Our electricity company claims to supply 100% renewable energy - so why the fuck is the bill going up by so much?

[PunsDontKillPeople]

The sun hasn't got more expensive, and neither have the waves or the wind Is it a supply and demand issue or...?

I don't get it

That is an extremely good question.
I might have the same supplier.
I'm in Scotland where we do have quite a bit of renewable energy production. I'm not that far from some hydro electric plants and wind farms.

Profiteering? Its a really good question as we are being pushed towards using more renewable energy soirces but if they arent cheaper whats the point (i mean i know saving the planet is the point)

Because you’re still attached to the grid and the energy you use is still from fossil fuels. The Company just invests in renewables to offset. But there’s no ‚tracking‘ of energy from different sources

So when they say "what you see should be what you get. Find out how other energy suppliers greenwash by selling fossil fuel energy as renewable – which is something we’ll never do" - they're basically just lying?

@KleineDracheKokosnuss

Because you’re still attached to the grid and the energy you use is still from fossil fuels. The Company just invests in renewables to offset. But there’s no ‚tracking‘ of energy from different sources

So if (prior to this massive price hike issue) a person is paying for renewable energy then the bill is more expensive because "hey look at me Im investing in renewable energy" - all that customer is really doing is paying into the companys coffers because when the crunch comes (as it now is) even the green paying customers are hit with the price hikes!! That really highlights a problem I think. I havent dared to look to see how badly Im going to be hit yet - Im with ovo on a semi green tarrif (I think, must check)

Wholesale natural gas prices are rising rapidly. Most houses have gas central heating which is why fuel bills are increasing by so much.

If it’s ‚Good Energy‘ then they only promise to ‚match‘ 100% of the energy used by customers. so they feed into the grid enough to cover their customers‘ use. However, that energy from those sources won’t be available at all the times the customers are using it (eg solar power not being fed into the grid during the night).

So as I understand it, what actually happens is that you use the fossil fuel Energy - which the company still has to purchase at its current horrible prices - but they later contribute an equal amount of ‚good‘ energy to the grid.

Because they as a Company still have to pay for ‚bad‘ energy, then the price gets passed on to you too.

There’s no separate ‚good‘ Grid.

Imagine a huge batterburg cake with different flavoured insets... that's the grid. Each of the different insets represent a different form of energy... renewables, nuclear, fossil fuels etc.

Let's say renewables = pink. If you have a 100% renewable contract with your energy supplier, that's like paying 100% of your bill to be put into paying exclusively for pink cake batter to be made. However, when the electricity company delivers your "cake" to the door, you will have a standard mixed colour battenburg like everyone else... ie the electrons coming through your wires will be exactly the same energy mix as everyone else attached to the grid at that time.

What it means effectively is that a group of people signed up to the "green" tariffs can feel virtuous, as their share of use comes from renewables, however at the aggregate level across the whole grid/country, it means that people on non-green tarriffs will be paying their bills towards dirty fossil fuels and (potentially) dangerous nuclear... so it all balances out in the end in aggregate.

And that's before we get into the huge problems with renewable energy... humongous amounts of steel and concrete required for the bases of wind turbines, birds' hearts literally explode with steep air pressure variations around them, rare earth metal mining for renewable batteries for EVs and grid storage, and the magnets for wind turbines... it causes devastation and widespread toxic contamination across huge swathes of landscapes like northern Argentina and Baotou in Mongolia. Read the book and watch the documentary "Bright Green Lies" for a critique of renewable energy development (from the point of view of advocating for large scale degrowth in the whole industrial energy sector... it's not shilling for fossil fuels).

A renewable tariff means that either the company buys enough renewable energy over the course of the year go match your total consumption (eg if you consume 300kwh, it buys 300kwh of green power) BUT this is not matched in real time with your consumption. Eg it's not covering 7pm when the sun goes down and you are using the oven, dishwasher and washing machine at the same time.

Or they can buy renewable energy certificates which mean someone else generates the green power - but the principle is the same in that it just matches your annual consumption.

The wholesale cost of power is set by the marginal generator. Imagine a big stack where you put the cheapest generator in first and keep adding power plants which are increasingly expensive to run until you have enough power to meet demand. That's the marginal price - the most expensive plant needed to run to meet demand. It's usually a gas fired power plant.

At times of high demand you need to go further up the stack so your marginal plant gets increasingly expensive as you have go use older and less efficient gas plants.

Much like any other private business, there is no requirement for a renewable generator to sell at a price related to its costs.
Eg I have a dairy herd and make 5 pints per day. Farmer Joe has a dairy herd and also makes 5 pints a day. I am super efficient and can do it at 2p per pint, Farmer Joe is not and it costs him 10p a pint to produce.
A supermarket needs 10pints a day to sell to customers. They will pay Joe 10p per pint - in which case, I can demand they pay me the same (or maybe just under 10p in order to be competitive). Why would I sell milk at 2p when the supermarket is clearly willing to pay 10p?

(Some wind plants do receive subsidies or guarantees so actually they do sell at a fixed price in which case they are currently paying money back to the government but few new onshore wind or solar plants get that now)

Good explanations of why all the electricity costs the same... but why are electricity prices going up when it's gas that's the problem? (I don't have access to gas). Sorry if I'm being a bit dim x

@Queenoftheflumps02

Wholesale natural gas prices are rising rapidly. Most houses have gas central heating which is why fuel bills are increasing by so much.

That isn't relevant to us though as our heating is a biomass system. We don't actually have mains gas to the house so I'm only talking about electricity here!

So really, it's all greenwash.

Honestly.... they are just making more money. Let's call a spade a spade. Who decides energy is more or less expensive? Are we also pretending this is nothing to do with leaving the EU?

@lifesabitchandthenyoudie I thought the same but I read that electric companies use gas to power them so because the gas price is increasing the electric companies are having to pay more to run the plants etc and therefore need to charge more to offset the costs

@Dontknowwhatsnormal thank you, I suppose that makes some kind of sense...

just adds to the 'renewables' fallacy, doesn't it? (I'm a big fan - excuse the pun - but I think there's a lot of 'greenwashing' everywhere)

This is why. Your supplier will still be buying the electricity.

@lifesabitchandthenyoudie

Good explanations of why all the electricity costs the same... but why are electricity prices going up when it's gas that's the problem? (I don't have access to gas). Sorry if I'm being a bit dim x

Gas is used to generate electricity.

OP. if you want renewable only electricity that's not generated with gas, so not subject to the higher gas price, you'd have to not use any when it's dark and not windy.

They did say that one of the reasons why the price of electricity went up late last year, was that it was less windy than average.

The other problem is that they generally can't store electricity for household use, so it can't be saved up from when it is sufficiently windy and/or sunny, although I have seen battery storage systems as an area of research to overcome this.

Gas is burned to make electricity.

Gas is the biggest source of electricity in the UK - it is shrinking because of rising renewables but it will be a few years yet before it is not the biggest.

Even if you don't have gas at home, you are exposed to gas prices because that is how electricity is made. And as above, gas fired power stations are usually the marginal generator.

Gas is a global commodity - the UK imports it on boats from around the world. The UK also produces some gas itself.

The cost of gas has been rising globally - energy companies in the UK have to pay the global marginal price for gas.

The UK government cannot control the global gas market.
Not much they can do in the short term, in the medium term they can support more renewable generation which means less need for gas generation and would reduce our dependence on global gas markets.

And they should support home insulation improvements as the best thing to do economically and environmentally is use less energy

this from octopus - they are affected by wholesale prices which depend on gas.

octopus.energy/blog/the-state-of-wholesale-energy/

Imagine if Electric from gas (Egas) costs £10 to generate and from wind costs £8 to generate (Ewind). But everyone pays £9 for both. Then the price of Egas goes up to £20, so more people want to buy Ewind at £8. but because there is a limited amount of Ewind and now everyone wants to buy Ewind, the price of Ewind also goes up to £15 and we end up paying more.

@PunsDontKillPeople

The sun hasn't got more expensive, and neither have the waves or the wind Is it a supply and demand issue or...?

I don't get it

Part of the problem has been caused by a lack of wind!

www.meteomatics.com/en/low-wind-speeds-and-a-surge-in-energy-prices-whats-the-outlook-for-autumn-2021/

These answers are very misleading. It's nothing to do with the national grid, it's basic supply and demand. The more expensive gas-generated electricity is, the more demand for other sources electricity and the more they will cost.

If gas-generated electricity becomes more expensive than renewable energy then the suppliers switch from gas to renewables and this pushes the price of renewables up until it matches that of gas-generated electricity, at which point they will stop switching.

It's because all the non-renewables they relied on when the sun don't shine and the wind don't blow got a lot more expensive.

@PunsDontKillPeople

So when they say "what you see should be what you get. Find out how other energy suppliers greenwash by selling fossil fuel energy as renewable – which is something we’ll never do" - they're basically just lying?

I think this would be a very good thing to ask them on twitter, if you're on there!

@PunsDontKillPeople A large percentage of the UK's electricity is still produced using gas power plants. So if the price of gas goes up, the cost of producing electricity goes up. Renewable energy does not supply enough electricity for demand.

The Sun may be "free", but the solar panels, wind turbines, transformers, cabling, etc., staffing (maintenance, construction etc) isn't free either.

It's like the old argument by people who object to paying for air at a garage when "it's free" but, again, they ignore the cost of power, equipment, maintenance, etc etc.