Gas Prices and Energy Policies Under Scrutiny Amid Renewables Debate

In a recent discussion by Paul Burgess B.Sc, MS.C on UK energy prices and policies, significant concerns were raised about the impact of renewable energy on gas prices and the broader energy market. Current gas prices, while lower than their peak at the onset of the Ukraine war, remain high at approximately £65 per megawatt-hour. The reduction in gas prices has been partly attributed to increased fracking in the USA and policy changes under President Trump, which brought prices down to current levels.

Despite these efforts, post-Ukraine war gas prices remain elevated. Effective energy management could potentially revert prices to pre-crisis levels, as gas remains the only power source capable of quickly balancing the intermittent nature of wind energy. Wind energy can fluctuate rapidly, necessitating a controllable backup power source.

Two types of gas power stations are commonly used: open circuit and closed circuit. Open circuit stations, while faster to activate and thus essential for backup, consume about 50% more gas than closed circuit stations. This increased consumption directly impacts gas prices, especially during periods when wind energy is insufficient, and gas must fully take over. This scenario is compounded by the fact that gas plants must maintain their operational and overhead costs despite fluctuating demand, leading to higher unit costs.

The green energy intermittency challenge

The intermittent nature of green energy significantly influences gas prices, with an estimated quarter of the costs attributed to the need to balance supply with fluctuating wind energy. This balancing act means consumers might be paying around £48 per megawatt-hour instead of the current £65.

The discussion highlighted the contrast between renewable energy production and conventional energy demands. Renewable energy sources like wind and solar must be purchased regardless of current energy needs, leading to inefficiencies and increased costs. For instance, solar energy is priced at £85 per megawatt-hour, while offshore wind costs £89, both substantially higher than gas.

The expanding reliance on wind energy is projected to further destabilize the energy grid, with balancing costs surpassing £4 billion in 2022 alone. This increase, tripled since 2019, is attributed to a shrinking baseload and rising grid instability. The inconsistency of wind energy exacerbates these issues, as the grid must adjust for the unpredictable nature of wind production.

Constraint payments

Moreover, constraint payments, where wind farms are paid not to produce energy during low demand periods, have surged. A report indicated that three Scottish wind farms received constraint payments 48% of the time, illustrating the inefficiencies in the current system. The cumulative cost of running wind and gas together, compared to gas alone, has added £18 billion over the past five years.

Future cost projections

Future projections indicate even higher costs, with an additional £60 billion needed to connect and maintain the expanded grid over the next five years. This financial burden will ultimately fall on consumers, contradicting claims that renewables are cheaper. Politicians advocating for net-zero policies and renewable energy expansion are accused of ignoring these fundamental economic realities.

With the UK's recent shift in political power, the urgency to reconsider energy policies intensifies. Critics argue that continuing the current trajectory will lead to untenable costs and energy instability. The debate underscores the need for a balanced approach to energy management that considers both environmental goals and economic viability.

About: Paul Burgess B.Sc, MS.C, a retired Chartered Water Resources Engineer was in charge of water resource planning for large sections of the UK and sat on national UK committees. Before he retired he represented the whole of the country of Wales where he was responsible for planning water supply, flood protection, reservoirs, hydrological and weather monitoring. He built the first mathematical model of the climate back in 1971. Retiring early from the water industry, Paul set up his own business. In the early 2000’s, Paul became aware of the growing corruption of science by the climate alarmists and then started making videos to counter the alarmism. He now has over 80 videos on the subject. He gives talks all over the UK all at his own expense in order to further the cause he feels so passionate about.