My UK energy provider says my electricity is produced with 100% renewables, so I presume water, wind, solar. So why am I affected by such big increases in electricity charges (price per kWh)?
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Why does a a dollar cost a dollar? Did you seriously ask this?
Say you’re a vegetarian. Suddenly, all the cows in the world die of mad cow disease. You find the price of carrots shoots up. Why? Because the meat-eaters can no longer get their burger fix, so they have to eat other food, like carrots, so you are now competing with the meat-eaters for carrots, where in the past they really weren’t major carrot fans.
Same with electricity. Renewable electricity is vegetables. Non-renewable is meat. Since meat eaters can also eat vegetables, the increase in demand for vegetables from the meat-eaters increases the price of the vegetables. The veggie farmers make increased profits.
(Actually, this analogy has flaws, because if everyone was forced to become vegetarian overnight, the price of food would probably go down significantly in a couple of years as much the land dedicated to raising food for animals, and in some cases, housing the animals themselves, could be switched to plants human food production, which is vastly more efficient then feeding the plants to animals and then eating the animals. But no analogy is perfect).
To make them rich. Seriously. It had nothing to do with production or maintenance costs or is always too maintain profit levels for the investors.
Because if each energy could set their own prices, all parties would lose out. All the 9subsidised) investments into green energy need to be paid back at least in kind, if not directly. All the kit they have installed to produce energy for marginal running/maintenance costs could see some choosing to risk future upgrades/replacements against a shorter term gain for their investors. So the rule is whether you’re generating your kW by nuclear, wind, air, oil, hamsters on wheels, hydro storage (only joking, that actually works by accepting generational overage at a lower cost, to sell it back later, just like end customers on economy 7 and similar).is that it’s charged at the same prevailing rate as oil/gas generation.
Right now, that seems an unfortunately dumb decision (maybe the price should be capped for the non-fossil options) but it means a lot of money is going into the renewables sector, to be invested in infrastructure, in research and development, and even in them putting some money in the bank so they can survive other glitches (remember last year when the crude oil price went negative ? That’d be… interesting if it had been so bad it made it’s way up to the refinery and out of their doors into power stations).and those newer green energy projects were getting no income for a while, yet compelled to carry on rolling out more capacity.
Supply and demand still factor into renewable energy sources.
With wind and solar your supply is dictated by uncontrollable factors, so price will fluctuate with supply, unlike thermal and hydro where power generation has a igher degree of control, and thus less price fluctuations. Another important factor is energy storage, where a large capacity for storage can smooth out price fluctuations and absorb excess production (although adding costs of its own to the equation), a small storage capacity can result in sudden price increases if prodoction needs aren’t always met.
Demand is simple, how much power is everyone trying to use.
I feel like if you are going to post an answer on these types of subs, you should be REQUIRED to post a Citation showing your credible source.
My job relates to renewable / non-renewable energy production and electricity markets. I’m not based in the UK though, so YMMV.
The short answer is that you buy electricity from a grid. However, there is usually only one grid (not two separate grids for electricity produced from renewable and non-renewable sources). So, when the price of electricity from non-renewable sources goes up, the grid price also goes up.
Renewables biggest problem is that they don’t always produce. There are times there is not enough wind, night, cloudy days, the water reservoirs being too low. So during these times natural gas is used to compensate.
How it works that the electricity provide you choose, provides to the in a periods of time the amount of energy their customers use.
Remember it doesn’t matter where the power comes to the grid, it doesn’t know, it doesn’t discriminate, it is all just potential in the grid. Much like a water tower doesn’t know which bucket was poured in to it.
So when renewable production goes down, gas and other fuels need to be brought online. However when renewables produce extra other power sources can be reduced. Even nuclear power (In reactors that meet European standards (Not EU)) can be adjust at the rate of 3-5% of the primary capacity in minute.
This will be the case as long as we have sufficient energy storage in whatever means it is in, that can handle the average margin of renewable energy.
Electricity is interchangeable. If renewable energy is cheaper than non-renewable, all those people buying non-renewable energy are going to switch to renewable – even if they don’t know it because the power company is doing it for them – driving the price up.
Because a price increase of something increases demand for cheaper alternatives, which subsequently increases those prices as well.
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