Why can’t renewable energy sources keep UK energy prices low?
From April 2022, average household energy bills will rise by more than 50% as energy providers face massive increases in the cost of gas. Gas supplies come from global supply chains that are subject to changing market demand and regional geopolitics. And the pandemic, of course, has created all kinds of anomalies.
But why, in the age of renewables, is the UK still at the mercy of gas prices? the contribution to UK electricity generation from renewable sources has more than doubled since 2014. Yet we are in a situation of fossil fuel dependency that will strain people’s finances for the foreseeable future.
The most obvious explanation is that the capacity of our renewable sources is not yet large enough. the the contribution to the national network is on average around 40%mainly from wind and solar power, biomass and hydroelectricity.
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Renewables do not contribute more for very good reasons. By using fossil fuels, we have been able to respond to variations in electricity demand by turning more power plants on or off or running them faster or slower.
With renewable energies, we are always dependent on weather conditions. For example, the the third quarter of 2021 saw energy prices rise due to a lack of autumn winds — renewable electricity production fell by 17% compared to the previous year and gas had to come to the rescue.
Inter-seasonal storage remains a major challenge for the renewable energy industry. Huge amounts of energy need to be sent around the UK national grid at any one time – an average of over 30 gigawatts, rising to over 40 gigawatts at peak times.
For the nation to rely on renewable energy, there would need to be huge battery banks to deal with the still cloudy days. Even then, this system would only work for a few days. The technology is not yet available to allow for a week or month of unreliable conditions. Thus, we still currently need fossil fuels to meet the expectations of available electricity whenever we need it.
One solution to price increases would be to have more control over our “locally grown” gas. After all, about half of our gas supply comes from the North Sea – 30% is imported from Norway, the rest from all over Europe.
But the UK has to buy its gas as an international commodity on the world market. We pay an aggregate price that is subject to the behavior of other buyers and sellers, and is subject to the global threat and risk environment.
Some practical supply chain issues have been problematic as COVID-19 has affected the ebb and flow of gas supplies. When industrial production ceased globally, tankers and tankers sat idle.
Now tankers are rushing to serve Asia, where the biggest surge in demand has occurred. The United States increased LNG supplies across the Atlantic to avoid Europe being ransomed as a result. Global production could be increased to stabilize gas supply and bring prices down – but where are the incentives for an energy industry that profits from sky-high prices?
The UK could usefully think long-term about localism to minimize its exposure to global markets. It means renewing our belief in the value of distributed contributions to the network, supporting developments at the household, local community and residential scales.
In this way, individual households would regain control and choice over what they paid for their energy by producing it for themselves. If more of the population installed solar panels on their roofs and had a small battery for storage, they could significantly reduce their need for grid-provided energy, reduce gas demand and reduce emissions. We could start changing the structure of energy demand and basically move to a distributed generation model.
Reduced dependency would also come from improving the UK’s old and leaky housing stock, with more incentives and private and public money spent on insulating roofs, walls and windows – rather than emergency payments to offset large energy bills.
The easiest victory of all would be to introduce more progressive planning rules: insist that all new homes be built with excellent energy efficiency in mind; shiny insulation, solar panels, car charging facilities, energy storage and heat pumps; each new house becomes its own little castle of production and energy efficiency.
The sight of bills in the months or even years to come should be motivation enough to encourage investment in personal and national energy independence.