By far the cheapest component of our energy supply is the electricity produced by renewables, principally wind and solar. It’s the same story worldwide. But the price of electricity does not reflect the mix of sources. It is set at almost all times by its most expensive component. And what might that be? Oh yes, fossil gas. Even before the current war, gas prices were astronomical, and had been rising in leaps and bounds. This, overwhelmingly, is the reason for our high energy bills.
Nowt to do with CfDs, grid upgrade costs, intermittency, back up requirements, the required subsidies. Oh no.
The only interesting thing is whether Geroge actually believes this shit himself, or not.
Even so, it doesn’t offer this gas to UK customers at special rates. The companies sell it, as everyone else does, on the international market, at the international price. Extracting every last cubic metre from the North Sea would not shift the price by one penny.
Supply goes up, price changes. Sigh.
Perhaps George really does believe this shit?
Renewables are highly competitive and, for this reason, low-profit. Fossil fuels are uncompetitive and high profit.
He certainly seems stupid enough to believe it, yes.
“the billionaire press tell us our energy security will be enhanced and our bills will fall if we abandon net zero policies, ditch renewables and reinvest in North Sea gas.”
Oh, its the press pushing this line, is it?
Moonbatshit crazy.
Monbiotshitcrazy, thankyou….
Astonishing:
Ironically, in Norway, which supplies 76% of our gas imports, gas sets the price only 1% of the time. In fact, the Norwegians scarcely use it for electricity production: hydropower provides 89%,
Are Mad Ed and Monbiot between them planning to raise a new mountain range in Britain?
Slartibartfast is your man. Did some wonderful work on the fjords.
Mad Ed is pining for the fjords?
What kind of talk is that?
I wish someone would throw the fucker in a Fjord…
Or just under a Ford.
I thought that was the mice.
So the UK leading the way in doing away with fossil fuel and that dangerous nuclear stuff choosing instead to prioritise green sources has resulted in our energy prices being among the lowest in developed nations.
It hasn’t? How queer.
He’s right. Renewables are low profit.
But he’s wrong why.
Low energy density, maintenance costs for hundreds of acres of windmills or panels, ancillary equipment like inverters and batteries that are needed to make it work, etc
It only works because the government is stealing everyone’s money to weigh the scales in favour of the renewables.
Mostly because they’re scientifically ignorant and/or paid off by the green industry.
I agree renreables are low profit, yes. But that’s because they’re high cost…..
I think it would be more accurate to say “negative profit, before subsidies”.
Renewables are NO profit.
Any business which cannot match or plan its output to supply demand, which has random, erratic production, and has no production often for long periods and sporadically, has an uncertain, unknown revenue stream will have a liquidity problem and will not be able to make a return on investment. It can never make money.
Apply how a renewables company operates with an airline for example. Aeroplanes are a huge capital investment. They only make money when they are carrying passengers. Aeroplanes sitting about on the ground make no money. The more times during the day a plane can carry passengers, the more money it makes.
So Renewables Airlines has lots of planes, but nobody knows when they can fly. Some of them might fly this afternoon, or tomorrow, or next week but bookings cannot be taken as nobody knows when. Some might start flying but suddenly have to land before they reach their destination. Sometimes after midnight most or all the planes are flying, but carry no passengers.
Summer is a heavy traffic time, but it is impossible to allocate more planes because nobody knows which, if any, will fly. The company decides it needs to buy many more planes, because some of them will be able to fly somewhere all the time.
The problem here is electricity generation is only considered as a technological system, not as a market system.
As an acquaintance said, many years ago, “Buy cheap, buy twice”. He was talking about PTA funding for a new entrance gate for our school. But it works for electricity too.
I always wonder when I hear these maniacs wittering on whether they actually know how much 0.04% is? I’d like to see George or Ed try and grow tomatoes in a greenhouse made of 0.04% glass in Northumberland…
British Gas charges four times as much per therm for electricity as it does for gas. CCGT generators are more than 50% efficient. Therefore it is obvious that electricity produced from CCGT is less than half the average price of UK electricity.
I invite anyone to check their itemised bills to confirm this.
Are Miliband and Monbiot *really* that stupid/innumerate? Or do they just hope that we are?
[Footnote: when they talk about offshore wind the CFDs relate to the price per kWh at the windmill, not the cost at the onshore grid connection which is significantly higher, as may be seen from accounts filed at Companies House]
I do wonder what component of their support for intermittents is ideology and what component is kickbacks.
The two Miliband brothers inherited about a £m – their grandfather moved to France in the 1920s because his popularity rating in Poland was umpteen times worse than Starmer’s after he supported the Red Army’s invasion of his home country.
I think it is reasonable to assume that Miliband’s support is ideological.
You have to factor in that they are both mad.
What does it take to get somebody sectioned under the mental health act?
A photo of them trying to eat a bacon sandwich should suffice.
“Even so, it doesn’t offer this gas to UK customers at special rates.”
No, but HM Government collects an absolute shit load of tax from it. Which is the sensible way to do it. Take a cut as it comes out of the ground, share the wealth with the people. About £4bn last year.
Offering locally-produced fossil fuels at special rates is the kind of brain-dead subsidy you see in places like Nigeria and Iran. Truth is you want to expose consumers and firms to the cost of energy via a price signal, so they can make suitable decisions based on it. If you mask the fact that costs are high you encourage needless over-consumption, which would be a mad thing for a greenie to be arguing for. But he does indeed seem to be criticising the lack of such a subsidy, so more fool him.
Saw this first-hand in Iraq in 2005. Subsidised petrol? Fabulous? Except there was no petrol to be had. It would have been cheap as chips to fill up a car… if only there was fuel to do it with.
Why not? Because anyone with connections, bought everything they could at the heavily-subsidised Iraqi price, drove twenty miles to Kuwait, and sold it for “quite a lot more” there.
Everyone else spent days in miles-long queues hoping that (a) there’d be a delivery (that wasn’t redirected straight to Kuwait), (b) that by the time they got to the pumps there’d still be fuel to buy.
No, we couldn’t get the Iraqi regime to change the policy, because they were getting rich from it and didn’t see any problem.
Thanks Jason.
This is why Venezuela had to ban crypto mining. They made energy so cheap it was worth buying a mining rig and running it. And it caused problems with the electric grid.
So we can scrap all the subsidies for green crap today then? It’s their argument not mine.
“The companies sell it, as everyone else does, on the international market, at the international price. “
Bollocks. There is no ‘international market’ for natural gas as produced out of the ground. There’s an international market for LNG, which is a completely different product, one the UK does not produce. We buy LNG, not produce it. All natural gas produced in the UK would have to be consumed within the UK (plus maybe some parts of wider Europe) and as such the market is far far smaller, and the introduction of extra UK based production would reduce the prices below the global LNG price significantly.
Yes, natural gas prices can vary between continents in a way oil prices can’t – because oil tends to go by tanker, and those ships can sail the oceans, whereas gas tends to go by pipeline and that ties in to regional markets. Like you say, LNG is more similar to oil in that respect but there are relatively few terminals available.
Anyone who doesn’t realise this is in no position to give lectures on how things should be done, because they don’t have a clue.
All that would have been needed to show the error would have been to try and find this so-called “global market price” to quote it.
Price in the USA is Henry Hub, currently 3.26 dollars per million British thermal units .
Price in the EU is Dutch TTF (Title Transfer Facility – as I understand it gets priced in the Netherlands because this is where gas networks interconnect) currently 49.5 euros per MWh. A MWh is about 3,412,141 Btu so that’s 14.51 euros per MMBtu, or 16. 62 dollars per MMBtu.
“Global price” my arse. Look up “TTF-Henry Hub arbitrage” – it’s the reason so much money is to be made sending LNG from the USA to Europe. Though the arbitrage doesn’t happen if European prices are above the marginal cost of exporting LNG, which can still leave a large TTF-Henry Hub spread. You can see historic values of the spread including a time this happened in December 2025: https://europeangashub.com/ttf-prices-drop-below-us-lng-costs-as-the-ttf-henry-spread-tightens.html
But when the spread is high, and it’s been well over $16 per MMBtu before, the profit on sending an LNG tanker across the pond can reach hundreds of millions of dollars. https://observablehq.com/@mrchrisadams/understanding-arbitrage-for-natural-gas
Obviously the really silly thing about this is that it wouldn’t even matter if there were a global price, the argument that “it’s pointless extracting oil or gas because it doesn’t make it any cheaper for us given prices are set internationally” is balls. If prices are shooting up, you want at least some domestic production so your economy has winners as well as losers from the price change. It’s a hedge, and one that supports the Treasury with all those lovely tax revenues when the rest of the economy is getting squeezed.
The stuff complaining about marginal cost of electricity production from gas power stations setting the price is totally disingenuous. If you want extra power at a given moment in time, then – since you can’t just turn the sun or wind on at your convenience – those gas turbines are generally the cheapest place you’re going to get it. Marginal rather than average costs setting prices is exactly what you’d expect to see in a typical commodity market so this isn’t some kind of conspiracy.
It is true that renewables have essentially zero marginal cost – burning oil or gas is expensive in a way that just sitting there and harvesting the sun’s rays is not. But it’s dishonest to promise that renewables will free us from the tyranny of high prices once their marginal costs are setting the prices instead. If we enter a world where zero marginal cost is the norm we will need to switch to an entirely different pricing model because otherwise there’s no incentive to build new capacity.
Building a gas power station is cheap compared to the cost of all the fuel it will burn – investors historically got their return due to the high-demand times when the price is set by older and less efficient generators having to fire up, with their even higher marginal cost. (The full story is a bit more complicated due to the development of markets for capacity etc but that’s the rough idea and shows how marginal cost pricing works in practice – it does encourage building more efficient plants and discourages running inefficient ones unnecessarily. Which is exactly the way you would want such a market to work.)
Building a solar or wind farm is the opposite – the costs are mainly in infrastructure, to some extent servicing, but they aren’t “burning fuel” so marginal costs are more or less zero. If this is what’s setting the price then majority of the time then it becomes impossible to fund such projects. You still need to let investors get a return that outweighs their total costs – the fixed costs aren’t just a rounding error anymore, you need some mechanism that allows them to be recovered. So we never will have a system that sets prices based on the near-zero marginal cost of renewable generation, and we will need to switch to a system based on average costs which are – unsurprisingly – far higher. This whole complaint is just a bait and switch.
Highly recommend the Helm Report as a guide to the basic economics of fossil fuels vs renewables, why marginal cost pricing isn’t as mad as detractors claim it is, and why we will need to switch to a different system (and what it might look like) with the growth in renewables. https://www.gov.uk/government/publications/cost-of-energy-independent-review
All natural resources are free. The wind blows; the sun shines; oil and gas sit there in the ground. All are free to take. The cost is in the taking.
So, when comparing the cost of consuming energy from different sources the entire system cost must be used, which includes resource capture, processing, storage and distribution, and then weighed against practicality and convenience.
On this basis one finds that – who’d have thought it – the energy source which is easiest and simplest to handle, transport and store; has the highest energy density; and is dependably available, will win.
Unless someone has placed their finger on the scales for nefarious reasons.
And I should add to that: the entire system cost must be used over its projected lifetime; the energy source which is easiest, simplest and cheapest to handle, transport and store; has the highest energy density; and is dependably available.
Projected lifetime for most renewables is far shorter them most people are encouraged to think, and infrastructure maintenance costs far higher. Then, you also consider environmental degradation, and strategic reliance on foreigners.
When I replaced the roof on my house I put in a rainwater capture tank to feed the toilet. I’ve recently been annoyed that it’s starting to leak. I have to remind myself that I installed it THIRTY YEARS ago. Stuff doesn’t last forever.
And I should add to that: the entire system cost must be used over its projected lifetime;
We had those discussions on here a long time ago. It was obvious even then that those doing the CBA had their thumbs on the scales: Revenues inflated and costs deflate, especially maintenance Opex for offshore wind.
Amusingly wind turbine blades aren’t recyclable because they’re fibre glass.
I hear (nephew is in the wind business) that some offshore windfarms are looking at replacing their towers rather earlier than planned, because the corrosion resistant steel they bought from China isn’t quite as corrosion resistant as claimed.
On my first project in HK in ‘94 the papers were full of a storey about a canopy that had fallen off the front entrance of a tower block and killed a couple of people. The root cause was dodgy concrete mix and lax quality control.
The outrage was because it was seen as Chinese practices and not HK and a sign of things to come.
Alpha Ventus, Germany’s first offshore wind farm which cost 357 million euro to build in 2010, is being dismantled after only 15 years in operation at a cost of 16 million Euro. It became unviable after the government subsidies were withdrawn (cue the Warren Buffet quote about the only reason anyone builds a wind farm is because of …….).
But “wind is free” shouts Ed Millibrain, unfortunately not from his padded cell…..
If this is what’s setting the price [zero marginal cost renewables] the majority of the time then it becomes impossible to fund
suchany kind of energy projects.Minor clarification…
I’m not altogether following this. If the price is always set at the highest component price, then someone must be making out like bandits. Who is it?
If it is the energy companies, then surely that would show in their accounts and be hit by some special excess profits tax?
Ed Miliband has already imposed a special tax on all providers of electricity produced from fossil fuels – I can’t remember the exact details but last time I looked it was more than the cost of generating electricity from gas
So you should believe Moonbat propaganda instead. Pot, meet kettle.
Wholesale price of gas generated electricity: £60 to £70 per MWh.
Wholesale price for wind: £128.
Yes, government has their thumb on the scale favoring wind/solar. It is artificial. Not market selected.
https://wattsupwiththat.com/2026/03/12/barclays-sounds-the-alarm-on-renewable-energy/
Reality is catching up to government mandate.
The comments are remarkable on that article. It’s a cult.
It is a cult, and as with advocates of DEI these people will need to be removed from any governmental role and ideally taxed either into exile or economic ruination.
As in all cults, most of the faithful are too thick to spot the lies – and I’d include both Moonbat and Mili in this demographic – but the dangerous ones are the fanatics who believe the lies are justified.
Life of a solar farm or wind array, about 20 years
Life of a combined cycle gas generator, about 40 years
Life of a nuclear generator, about 80 years.
The shorter the life, the more renewable it is!
Thank you, philip!!!