Recipe (+ Iced Option)
Next Article The 5 Best Metabolism-Boosting Powders, According to a Nutritionist
Steinar
  • Website
  • Facebook
  • Pinterest

Related Posts

Your Thursday Briefing – The New York Times

July 7, 2022

Chagos Islands FA: The team representing a lost homeland, 6,000 miles away

July 7, 2022

Tap Into Indigenous Knowledge To Preserve Our Forests — Global Issues

July 6, 2022

Pakistan police arrest suspect in deadly bombing of Chinese nationals | Police News

July 6, 2022

Leave A Reply Cancel Reply

Categories
  • Anomalies (436)
  • Icebutik Store (271)
  • Odd News (624)
  • Unexplained-mysteries (330)
  • Unexplained-phenomena (648)
  • Weird (10)
  • World (698)

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

Latest Posts

The Perplexity Of The Villa Of Mysteries In Pompeii

July 7, 2022

Your Thursday Briefing – The New York Times

July 7, 2022

HHS gives NYU $40,000 to study why children ‘favor Whiteness and maleness’

July 7, 2022
  • About us
  • Contact us
  • Privacy Policy
  • Terms of use
© 2022 Designed by icebutik

Type above and press Enter to search. Press Esc to cancel.