renewable energy

medievalbiker

With many companies stating that a large proportion of the electrical energy sold is from renewable sources, why are these prices being affected so much by the cost of gas and oil?

Mstty

medievalbiker said:

With many companies stating that a large proportion of the electrical energy sold is from renewable sources, why are these prices being affected so much by the cost of gas and oil?

Because our renewables create very little in the high usage winter months, less sun, unpredictable winds etc. So they have to burn buckets of gas.

However there are potential moves to distance the electricity price from gas in the future.

Astria

That's the first time I've heard "buckets of gas"

Yes, solar panels don't work so well at night when everyone switches on the lights, TV, etc.

and the sun isn't consistent enough in the UK to have a massive solar powered pumping station forcing water up a hill during the day and letting it drain back down during the night.

pochase

Easy, if the market price for other energy sources goes up so does the price for electricity produced by wind or solar.

For example the Rippleenergy wind farm was working from returns of 4.5p per KWh for the shareholders. Due to the high prices they are now 10p per KWh. 

QrizB

medievalbiker said:

With many companies stating that a large proportion of the electrical energy sold is from renewable sources, why are these prices being affected so much by the cost of gas and oil?

Renewable energy is sold at the market price, and the market price is set by fossil fuels.

Here is an article from The Conversation that explains it in a little more detail.:

https://theconversation.com/renewables-are-cheaper-than-ever-so-why-are-household-energy-bills-only-going-up-174795

However it's not entirely one-sided. Many large renewable energy projects are funded by FITs or CfDs, and these prices are fixed. In low-price years we all pay a subsidy (part of the famous "green levy") but if energy prices exceed the guaranteed rate we get a refund. A negative subsidy in effect.

This is visible on the CfD dashboards.

[Deleted User]

medievalbiker said:

With many companies stating that a large proportion of the electrical energy sold is from renewable sources, why are these prices being affected so much by the cost of gas and oil?

In addition to the answers given above, the term ‘Renewable’ is not always what it seems. A large number of suppliers use the REGO scheme which, for a payment, allows them to claim that their all their energy is Green. A less flattering term for the REGO scheme is Greenwashing.

If renewable energy is as cheap as many people think they why are the 3 suppliers whose energy is genuinely all sourced from renewable sources exempt from the Ofgem Cap? 

https://www.goodenergy.co.uk/not-all-green-tariffs-are-created-equal/