Concern over the steep rise in the price of electricity this winter has paved the way for rehashing the old misinformation about the relative cost of generation.  So it is that Carbon Tracker – a non-profit which seeks to focus financial investment on non-renewable renewable energy-harvesting technologies (NRREHTs) – reports that electricity bills are far higher than they might have been because they are based on expensive gas generation.  As Andy Verity at the BBC explains:

“The way electricity prices are set has pushed UK household bills up by £7.2bn over two years…  Under existing rules, energy suppliers pay the highest price for wholesale electricity no matter how it is made.

“Gas-fired power stations are the most expensive way to generate electricity, but only make about 40% of all electricity used by UK homes.  That means homes pay over the odds for power generated any other way…”

Taken at face value, this is broadly correct.  But there is a great deal which needs unpacking here.  Most notably, the way in which “green” energy policy has had a negative impact on the wholesale gas market.  Because, while Verity points to the post-lockdown shortages and energy self-sanctioning (he misspells it “Russia’s war in Ukraine”) as the cause of the recent price spikes, these are only proximate triggers.  The deeper cause was environmental policy which drove energy companies out of long-term gas supply deals in favour of the – far more volatile – spot market.  In effect, having been told by the state that your industry is being phased out, why bother with long-term investment?  One result was the closure of the massive Rough storage facility in the North Sea – which the state is now pledged to reopen – which would have provided the buffer to iron out most of the upward spike in gas prices in 2021.

…click on the above link to read the rest…