The Substack article titled “Renewables are more expensive than gas” presents a viewpoint that is contradicted by extensive data from leading energy agencies and recent studies. In reality, renewable energy sources like wind and solar have become not only cost-competitive but often cheaper than fossil fuels, including natural gas, especially when considering long-term trends and system-wide costs.
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✅ Fact Check: Renewables Are Now Cheaper Than Gas
📉 Global Cost Trends
According to the International Renewable Energy Agency (IRENA), in 2023, the global weighted average levelized cost of electricity (LCOE) for newly commissioned utility-scale solar photovoltaic (PV) projects was 56% lower than that of fossil fuel-fired alternatives. Similarly, onshore wind projects had an LCOE 67% lower than fossil fuel-fired alternatives. These figures highlight a significant cost advantage for renewables over traditional fossil fuels. 
🇨🇦 Canadian Context: Renewables Outcompete Gas
In Canada, studies have shown that wind and solar energy are already more cost-effective than natural gas in provinces like Alberta and Ontario. For instance, in Alberta, solar power costs around $0.06 per kilowatt-hour (kWh), and wind power costs about $0.05/kWh, both competitive with or cheaper than natural gas. Projections indicate that by 2035, wind power could be 40% cheaper than gas-fired power in both provinces. 
🔋 Renewables Plus Storage: A Competitive Edge
Advancements in energy storage technologies have further enhanced the competitiveness of renewables. In Alberta and Ontario, combinations of renewables with storage solutions are already cost-competitive with natural gas. For example, wind paired with storage is currently cheaper than gas-fired peaker plants in both provinces. Even solar combined with storage is projected to become more economical than gas by the early 2030s. 
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⚠️ Addressing Misconceptions
• System Costs: While the article suggests that integrating renewables incurs higher system costs, it’s important to note that the declining costs of storage and grid management technologies are mitigating these expenses.
• Gas Price Volatility: Natural gas prices are subject to market fluctuations, geopolitical tensions, and supply constraints, leading to potential cost spikes. In contrast, renewables offer more stable and predictable pricing.
• Global Trends: Countries worldwide are increasingly investing in renewables, recognizing their economic and environmental benefits. For instance, China’s significant investments in renewable infrastructure have positioned it as a global leader in clean energy technologies.  
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📚 Conclusion
The assertion that renewables are more expensive than gas does not align with current data and trends. Renewable energy sources have become more cost-effective, offer price stability, and contribute to energy security. As technology advances and economies of scale are realized, the cost advantages of renewables are expected to grow even further.
For a more in-depth analysis, you can refer to the full IRENA report: Renewable Power Generation Costs in 2023.
LCOE is a flawed measure, highly sensitive to capex and cost of capital. Global averages are pointless, particularly for solar because the output is highly latitude dependent. They might achieve 25% LF in Texas, but in the UK only 10%. Moreover, they don't take account of balancing and backup costs.
By all mean challenge what I write, but make sure you come armed with better "facts" than IRENA models or cut and paste of some AI LLM.
The article above is using data from the LCCC, Ofgem, DESNZ and NESO. There are links for you to follow and download the data yourself.
You’ve asked for real data, not models, and cited LCCC, Ofgem, DESNZ, and NESO. That’s fair—and I’ve gone straight to those sources. But respectfully, their data doesn’t support the claim that renewables are more expensive than gas.
1. CfD Strike Prices Undercut Gas
From the LCCC’s own data, the most recent UK Contracts for Difference auctions show wind and solar consistently clearing far below the cost of new gas:
AR4 (2022):
Onshore wind: £42.47/MWh
Solar PV: £45.99/MWh
Offshore wind: £37.35/MWh (LCCC source)
By comparison, DESNZ puts the levelised cost of electricity (LCOE) from gas-fired generation—including fuel—at £85–95/MWh and rising, especially with gas price volatility:
📄 DESNZ Electricity Generation Costs (2023)
2. Ofgem: Renewables Lower Wholesale Prices
Ofgem has explicitly acknowledged that renewables lower wholesale prices via the merit order effect, displacing more expensive marginal gas generators:
📄 Ofgem: Renewables and the Merit Order Effect
3. Balancing and System Costs Are Accounted For
The claim that renewables don’t account for balancing and backup costs is incorrect. DESNZ’s modelling does include these costs. Even after accounting for intermittency and system balancing, wind and solar still come out cheaper than new-build gas.
The National Grid ESO’s own Future Energy Scenarios also make clear that renewables are the lowest-cost route to decarbonization, with system costs included:
📄 FES 2023 – National Grid ESO
4. Solar Load Factors Are Accounted For
Yes, solar in the UK has a lower capacity factor (~11%) than Texas, but that’s already reflected in project economics. CfD auction prices, O&M costs, and local irradiance are all factored into the market bids. Solar is expanding in the UK precisely because it’s profitable despite the lower LF.
In short: If we go by UK data rather than global averages or models—as you requested—wind and solar remain the cheapest new sources of electricity on a per-MWh basis. The data from the agencies you reference confirms this.
Active CfD offshore wind costs ~£158/MWh, onshore £117 and solar about £77/MWh in today's money. New farms won't bring down the average much, if at all, as indexing take place every year.
AR4 contracts have been cancelled and part of others re-bid.
DESNZ Gen Cost 2023 puts the LCOE of CCGT gas-fired electricity for 2025 delivery at £114/MWh, but £60 of that is carbon cost, meaning the cost of gas is £54/MWh.
Yes, when there's a lot of renewables on the grid wholesale prices will fall. That only increases the subsidy component of CfDs and doesn't affect FiTs. ROCs will receive slightly lower total payment.
DESNZ LCOE figures in the Gen Cost report do not include balancing or backup, nor decommissioning.
Load factors are not the same as balancing and backup. They use very optimistic load factors for wind, far in excess of what is achieved in practice.
Appreciate the detailed reply. A few clarifications are in order.
1. CfD “Active Costs” Are Not Market Prices for New Renewables
The £158/MWh figure for offshore wind you cite is the current payment under older, legacy CfD contracts struck at a time when costs were much higher. It’s not the cost of new wind.
• The actual cost of new offshore wind, per AR4, was ~£37.35/MWh in 2012 prices (~£48/MWh real-terms).
• Yes, some AR4 contracts were withdrawn or delayed due to inflation, but this doesn’t mean the new-build cost is £158/MWh—it means early CfDs are still indexed for inflation. That’s how the scheme was designed.
• DESNZ and the LCCC continue to show falling costs for new projects across multiple rounds.
If you’re arguing we should assess the cost of the technology, then looking at CfD bids from recent auctions—adjusted to real terms—is the appropriate measure.
2. Gas at £54/MWh? That’s Misleading Without Carbon Pricing
Yes, DESNZ shows £114/MWh for CCGT in 2025, including carbon pricing. But carbon pricing is a real, inescapable cost—not some imaginary add-on. You can’t ignore it unless you’re proposing that polluters should no longer pay for emissions.
Even stripping it out, you get £54/MWh—but:
• That still doesn’t include capital costs or balancing risks from volatile gas markets.
• It also ignores geopolitical risk, which is non-trivial post-Ukraine.
And crucially, that’s still more than new onshore wind and solar in AR4.
3. System Costs and Balancing are Not Ignored by DESNZ
You’re right that headline LCOE figures don’t include system costs. But DESNZ does separately estimate these in its modelling, and so does the National Grid ESO:
See Annex E, DESNZ Gen Cost 2023 – System Integration Costs
• Integration costs for wind/solar remain small relative to the fuel cost volatility of gas.
• The system is designed to manage intermittency through storage, interconnection, and demand response—all improving yearly.
4. Load Factors Are Conservative, Not Overstated
• DESNZ uses a wind LF of 50.7% for offshore and ~36% for onshore in 2025–2030 ranges—both based on actual performance from operational UK assets.
• BEIS and ESO data show the UK already averages around 45–50% offshore LF in newer projects.
Claims of “very optimistic” LFs just don’t line up with observed capacity factors from Hornsea 2 or Triton Knoll, for example.
5. Wholesale Price Suppression Isn’t a Flaw—It’s a Feature
Yes, renewables depress wholesale prices. That’s how they save consumers money. The notion that this somehow increases subsidies misreads how CfDs work:
• CfDs are hedges—they protect against high prices as much as they “top up” during low ones.
• When market prices are high (as in 2022), generators pay money back to consumers—and they did. Offshore wind returned hundreds of millions to the Treasury.
LCCC Reports Record Payments Returned from Renewables (2022)
Summary
You’ve cited the right datasets but drawn the wrong conclusions:
• Legacy CfDs ≠ current build cost.
• Gas ≠ £54/MWh in any realistic policy environment.
• Balancing costs are known, manageable, and already improving.
• UK wind load factors are based on hard data, not wishful thinking.
I didn't say £158 represents current build costs. But strike prices have risen since AR4. The £85 (2025 prices) offered to Hornsea 4 was not enough, so they canned it. £10 more than current market price, driven by gas with a carbon tax.
Balancing costs are rising as are backup costs. OBR forecasts backup going up from £1bn in 23/24 to £4bn in a few years.
Capex for gas fired generation is included. About £7 from memory.
Load factors for wind in Gen Cost report are far higher than has ever been achieved by our wind fleet in any given year. And they assume that for the life of the asset. LFs tend to fall after about 10-12 years operation.
You’re raising valid concerns, but they don’t change the bottom line: new renewables are still cheaper than new gas—even when accounting for balancing and backup.
Strike Prices
Hornsea 4 didn’t proceed at £85/MWh, true—but that’s still £29/MWh cheaper than new gas with carbon (£114/MWh). You can’t just strip out carbon and call gas £54/MWh—carbon pricing is a real market cost, and UK policy is Net Zero-aligned.
Backup & Balancing
Yes, OBR forecasts backup costs rising to £4bn/year—but that’s under 10% of total UK electricity spend. These costs are falling with more storage, interconnectors, and demand flexibility.
CAPEX and LCOE
Gas capex (~£7/MWh) is included in DESNZ’s LCOE—just like in wind and solar CfDs. Let’s be consistent: either include full system costs for all techs or none. You can’t pin system costs only on renewables.
Load Factors
DESNZ uses LF from new projects like Hornsea 2 and Seagreen—50%+ is already being achieved. Lifetime degradation is included in sensitivity analysis. We don’t discount gas LFs for aging plants either.
Summary
• New renewables are still cheaper than gas on a full-cost basis.
• Backup costs are rising—but still manageable.
• Real-world data from DESNZ, LCCC, and ESO supports this.
There is a marked contrast between academic studies (Lazard, DESNZ, CP2030 assumptions etc, etc) that say LCOE for grounded offshore wind is less than GBP 50 / MWh, and the commercial reality of what companies like Orsted will accept. The recent AR6 auction was at GBP 85 /MWh and then Orsted backed out of the 2.4 GW Hornsea 4 project for commercial reasons. If there is no commercial case at GBP 85 / MWh what is the real commercial rate required to build offshore wind.
Appreciate the new post. But this is a definitional sleight of hand—no serious agency defines fossil fuel subsidies solely as “net tax transfers.” The IMF, IEA, OECD, and UK Treasury all define subsidies more broadly to include underpriced externalities, tax breaks, and consumption support.
1. Governments can collect fuel taxes and still subsidize fossil fuels
It’s not either/or. The IEA, IMF, and OECD have been crystal clear: if fossil fuels are sold below their full economic cost—including pollution, health, and climate damage—they’re being subsidized.
IMF (2023): “UK fossil fuel subsidies totalled $46 billion in 2022,” most of it from unpriced carbon and VAT exemptions.
2. UK Treasury identifies tax breaks and support schemes as subsidies
Even without carbon pricing, the UK Treasury lists:
• Reduced VAT on domestic gas/oil (5% instead of 20%)
• Tax relief for North Sea oil and gas producers
• Fuel duty freezes (costing ~£6bn/year)
Those are explicit subsidies by UK accounting standards.
UK Green Budget 2022 – Fuel Duty Costing
UK Parliament Briefing on Fossil Fuel Subsidies
3. Collecting hydrocarbon taxes ≠ No subsidy
Cigarettes are taxed too—does that mean we “subsidize” tobacco harm by not taxing it more? Of course not. Subsidy = deviation from efficient market pricing, and fossil fuels are massively underpriced when pollution and climate costs are excluded.
Bottom line: The Exchequer collecting fuel duty doesn’t negate the existence of fossil fuel subsidies. It just means we tax some of the harm—far less than its true cost.
If we’re serious about fair comparisons between energy sources, we need to count all externalities and policy support—on both sides.
So basically, the IMF (and for that matter the Guardian) thinks that if you don't tax something as much as they think you should, then that's a subsidy. It's absurd.
The Government said in 2021 that the UK doe snot subsidise fossil fuels.
You’re quoting the 2021 UK government position, which defines subsidies narrowly—essentially as direct cash payments or “production support.” But that’s not how the IMF, OECD, IEA, or even the UK Parliament Research Library define it.
1. “Subsidy” ≠ Just a Handout
You’re mocking the idea that under-taxation counts as a subsidy—but that’s exactly how global public finance works. A subsidy is any policy that lowers the cost of fossil fuel production or consumption below its full social cost—whether through:
• Tax breaks
• Below-market VAT
• Unpriced externalities (climate, air pollution, etc.)
As the OECD puts it:
“A subsidy exists when a government action lowers the cost of production, raises the price received by producers, or lowers the price paid by consumers.”
OECD Fossil Fuel Support Database
IMF Working Paper: Still Not Getting Energy Prices Right (2023)
2. UK Treasury & Parliament Have Acknowledged Fossil Fuel Support
Even the UK Parliament briefing paper (2023) you dismissed states:
“The UK has committed to phasing out fossil fuel subsidies under the G7 and G20, but there is no agreed definition of ‘subsidy.’ Depending on the definition used, the UK either has or does not have fossil fuel subsidies.”
Parliament Research Briefing – Fossil Fuel Subsidies
So yes: the Government says “we don’t subsidise”—by using a definition that excludes tax breaks, VAT reductions, and the costs of environmental harm.
3. This is about full economic cost—not political framing
It’s not about what the Guardian or IMF wants to tax. It’s about whether fossil fuels are priced to reflect their true cost to society. Right now, they’re not—hence the global push to end implicit subsidies.
I don't love fossil fuels, yet this "subsidies" gave us something of true value, secured the modern way of life(which is not a bad way of life in general- minus SUVs, urban sprawl and few other negatives). All depends how much we get for subsidizing certain industries. France got quite good value in term of cheap power, good jobs, lessened dependency on volatile countries supplying fossil fuels- and 40years of ultra low emissions already from electricity production. Germans get really poor value for subsidizing wind and solar in terms of electricity (8times more CO2 intense than France) and much more expensive at that, responsibility for feeding putins war empire with dirty gas money (France didn't have to do it). Just to give few real world examples.
Subsidies should be judged not just by short-term electricity prices but by long-term climate impact, economic resilience, and technological progress. Fossil fuel and nuclear subsidies helped in their time but came with massive costs. Renewable subsidies are giving us cheaper power, less pollution, and energy security in a warming and unstable world. That’s real value.
Hi Clifton, Please try reading with understanding. Political decision of France(and Finland, Ontario, Sweden somewhat similarly) and investment made about 50 years ago did have lasting positive impact on power prices, reliability, much less pollution, enormous greenhouse gas reduction. I don't see enormous "costs", even if not everything is perfect about Frances energy system (they forgot promoting benefits to people, building fast), it is far superior than in most places.
No need for large scale batteries (that don't exist)
No need for "backup bridge fuel" gas from Russia(or other places, which will be needed practically forever)
No need to rely on cheap solar PV from abroad (similar risks like sending money to putin)
Less whining, more doing and looking at real world examples not promises, and models.
I am a fan, and enjoy details, but can you bear to produce a simplified version giving the Subsidies as a total for wind and solar? Currently the main points risk being lost by the different subsidies. Of course, that is what the authorities want
Not only do these charts fail to record the true cost of required backup to combat intermittency and unpredictability but they fail to account for geopolitical risk (being unable to compensate for hostile powers cutting off supply - when we could have our own domestic supplies of gas/oil). But there is more. These figures for gas include a carbon TAX. The figures for renewables include the given selection of SUBSIDIES. Taxes are the opposite of subsidies.
Green jobs are not appearing whilst British industry is being destroyed due to high energy costs.
British pensioners are dying in their thousands every year due to fuel poverty whilst billions in subsidies are being given to intermittent renewables.
Natural gas is imported from the US and Qatar whilst North Sea gas and oil is shut down.
Indeed this is the travesty of the mad cat rush to 2030 which is barely achievable but totally unachievable unless 60-70% of the equipment and services are imported.
I just cant get why the TUC and the unions aren't all over this rather than being impotent and standing by while UK oil & gas produces ditch well paid jobs.
On an ethical basis how does the Labour Government justify cutting the Winter Fuel Allowance saving GBP 1.3bn, whilst maintaining renewable subsidies of GBP 12.3 through environmental charges on electricity bills, whilst 3,000 to 5,000 people die each year from fuel poverty, unable to heat their homes properly. This is the fraction of Excess Winter Deaths (10% of 30,000 to 50,000) attributable to fuel povert.
Who voted for this? If it was out of ignorance then it needs to be made clear to everybody what they are voting for when they vote for the current NetZero policy.
Given a chance would they change that vote?
The UK produces 0.8% if global CO2 emissions. Allowing UK pensioners to die is not going to save the planet.
To understand and support this analysis I made my own estimates of the cost of renewable energy for the UK grid, without breaking out every generation type and incentive scheme. The conclusion is in the same range.
In 2024, renewables generated 50.8% of the UK's electricity 145 TWh out of a 285 TWh total.
The compensation received by renewables consists of the IMRP (Intermittent Market Reference Price) plus top ups from the various schemes (Contract for Difference, Renewable Obligation Credits, Feed-in-Tariffs, Constraint payments).
The 2024 IMRP averages to GBP 75 / MWh.
The subsidy schemes total a net GBP 12.29 bn contribution to renewable generators on top of the market price for a total 145 TWh: GBP 85 / MWh.
So, my gross estimate of total compensation for renewables is about GBP 160 / MWh.
On top of this, there are balancing costs (GBP 2.5bn) and capacity backup costs (GBP 1bn). If attributed to intermittent renewables of 145 TWh, this is an additional cost of GBP 24 / MWh.
For a total cost for intermittent renewables of GBP 184 / MWh.
That's before the grid build-out costs of GBP 10bn / year.
Nuclear power is estimated to costs £80–£120/MWh for nth of a kind pressurized-water reactors (EPRs), Hinkley C comes to £130/MWh as a first of a kind project.
Lessons learned from South Korea could further reduce these costs.
South Korean APR1400s that have actually been built at a calculated cost of £46–£65/MWh over 60 years at a 90% capacity factor. (Lessons to be learned, but UK costs are still likely to be higher due to labour costs and regulation). This estimate includes costs of decommissioning over 60 years.
Disposal of high level nuclear waste, following the Finnish example of burying high level waste in 500m boreholes into granite and using multiple barrier technology at the Onkalo site, comes at a cost of $1-2 / MWh for the electricity generated.
Roughly speaking, this simple analysis suggests carbon free baseload nuclear can be delivered for half the cost of intermittent renewables requiring gas turbines for backup and balancing, and grid build-out to get it where it is needed. Batteries for diurnal balancing might address the need for dispatchability.
With 0.8% of global emissions, the UK doesn't need to race to NetZero but should pursue a steady reintroduction of nuclear power. Both large (1.3 GW) PWRs at legacy nuclear sites and SMRs at legacy coal sites to leverage existing grid Rights of Way (they may need HV upgrades).
A policy of high energy costs and energy rationing has its own ethical questions.
I can find a wide range of figures (30 - 50,000) for excess winter deaths but, putting aside COVID and flu, figures of around 10,000 deaths annually in the UK are linked to cold homes, with 10% of excess winter deaths (roughly 3 - 5,000) directly tied to fuel poverty.
IMHO, Ed Milliband's NetZero policy needs to be challenged on both cost and ethical grounds.
At the very least, this is the basis for an informed debate on how and how quickly the UK gets to NetZero.
Very nice summary. The key is that nearly every MWh of renewable energy comes with generous subsidy costs attached and the whole system costs of integrating them are even higher. That means that electricity actually costs more on data with high renewables output, although the billing is disguised by the subsidy mechanisms.
Some additional info:
FiTs have been indexed by RPI of 5.2% and 3.5% over the past couple of years, which if we assume similar average composition of generation would push them to £240/MWh today for 2025-26.
You quote the ROC cashout price, but generators actually get paid the economic value of certificates, which is higher. The calculation actually builds in an expected shortfall of 10% in real ROC supply, but low output aggravates the shortage, pushing up recycle values and ROC prices. The shortfall means more cashouts must be paid, and these are recycled to the actual ROC buyers which in turn means they will pay a premium to cashout value to generators. To the extent that they do not pay full value to generators (or even overpay through wrong forecasts), this affects the balance between generators and retailers. However, the scheme cost to billpayers is set by the full recycle value. My current estimate for 2025-26 is £75/MWh, corresponding to a 12% uplift.
You didn't include REGOs which add another 10-15/MWh to all renewables except small scale FiTs where the costs of claiming are high relative to the benefit.
The sums around biomass are complicated. The CFDs are priced against Baseload Market Reference Price which is set for the summer (Apr-Sep) and winter periods. The result is that Drax and Lynemouth treat the difference with their strike price as a fixed subsidy (or tax as its was during the energy crisis), and operate on day to day pricing alongside their ROC subsidies valued against fuel cost. Drax has a cap on its ROC subsidy volume, so once this is reached the economics depend on pure costs against market prices. They do hedge a significant share of output via forward sales. However, when e.g. solar pushes middle of the day prices too low, they will cut output and buy in solar or wind against their forward sales either explicitly or implicitly. The reduced output in low price hours increases their average sales price.
You noted that solar is getting less average proceeds than the average cost of gas fired generation - thus actually disproving the thesis that gas sets prices almost all the time. However, it doesn't really reflect what consumers end up paying, since a chunk of solar output is effectively used to charge batteries which then resupply (less round trip losses) into the early evening market at a premium that helps pay for their cost. Batteries also charge up overnight when prices are lower, particularly when wind output is higher. Other chunks of cost come from payments for ancillary services they provide, though those are perhaps more in the realm of balancing costs. Nevertheless we could add say £80k/MW of battery capacity as typical income over a year for now around 4GW, so another £320m of costs.
Allocating costs of balancing and the Capacity Market gets trickier when you delve into it. Most curtailment payments historically were to onshore wind until unsubsidised output from Moray East and Seagreen entered the picture. Almost no other offshore wind gets curtailment payments to any significant degree so far. Offshore wind does curtail voluntarily when market prices are negative and their CFD doesn't pay any compensation.
I thought it simpler to just apportion the balancing and backup costs across the whole intermittent generation, although I did think it might get more complicated, but I don't know of any data to give a definitive share.
With batteries if they can charge up during times of low demand and thus price and sell at higher price into the peaks presumably as their volume increases it will act as a dampener on the peak load price as there will be less need to use higher cost gas units? Albeit I get they will still benefit from the capacity mkt to ensure they stay available.
Curtailment costs are particularly high currently as there are significant grid upgrade works across the SHET/SP boundary as well as down into the Central Belt and on into England. Moray West sits behind the B0 boundary & Seagreen sit behind the B4 boundary both are running at 50-60% of capacity. In the case of B4 thats a reduction of 1.6GW. These outages are planned to continue for years and largely represent current works to connect further onshore wind onto the grid so as the awfully titled "Great British Grid Upgrade" gets under way we will see further long term outages constraining grid capacity. Irrespective of your views on the need for CP2030 the rush to achieve it is going to lead to even more curtailment although weak wind output currently is masking that. Couple that with stretched global supply chains and the folly of CP2030 becomes even more evident. Thus a recalibration to 2035 and beyond makes economic sense as well as being a starting point of driving a wedge into at least stalling anymore renewables.
The question is do they even know they are lying any longer?
So many of the contributions referenced the same study from 2021 that is out of date and isn't measuring what it is claimed it is measuring: effectively it says that the cost of generation from gas is largely correlated with the gas price. Moreover, the idea that all generators are paid the same market clearing price is completely wrong. That system went out when we ditched the Pool almost 25 years ago.
Thank you David. From the Energy Bad Boys' latest substack article, calling for a rapid end to subsidies for intermittent energy sources: "Without your money, wind and solar would be living in a van down by the river".
None of this accounts for the cost when a foreign country 'accidentally' severs several of our largest offshore wind farms simultaneously by dragging a huge anchor across the sea bed. The impact on a grid that has nearly no gas and few nuclear powerstations would cost upwards of £200bn to the economy because we would be forced into rolling blackouts for weeks, energy prices will spike, and the connections will need remaking and burying in concrete. Non trivial. Then, more generally, are the life span costs of wind and solar. They simply don't have the same life span vs. Gas, and nuclear. If you look at total costs over, say, two full SMR life cycles its immediately clear that wind and solar are a stupid idea. They will need a minimum of 6 replacement cycles for the same period. I don't want to rant but the only possible reason these other proposals are so mind numbingly stupid is money. Money they will receive. It's pure and simple short term greed and it is already causing us all hardship and suffering.
With the greatest of respect no they don't. Labour’s Clean Power 2030 Plan Energy Mix (2030 Projection): Labour’s plan targets 70% renewable generation by 2030: 50 GW offshore wind (175 TWh, 50% of demand), 20 GW onshore wind (70 TWh), 45 GW solar (50 TWh), with the rest from gas (20%, 70 TWh, 15 GW), nuclear (8%, 28 TWh, 5 GW), and imports (2%, 7 TWh). Total demand is ~350 TWh. Vulnerabilities: Losing 40 GW of offshore wind (40% of supply) due to severed interconnects leads to rolling blackouts for weeks, a 5-10% GDP loss (£150-300 billion), and geopolitical tensions. Offshore wind’s reliance on vulnerable submarine cables and lack of redundancy is a major risk. Where exactly are they going to find 40 GW?
Storage and Backup?
10 GW of batteries can supply 40 GWh, covering 1-2 hours of demand—not enough for weeks-long outages. Gas plants are limited by fuel reserves (the UK has 5-10 days of gas storage, per 2024 data).
Demand Response:?
Smart grids can reduce demand by 5-10 GW, but not 30 GW, and public tolerance for sustained cuts is low.
Interconnectors?
Imports are insufficient.
Redundancy?
The grid lacks redundancy for 40 GW of offshore wind. Future designs might split interconnects into smaller, distributed links, but this isn’t in place by 2030.
So if, say, Russia had two or three ships drag anchors, and/or blow up a gas pipeline NESO are not going to pull enough energy out of anywhere to save us.
Firstly I don't agree with CP2030 or its predecessors but short of an Iberian grid collapse I'm not sure the general populous will wake up to what is happening. This is unlikely as our grid is run to one of the highest standards in the world in securing it against multiple outage scenarios. It also recognised a long time ago that it needed new tools to manage a more renewable centric grid hence we now have a whole host of ancillary services largely provided by batteries. But to me the key reason why we can keep the lights on is we are keeping 35GW of unabated gas which even Milibrain accepts. Of course it will cost more but he's not bothered by that minor detail hes only interested in getting his plumb job at the IPCC.
Ah, I see, so the assumption is that with gas running at 100% capacity we would have just about enough power to avoid large scale rolling blackouts. Of course, removing all that wind would ironically help with grid balancing! We would still need to find about 5GW and also hope the 'accident' didn't happen in the winter. We need more gas using north sea reserves as a stop gap, get Hinkley deployed and another on the way and increase the % nuclear makes up in their plan by getting some SMRs deployed. Two SMRs would power wales heating and avoid installing 500k heat pumps twice (two full life cycles) via electrification.
Interconnectors are also vulnerable to submarine/trawler attack. Already demonstrated at IFA1 which was half out of action for about 6 months; possibly a reason for some of the problems with Western Link HVDC (but nobody is saying), and the Baltic interconnector between Finland and Estonia.
That's my point. I would be going: gas (bridging fuel) + big nuclear + smr on old coal sites + insulation program. Sure it takes longer but we are already tiny fish in a big pond. If China, India or USA made progress it would have a huge effect compared to our dumb arse 'race' to obscurity and economic disaster.
I would go easy on the insulation unless it has a rapid (<7 year) payback. Recent studies show the government programme won't pay back for over 100 years. That means never by the time you add financing costs and building lifetimes.
Payback is that relevant really it should be about how effective it is and the sad reality is much of British housing stock doesn't lend itself to being able to well insulated. Mind you as its warming up thats less less of an issue!!
It is shocking that the establishment lies so blatantly about their so-called renewables when they are such unsustainable, inappropriate technologies and should never have been embarked upon in the first place, as the late chief scientist Sir David Mackay warned many years also. It is difficult to avoid concluding that the establishment is deliberately setting out to wreck our energy infrastructure.
They ignore the near certainty of rolling blackouts when the grid has been decarbonised (supposedly) and we have no wind and no sun for days or even weeks on end and the backup interconnector supplies from similarly-stricken Europe dry up. They ignore the near certainty of Iberia-type blackouts when Miliband has deployed a massive over-supply of fickle and uncontrollable non-synchronous wind and solar. Then there is the scandal of unsustainable biomass which creates more CO2 emissions than the coal it replaced. The combination of nuclear and weather dependent renewables doesn’t work very well either, as France is beginning to find out: https://principia-scientific.com/expanding-frances-power-grid-with-more-wind-and-solar-poses-serious-risk/.
The establishment ignores the fact that there is no empirical proof that CO2 emissions cause dangerous global warming when trustworthy science says the effect is logarithmically minimal. They also ignore the fact that the majority rest of the world is never going to give up using fossil fuels which renders our unilateral Net Zero strivings utterly pointless. They ignore they fact that reaching their Net Zero nirvana would lead to societal collapse when all their wind and solar plants fall to bits at the end of their short service lives, unable to be replaced because by that time we will have no fossil fuel-powered heavy manufacturing and transportation facilities.
We urgently need to vote the Uniparty proponents of the climate change hoax out of office and unwind the destruction they have wrought on our energy systems before we reach a tipping point of no return.
I’m starting to suffer from an overload of renewables/Net Zero debunking! In addition to all the good work of our host, here are two other experts on the same subject. They may have collaborated as they have both come up with the figure of £220 billion wasted to date on renewables.
First, a 54-minute interview of energy analyst Kathryn Porter entitled “We spent £220 billion on renewables …” covering Blackouts, Energy from abroad, Why blackouts are dangerous, Britain's energy setup, Clean Power 2030, Why are our bills so high? The future of Net Zero, What's the energy solution? China's role in the green revolution: https://www.youtube.com/watch?v=MPydWl5Djxs.
Second, a 37-minute interview of Dr John Constable of the Renewable Energy Foundation entitled “The £220 billion lie” by a not very well-informed GB News reporter (maybe feigning devil’s advocate to placate Ofgem): https://www.youtube.com/watch?v=LP4CViALhV4
both good interviews but playing to a receptive audience. What we need is Panorama / Dispatches type episode to get at a wider audience that really needs to be influenced to get change going
Thanks, but Panorama (BBC) and Dispatches (Channel 4) are both completely bought-and-paid-for establishment propagandists. I’m afraid that the day either of these channels does an honest report on renewables/climate change will be the day that lots of flying pigs are seen!
I wonder who watches Panorama these days. It used to produce bombshell reports that were widely discussed in the press and Parliament. It's a long time since I've heard of anything from them.
The problem is though you need communication channels that access the wider community that needs to be influenced if we are to change the direction travel we need consumers to be pushing back.
How do you get the MSM to promote facts and opinions which they are paid to oppose? That’s why I keep plugging the line that our only hope is to get rid of the Uniparty, as Trump and the common-sense electorate of the US have effectively achieved in the USA.
Im not sure they lie intentionally but just parrot back the flawed information they have been fed rather than satisfy themselves that it is sound.
This is the circle that needs to be broken and until it is we will be fighting against a wall of group thinkers who by sheer volume alone just overwhelm the opposition. Im also fearful that the few politicians questioning this tend to be on the right and are coming at it from a political point scoring angle and are largely being discredited by the MSM.
In the short term can't see Milibrain shifting his stance or being forced off his perch so he will continue to double down only if to create an illusion that he's delivering CP2030 as this is all about him getting a plumb job in the IPCC.
Over the past 25 years I have written to umpteen different politicians to spell out why their climate change policies will lead to disaster. I’ve never, ever had a coherent, reasoned reply that addressed the specific points I raised. That tells me that they know their policies will lead to disaster but they dare not admit it. How can they possibly be unaware that Net Zero is getting nowhere other than leading to deindustrialisation, impoverishment, rolling blackouts and Iberia-style grid shutdown?
They simply toe the party line which is laid down for them by the behind-the-scene globalists who call the shots. The entire Net Zero spiel originated from the United Nations “Special Report on Global Warming of 1.5 Degrees” published in 2018. The malfeasances of Uniparty politicians during Covid confirmed that that their first loyalty is to the globalists, not to the people who elected them.
Try asking your own MP the questions implicit in my post above, e.g. what is the point of the UK attempting to achieve unilateral Net Zero and see how far you get. A few of the backbencher MPs are probably stupid enough to believe the climate change propaganda but the leaders must fully understand what they are doing. They all need to be swept away.
Your concern that the sceptics are "on the right” is misplaced. That’s how anyone who goes against the establishment narrative gets pejoratively labelled (usually far-right) by the globalists and the bought-and-paid-for MSM. Right versus left is no longer meaningful in politics; the reality now is democrat (emphatically not in the USA party-political meaning) versus globalist, in the extreme good versus evil or sane versus psychopath.
I (and many others) argue that the ONLY way to arrive at energy sanity is to remove all subsidies and allow the true costs to be seen.
It is obvious that the current set of subsidy schemes is purposely designed to obfuscate the true costs in order to baffle the general public, who are probably more interested in the latest football stats. More is the pity.
Of course, eliminating the subsidy schemes would kill all the greedy Leftists who invested in "renewables" looking for a slice of all that public money. You can tell what a politician really believes by his/her support for subsidies. You can't be a conservative and vote for subsidies (any subsidies) at the same time.
Perhaps people will pay attention when their favorite football match is cancelled due to blackout.
Thing is the subsidy schemes actually expose the true costs but MSM and politicians don't want to real data but to continue to be hoodwinked into believing that when the price goes negative for the odd half hour because of excess generation that is somehow the true cost of electricity.
Where in the CfD contract does it say that onshore wind gets £73 + £44? I thought the strike price topped up to, in this case £73. Where does the £44 come from?
A CfD generator has to sell its output like any other generator connected to the grid in a commercial transaction. The price its receives is unknown due to commercial sensitivity although majority sell their output at fixed price PPAs over a period of time. They then tell the LCCC how much they have generated each half hour and receive their CfD payment based on their (adjusted for inflation) administrative strike price / MWh less whatever the IMRP (intermediate market reference price) is for that half hour. The IMRP is derived from day ahead data received from EPEX Spot and NordPool markets which reflect c60-70% of daily electricity consumption. Thus the actual payment made is referred to as a top up.
Wind farms on CFDs all have a fixed price PPA - it's the CFD!
Because they are unable to forecast how much they will generate per half hour with any accuracy until quite close to actual delivery they only have framework contracts for sale where the buyer agrees to take some fraction of the output whatever it happens to be. Since CFD compensation is set against the Day Ahead prices, the contract is priced against Day Ahead prices (which are actually just hourly), so the compensation exactly matches and the facility gets its strike price as total revenue.
A retailer will buy hedges in the market as required to match the OFGEM cap weeks and months ahead. These come from nuclear (including import from France) and biomass for baseload volumes and used to include coal via BritNed, topped up with forward sales by CCGT generators who also offer peakload contracts (7a.m.-7p.m. Monday-Friday).
These hedges fix their costs, aside from the costs of "shaping" the 24x7 or 12x5 blocks into supply that more closely fit their demand profiles half hourly. When there is no wind the hedge contracts form the bulk of actual supply, with trimming of operations to fit the demand pattern better. Interconnectors and batteries and hydro also trade at this point.
When it is windier or sunny then renewables offer at low prices to ensure their output is sold. That is effectively bought by CCGT generators and used to supply the hedge sales they made previously, while they sell off the gas they had bought to lock in a margin. How low the price is is largely set by competition between renewables generators, and therefore tends to be lower the greater their share of generation. Since CCGT will only buy so long as they make a bigger profit by doing so and selling the gas they no longer need, while the gas supplier aims to make a profit by keeping the gas for resale, we can say that in fact renewables are driving gas prices - not the other way around.
Renewables on CFDs do not care at what price their output is swapped for reduced CCGT output, since they will get fully compensated up to their strike price (at least until prices go negative when more complicated rules apply depending on the CFD round terms).
Since ROCs are so generous, renewables on ROC subsidies are also keen to ensure they garner them by producing. That means they will tolerate negative prices so long as their net revenue remains positive. This lies behind some of the more extreme negative prices we see. It also sets the cost of curtailment: they expect to be paid for the loss of net revenue if they are to curtail. Otherwise, there is very similar logic with CFD generators: they dare not risk a binding sale nomination per half hour until the Day Ahead market, and the volume is swapped with (mainly) CCGT at the same prices.
Fixed price PPAs are relatively rare, and in fact are usually complicated structures based on underlying dispatchable hedges with additional options costs. That can make them costly, since the cost of options is a function of volatility of market prices and the term over which they apply.
To my surprise I have found quite a few offshore wind farms with Fixed Price PPAs, despite having generous CfDs. For instance, Walney Extension, Hornsea 1 and Burbo Bank Extension. They're disclosed in the notes to the accounts.
What I haven't worked out yet is why. I guess it reduces their reported profits and perhaps helps power traders to manage their own risk or transfer profits to a different part of the group.
You have to trace back up the holding structures. Eventually you reach something where the CFD is accounted. You may find that the real financing is held somewhere else too. Looking at e.g. Burbo Bank Extension it has a fixed (but indexed) price with its JV shareholder holding companies, which is low. Go to Burbo Extension Ltd and it has a higher indexed price and depreciates its assets on a sum of digits basis (commonly used in the US). Go up to the next tier to a JV partner e.g. Greencoat Burbo Extension Holding (UK) Ltd and we find a CFD beneficiary. The revenue reported here is more or less in line with the CFD strike price.
Greencoat UK Wind Investment trust publishes a schedule of all its windmills and what merchant power arrangements they have. A number are on fixed prices although majority are on a discount to a power price index which index isn't quoted or how its calculated but they are all with known supplier counterparties who have signed up for years ahead.
You shine a spotlight on the biggest ruse is the ability of renewables to effectively dump in the day ahead market at low or negative prices as they are desperate to generate so they can secure their subsidies. This stupid design of the system really needs pushing to get MSM and politicians to wake up and see this isn't the true cost although anyone with any brain knows there no such thing as a free lunch.
All forms of generation have a whole life cost and thats reflected in what they need to charge to be financially viable. This is why the various subsidy schemes were introduced because when you compare the whole life cost of renewables they were far more expensive than gas otherwise they wouldn't have been built. The lie though is were told that this was short term to oil the wheels of the market and get it going and those subsidies would disappear - they haven't. Now we have a market model where any form of generation is looking for guarantees hence the capacity market being introduced to provide that prop which by the way will be adding 4B/pa to bills from the 27/28 delivery year.
You appear to have conflated two different concepts. The most elegant and compelling arguments are often the simplest to understand yet the hardest to present. Just because there is detail does not mean it cannot be presented in simple terms.
So, a detailed argument that is accessible to everyone would be ideal, please?
Again, Figure 1 doesn't even take into consideration the additional ongoing capital costs of maintaining a duplicative backup (gas or nuclear) infrastructure for when the wind doesn't blow, the sun doesn't shine, the rainbows and unicorns don't appear.
The Capacity Market pays for under used generators to stay in business and keep their plant maintained in case it's needed, along withbstandby staffing. Prices paid have been escalating in recent years, and are now actually high enough to fund a newbuild CCGT plant financing and depreciation costs - at least if it were allowed a full 30-40 year life. But no-one will build one given policy is to shut them down or force what's left to add "carbon" capture by 2035.
That was my point. I was referring to CAPITAL costs, in other words the cost of building NEW backups over time. Present grid balancing and backup costs only consider existing plant not new replacement costs. And as you rightly say, who would build a new plant at enormous cost UNLESS the subsidies were even higher to guarantee an adequate ROI. That was precisely my contention that the CAPITAL costs (of new backup plant) were NOT fully factored in.
My point was that if they were on a normal plant life the CM would pay for new build generation already. But it's because they are threatened with being shut in a decade that those economics don't apply. Even refurbishment/taking out of mothballs is risky: see Calon.
I'd add that ageing plant will need to be replaced quite soon. Probably most of the CCGT fleet by 2035 when even Pembroke would be 23 years old: if they want to add CCS to that the cost will be massively higher. I doubt they really have much idea what the end result would be, as we have no functional CCS units anywhere in the world other than small projects in Canada where the CO2 is used for enhanced oil recovery.
CCGT on its own is really not all that high in cost if it is allowed a proper economic life. It's well under £1bn/GW with a possible utilisation as high as 85% in baseload. Keadby 2 was much less than that, built at an existing site: £350m for 840MW with up to 64% efficiency as baseload.
It's another onion skin of battery revenue, rather than paying for them entirely. It comes at a cost of not being able to enter fully the most lucrative markets when supply is tight separately, but provides a steady monthly income. Batteries are not rated all that highly for the capacity market, although they were given a substantial boost last time out. Modoenergy explains the change in regime here:
That's a combination of the grid balancing and backup costs which will likely rise substantially as the penetration of intermittent wind and solar increases.
Lying is second nature to the government and its thousands of unelected Quangos.
They are corrupt to the very core - folllow the money and you will find out why.
The Substack article titled “Renewables are more expensive than gas” presents a viewpoint that is contradicted by extensive data from leading energy agencies and recent studies. In reality, renewable energy sources like wind and solar have become not only cost-competitive but often cheaper than fossil fuels, including natural gas, especially when considering long-term trends and system-wide costs.
⸻
✅ Fact Check: Renewables Are Now Cheaper Than Gas
📉 Global Cost Trends
According to the International Renewable Energy Agency (IRENA), in 2023, the global weighted average levelized cost of electricity (LCOE) for newly commissioned utility-scale solar photovoltaic (PV) projects was 56% lower than that of fossil fuel-fired alternatives. Similarly, onshore wind projects had an LCOE 67% lower than fossil fuel-fired alternatives. These figures highlight a significant cost advantage for renewables over traditional fossil fuels. 
🇨🇦 Canadian Context: Renewables Outcompete Gas
In Canada, studies have shown that wind and solar energy are already more cost-effective than natural gas in provinces like Alberta and Ontario. For instance, in Alberta, solar power costs around $0.06 per kilowatt-hour (kWh), and wind power costs about $0.05/kWh, both competitive with or cheaper than natural gas. Projections indicate that by 2035, wind power could be 40% cheaper than gas-fired power in both provinces. 
🔋 Renewables Plus Storage: A Competitive Edge
Advancements in energy storage technologies have further enhanced the competitiveness of renewables. In Alberta and Ontario, combinations of renewables with storage solutions are already cost-competitive with natural gas. For example, wind paired with storage is currently cheaper than gas-fired peaker plants in both provinces. Even solar combined with storage is projected to become more economical than gas by the early 2030s. 
⸻
⚠️ Addressing Misconceptions
• System Costs: While the article suggests that integrating renewables incurs higher system costs, it’s important to note that the declining costs of storage and grid management technologies are mitigating these expenses.
• Gas Price Volatility: Natural gas prices are subject to market fluctuations, geopolitical tensions, and supply constraints, leading to potential cost spikes. In contrast, renewables offer more stable and predictable pricing.
• Global Trends: Countries worldwide are increasingly investing in renewables, recognizing their economic and environmental benefits. For instance, China’s significant investments in renewable infrastructure have positioned it as a global leader in clean energy technologies.  
⸻
📚 Conclusion
The assertion that renewables are more expensive than gas does not align with current data and trends. Renewable energy sources have become more cost-effective, offer price stability, and contribute to energy security. As technology advances and economies of scale are realized, the cost advantages of renewables are expected to grow even further.
For a more in-depth analysis, you can refer to the full IRENA report: Renewable Power Generation Costs in 2023.
On this Substack we do data not models.
LCOE is a flawed measure, highly sensitive to capex and cost of capital. Global averages are pointless, particularly for solar because the output is highly latitude dependent. They might achieve 25% LF in Texas, but in the UK only 10%. Moreover, they don't take account of balancing and backup costs.
By all mean challenge what I write, but make sure you come armed with better "facts" than IRENA models or cut and paste of some AI LLM.
The article above is using data from the LCCC, Ofgem, DESNZ and NESO. There are links for you to follow and download the data yourself.
You’ve asked for real data, not models, and cited LCCC, Ofgem, DESNZ, and NESO. That’s fair—and I’ve gone straight to those sources. But respectfully, their data doesn’t support the claim that renewables are more expensive than gas.
1. CfD Strike Prices Undercut Gas
From the LCCC’s own data, the most recent UK Contracts for Difference auctions show wind and solar consistently clearing far below the cost of new gas:
AR4 (2022):
Onshore wind: £42.47/MWh
Solar PV: £45.99/MWh
Offshore wind: £37.35/MWh (LCCC source)
By comparison, DESNZ puts the levelised cost of electricity (LCOE) from gas-fired generation—including fuel—at £85–95/MWh and rising, especially with gas price volatility:
📄 DESNZ Electricity Generation Costs (2023)
2. Ofgem: Renewables Lower Wholesale Prices
Ofgem has explicitly acknowledged that renewables lower wholesale prices via the merit order effect, displacing more expensive marginal gas generators:
📄 Ofgem: Renewables and the Merit Order Effect
3. Balancing and System Costs Are Accounted For
The claim that renewables don’t account for balancing and backup costs is incorrect. DESNZ’s modelling does include these costs. Even after accounting for intermittency and system balancing, wind and solar still come out cheaper than new-build gas.
📄 DESNZ Generation Costs 2023 – Methodology section
The National Grid ESO’s own Future Energy Scenarios also make clear that renewables are the lowest-cost route to decarbonization, with system costs included:
📄 FES 2023 – National Grid ESO
4. Solar Load Factors Are Accounted For
Yes, solar in the UK has a lower capacity factor (~11%) than Texas, but that’s already reflected in project economics. CfD auction prices, O&M costs, and local irradiance are all factored into the market bids. Solar is expanding in the UK precisely because it’s profitable despite the lower LF.
In short: If we go by UK data rather than global averages or models—as you requested—wind and solar remain the cheapest new sources of electricity on a per-MWh basis. The data from the agencies you reference confirms this.
You're using 2012 prices, not 2025.
Active CfD offshore wind costs ~£158/MWh, onshore £117 and solar about £77/MWh in today's money. New farms won't bring down the average much, if at all, as indexing take place every year.
AR4 contracts have been cancelled and part of others re-bid.
DESNZ Gen Cost 2023 puts the LCOE of CCGT gas-fired electricity for 2025 delivery at £114/MWh, but £60 of that is carbon cost, meaning the cost of gas is £54/MWh.
Yes, when there's a lot of renewables on the grid wholesale prices will fall. That only increases the subsidy component of CfDs and doesn't affect FiTs. ROCs will receive slightly lower total payment.
DESNZ LCOE figures in the Gen Cost report do not include balancing or backup, nor decommissioning.
Load factors are not the same as balancing and backup. They use very optimistic load factors for wind, far in excess of what is achieved in practice.
Appreciate the detailed reply. A few clarifications are in order.
1. CfD “Active Costs” Are Not Market Prices for New Renewables
The £158/MWh figure for offshore wind you cite is the current payment under older, legacy CfD contracts struck at a time when costs were much higher. It’s not the cost of new wind.
• The actual cost of new offshore wind, per AR4, was ~£37.35/MWh in 2012 prices (~£48/MWh real-terms).
• Yes, some AR4 contracts were withdrawn or delayed due to inflation, but this doesn’t mean the new-build cost is £158/MWh—it means early CfDs are still indexed for inflation. That’s how the scheme was designed.
• DESNZ and the LCCC continue to show falling costs for new projects across multiple rounds.
If you’re arguing we should assess the cost of the technology, then looking at CfD bids from recent auctions—adjusted to real terms—is the appropriate measure.
2. Gas at £54/MWh? That’s Misleading Without Carbon Pricing
Yes, DESNZ shows £114/MWh for CCGT in 2025, including carbon pricing. But carbon pricing is a real, inescapable cost—not some imaginary add-on. You can’t ignore it unless you’re proposing that polluters should no longer pay for emissions.
Even stripping it out, you get £54/MWh—but:
• That still doesn’t include capital costs or balancing risks from volatile gas markets.
• It also ignores geopolitical risk, which is non-trivial post-Ukraine.
And crucially, that’s still more than new onshore wind and solar in AR4.
3. System Costs and Balancing are Not Ignored by DESNZ
You’re right that headline LCOE figures don’t include system costs. But DESNZ does separately estimate these in its modelling, and so does the National Grid ESO:
See Annex E, DESNZ Gen Cost 2023 – System Integration Costs
• Integration costs for wind/solar remain small relative to the fuel cost volatility of gas.
• The system is designed to manage intermittency through storage, interconnection, and demand response—all improving yearly.
4. Load Factors Are Conservative, Not Overstated
• DESNZ uses a wind LF of 50.7% for offshore and ~36% for onshore in 2025–2030 ranges—both based on actual performance from operational UK assets.
• BEIS and ESO data show the UK already averages around 45–50% offshore LF in newer projects.
Claims of “very optimistic” LFs just don’t line up with observed capacity factors from Hornsea 2 or Triton Knoll, for example.
5. Wholesale Price Suppression Isn’t a Flaw—It’s a Feature
Yes, renewables depress wholesale prices. That’s how they save consumers money. The notion that this somehow increases subsidies misreads how CfDs work:
• CfDs are hedges—they protect against high prices as much as they “top up” during low ones.
• When market prices are high (as in 2022), generators pay money back to consumers—and they did. Offshore wind returned hundreds of millions to the Treasury.
LCCC Reports Record Payments Returned from Renewables (2022)
Summary
You’ve cited the right datasets but drawn the wrong conclusions:
• Legacy CfDs ≠ current build cost.
• Gas ≠ £54/MWh in any realistic policy environment.
• Balancing costs are known, manageable, and already improving.
• UK wind load factors are based on hard data, not wishful thinking.
I didn't say £158 represents current build costs. But strike prices have risen since AR4. The £85 (2025 prices) offered to Hornsea 4 was not enough, so they canned it. £10 more than current market price, driven by gas with a carbon tax.
Balancing costs are rising as are backup costs. OBR forecasts backup going up from £1bn in 23/24 to £4bn in a few years.
Capex for gas fired generation is included. About £7 from memory.
Load factors for wind in Gen Cost report are far higher than has ever been achieved by our wind fleet in any given year. And they assume that for the life of the asset. LFs tend to fall after about 10-12 years operation.
You’re raising valid concerns, but they don’t change the bottom line: new renewables are still cheaper than new gas—even when accounting for balancing and backup.
Strike Prices
Hornsea 4 didn’t proceed at £85/MWh, true—but that’s still £29/MWh cheaper than new gas with carbon (£114/MWh). You can’t just strip out carbon and call gas £54/MWh—carbon pricing is a real market cost, and UK policy is Net Zero-aligned.
Backup & Balancing
Yes, OBR forecasts backup costs rising to £4bn/year—but that’s under 10% of total UK electricity spend. These costs are falling with more storage, interconnectors, and demand flexibility.
CAPEX and LCOE
Gas capex (~£7/MWh) is included in DESNZ’s LCOE—just like in wind and solar CfDs. Let’s be consistent: either include full system costs for all techs or none. You can’t pin system costs only on renewables.
Load Factors
DESNZ uses LF from new projects like Hornsea 2 and Seagreen—50%+ is already being achieved. Lifetime degradation is included in sensitivity analysis. We don’t discount gas LFs for aging plants either.
Summary
• New renewables are still cheaper than gas on a full-cost basis.
• Backup costs are rising—but still manageable.
• Real-world data from DESNZ, LCCC, and ESO supports this.
There is a marked contrast between academic studies (Lazard, DESNZ, CP2030 assumptions etc, etc) that say LCOE for grounded offshore wind is less than GBP 50 / MWh, and the commercial reality of what companies like Orsted will accept. The recent AR6 auction was at GBP 85 /MWh and then Orsted backed out of the 2.4 GW Hornsea 4 project for commercial reasons. If there is no commercial case at GBP 85 / MWh what is the real commercial rate required to build offshore wind.
Why do we continue to have to offer subsidies to seduce renewables to be built then?
Probably for the same reason we have subsidized fossil fuels for decades?
Au contraire, as has been covered before, the Exchequer collects about £50bn/yr in hydrocarbon taxes. That's the opposite of a subsidy.
https://open.substack.com/pub/davidturver/p/busting-the-fossil-fuel-subsidy-myth?r=nhgn1&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Appreciate the new post. But this is a definitional sleight of hand—no serious agency defines fossil fuel subsidies solely as “net tax transfers.” The IMF, IEA, OECD, and UK Treasury all define subsidies more broadly to include underpriced externalities, tax breaks, and consumption support.
1. Governments can collect fuel taxes and still subsidize fossil fuels
It’s not either/or. The IEA, IMF, and OECD have been crystal clear: if fossil fuels are sold below their full economic cost—including pollution, health, and climate damage—they’re being subsidized.
IMF (2023): “UK fossil fuel subsidies totalled $46 billion in 2022,” most of it from unpriced carbon and VAT exemptions.
https://www.imf.org/en/Topics/climate-change/energy-subsidies
https://www.imf.org/-/media/Files/Publications/WP/2023/English/wpiea2023141-print-pdf.ashx (Table A1)
2. UK Treasury identifies tax breaks and support schemes as subsidies
Even without carbon pricing, the UK Treasury lists:
• Reduced VAT on domestic gas/oil (5% instead of 20%)
• Tax relief for North Sea oil and gas producers
• Fuel duty freezes (costing ~£6bn/year)
Those are explicit subsidies by UK accounting standards.
UK Green Budget 2022 – Fuel Duty Costing
UK Parliament Briefing on Fossil Fuel Subsidies
3. Collecting hydrocarbon taxes ≠ No subsidy
Cigarettes are taxed too—does that mean we “subsidize” tobacco harm by not taxing it more? Of course not. Subsidy = deviation from efficient market pricing, and fossil fuels are massively underpriced when pollution and climate costs are excluded.
Bottom line: The Exchequer collecting fuel duty doesn’t negate the existence of fossil fuel subsidies. It just means we tax some of the harm—far less than its true cost.
If we’re serious about fair comparisons between energy sources, we need to count all externalities and policy support—on both sides.
So basically, the IMF (and for that matter the Guardian) thinks that if you don't tax something as much as they think you should, then that's a subsidy. It's absurd.
The Government said in 2021 that the UK doe snot subsidise fossil fuels.
https://lordslibrary.parliament.uk/oil-and-gas-industry-outside-interests/#:~:text=The-,UK%20does%20not%20give%20any%20subsidies%20to%20fossil%20fuels,-%2C%20and%20follows%20the
Read the article I linked to above. I covered all of that, and more there.
You’re quoting the 2021 UK government position, which defines subsidies narrowly—essentially as direct cash payments or “production support.” But that’s not how the IMF, OECD, IEA, or even the UK Parliament Research Library define it.
1. “Subsidy” ≠ Just a Handout
You’re mocking the idea that under-taxation counts as a subsidy—but that’s exactly how global public finance works. A subsidy is any policy that lowers the cost of fossil fuel production or consumption below its full social cost—whether through:
• Tax breaks
• Below-market VAT
• Unpriced externalities (climate, air pollution, etc.)
As the OECD puts it:
“A subsidy exists when a government action lowers the cost of production, raises the price received by producers, or lowers the price paid by consumers.”
OECD Fossil Fuel Support Database
IMF Working Paper: Still Not Getting Energy Prices Right (2023)
2. UK Treasury & Parliament Have Acknowledged Fossil Fuel Support
Even the UK Parliament briefing paper (2023) you dismissed states:
“The UK has committed to phasing out fossil fuel subsidies under the G7 and G20, but there is no agreed definition of ‘subsidy.’ Depending on the definition used, the UK either has or does not have fossil fuel subsidies.”
Parliament Research Briefing – Fossil Fuel Subsidies
So yes: the Government says “we don’t subsidise”—by using a definition that excludes tax breaks, VAT reductions, and the costs of environmental harm.
3. This is about full economic cost—not political framing
It’s not about what the Guardian or IMF wants to tax. It’s about whether fossil fuels are priced to reflect their true cost to society. Right now, they’re not—hence the global push to end implicit subsidies.
It’s not absurd. It’s public economics.
I don't love fossil fuels, yet this "subsidies" gave us something of true value, secured the modern way of life(which is not a bad way of life in general- minus SUVs, urban sprawl and few other negatives). All depends how much we get for subsidizing certain industries. France got quite good value in term of cheap power, good jobs, lessened dependency on volatile countries supplying fossil fuels- and 40years of ultra low emissions already from electricity production. Germans get really poor value for subsidizing wind and solar in terms of electricity (8times more CO2 intense than France) and much more expensive at that, responsibility for feeding putins war empire with dirty gas money (France didn't have to do it). Just to give few real world examples.
Subsidies should be judged not just by short-term electricity prices but by long-term climate impact, economic resilience, and technological progress. Fossil fuel and nuclear subsidies helped in their time but came with massive costs. Renewable subsidies are giving us cheaper power, less pollution, and energy security in a warming and unstable world. That’s real value.
Hi Clifton, Please try reading with understanding. Political decision of France(and Finland, Ontario, Sweden somewhat similarly) and investment made about 50 years ago did have lasting positive impact on power prices, reliability, much less pollution, enormous greenhouse gas reduction. I don't see enormous "costs", even if not everything is perfect about Frances energy system (they forgot promoting benefits to people, building fast), it is far superior than in most places.
No need for large scale batteries (that don't exist)
No need for "backup bridge fuel" gas from Russia(or other places, which will be needed practically forever)
No need to rely on cheap solar PV from abroad (similar risks like sending money to putin)
Less whining, more doing and looking at real world examples not promises, and models.
I am a fan, and enjoy details, but can you bear to produce a simplified version giving the Subsidies as a total for wind and solar? Currently the main points risk being lost by the different subsidies. Of course, that is what the authorities want
Fossil fuels don't receive subsidies in the UK they pay additional taxes over and above corporation tax levels levied on other commercial entities.
When I buy a litre of petrol in UK nearly 50% is tax to the govt how is that a subsidy?
Not only do these charts fail to record the true cost of required backup to combat intermittency and unpredictability but they fail to account for geopolitical risk (being unable to compensate for hostile powers cutting off supply - when we could have our own domestic supplies of gas/oil). But there is more. These figures for gas include a carbon TAX. The figures for renewables include the given selection of SUBSIDIES. Taxes are the opposite of subsidies.
Green jobs are not appearing whilst British industry is being destroyed due to high energy costs.
British pensioners are dying in their thousands every year due to fuel poverty whilst billions in subsidies are being given to intermittent renewables.
Natural gas is imported from the US and Qatar whilst North Sea gas and oil is shut down.
Indeed this is the travesty of the mad cat rush to 2030 which is barely achievable but totally unachievable unless 60-70% of the equipment and services are imported.
I just cant get why the TUC and the unions aren't all over this rather than being impotent and standing by while UK oil & gas produces ditch well paid jobs.
On an ethical basis how does the Labour Government justify cutting the Winter Fuel Allowance saving GBP 1.3bn, whilst maintaining renewable subsidies of GBP 12.3 through environmental charges on electricity bills, whilst 3,000 to 5,000 people die each year from fuel poverty, unable to heat their homes properly. This is the fraction of Excess Winter Deaths (10% of 30,000 to 50,000) attributable to fuel povert.
Who voted for this? If it was out of ignorance then it needs to be made clear to everybody what they are voting for when they vote for the current NetZero policy.
Given a chance would they change that vote?
The UK produces 0.8% if global CO2 emissions. Allowing UK pensioners to die is not going to save the planet.
To understand and support this analysis I made my own estimates of the cost of renewable energy for the UK grid, without breaking out every generation type and incentive scheme. The conclusion is in the same range.
In 2024, renewables generated 50.8% of the UK's electricity 145 TWh out of a 285 TWh total.
The compensation received by renewables consists of the IMRP (Intermittent Market Reference Price) plus top ups from the various schemes (Contract for Difference, Renewable Obligation Credits, Feed-in-Tariffs, Constraint payments).
The 2024 IMRP averages to GBP 75 / MWh.
The subsidy schemes total a net GBP 12.29 bn contribution to renewable generators on top of the market price for a total 145 TWh: GBP 85 / MWh.
So, my gross estimate of total compensation for renewables is about GBP 160 / MWh.
On top of this, there are balancing costs (GBP 2.5bn) and capacity backup costs (GBP 1bn). If attributed to intermittent renewables of 145 TWh, this is an additional cost of GBP 24 / MWh.
For a total cost for intermittent renewables of GBP 184 / MWh.
That's before the grid build-out costs of GBP 10bn / year.
Nuclear power is estimated to costs £80–£120/MWh for nth of a kind pressurized-water reactors (EPRs), Hinkley C comes to £130/MWh as a first of a kind project.
Lessons learned from South Korea could further reduce these costs.
South Korean APR1400s that have actually been built at a calculated cost of £46–£65/MWh over 60 years at a 90% capacity factor. (Lessons to be learned, but UK costs are still likely to be higher due to labour costs and regulation). This estimate includes costs of decommissioning over 60 years.
Disposal of high level nuclear waste, following the Finnish example of burying high level waste in 500m boreholes into granite and using multiple barrier technology at the Onkalo site, comes at a cost of $1-2 / MWh for the electricity generated.
Roughly speaking, this simple analysis suggests carbon free baseload nuclear can be delivered for half the cost of intermittent renewables requiring gas turbines for backup and balancing, and grid build-out to get it where it is needed. Batteries for diurnal balancing might address the need for dispatchability.
With 0.8% of global emissions, the UK doesn't need to race to NetZero but should pursue a steady reintroduction of nuclear power. Both large (1.3 GW) PWRs at legacy nuclear sites and SMRs at legacy coal sites to leverage existing grid Rights of Way (they may need HV upgrades).
A policy of high energy costs and energy rationing has its own ethical questions.
I can find a wide range of figures (30 - 50,000) for excess winter deaths but, putting aside COVID and flu, figures of around 10,000 deaths annually in the UK are linked to cold homes, with 10% of excess winter deaths (roughly 3 - 5,000) directly tied to fuel poverty.
IMHO, Ed Milliband's NetZero policy needs to be challenged on both cost and ethical grounds.
At the very least, this is the basis for an informed debate on how and how quickly the UK gets to NetZero.
You've a good back of an envelope there that gets you in the ballpark straight away.
Very nice summary. The key is that nearly every MWh of renewable energy comes with generous subsidy costs attached and the whole system costs of integrating them are even higher. That means that electricity actually costs more on data with high renewables output, although the billing is disguised by the subsidy mechanisms.
Some additional info:
FiTs have been indexed by RPI of 5.2% and 3.5% over the past couple of years, which if we assume similar average composition of generation would push them to £240/MWh today for 2025-26.
You quote the ROC cashout price, but generators actually get paid the economic value of certificates, which is higher. The calculation actually builds in an expected shortfall of 10% in real ROC supply, but low output aggravates the shortage, pushing up recycle values and ROC prices. The shortfall means more cashouts must be paid, and these are recycled to the actual ROC buyers which in turn means they will pay a premium to cashout value to generators. To the extent that they do not pay full value to generators (or even overpay through wrong forecasts), this affects the balance between generators and retailers. However, the scheme cost to billpayers is set by the full recycle value. My current estimate for 2025-26 is £75/MWh, corresponding to a 12% uplift.
You didn't include REGOs which add another 10-15/MWh to all renewables except small scale FiTs where the costs of claiming are high relative to the benefit.
The sums around biomass are complicated. The CFDs are priced against Baseload Market Reference Price which is set for the summer (Apr-Sep) and winter periods. The result is that Drax and Lynemouth treat the difference with their strike price as a fixed subsidy (or tax as its was during the energy crisis), and operate on day to day pricing alongside their ROC subsidies valued against fuel cost. Drax has a cap on its ROC subsidy volume, so once this is reached the economics depend on pure costs against market prices. They do hedge a significant share of output via forward sales. However, when e.g. solar pushes middle of the day prices too low, they will cut output and buy in solar or wind against their forward sales either explicitly or implicitly. The reduced output in low price hours increases their average sales price.
You noted that solar is getting less average proceeds than the average cost of gas fired generation - thus actually disproving the thesis that gas sets prices almost all the time. However, it doesn't really reflect what consumers end up paying, since a chunk of solar output is effectively used to charge batteries which then resupply (less round trip losses) into the early evening market at a premium that helps pay for their cost. Batteries also charge up overnight when prices are lower, particularly when wind output is higher. Other chunks of cost come from payments for ancillary services they provide, though those are perhaps more in the realm of balancing costs. Nevertheless we could add say £80k/MW of battery capacity as typical income over a year for now around 4GW, so another £320m of costs.
Allocating costs of balancing and the Capacity Market gets trickier when you delve into it. Most curtailment payments historically were to onshore wind until unsubsidised output from Moray East and Seagreen entered the picture. Almost no other offshore wind gets curtailment payments to any significant degree so far. Offshore wind does curtail voluntarily when market prices are negative and their CFD doesn't pay any compensation.
Thanks. Yes I should have added REGOs too.
I thought it simpler to just apportion the balancing and backup costs across the whole intermittent generation, although I did think it might get more complicated, but I don't know of any data to give a definitive share.
With batteries if they can charge up during times of low demand and thus price and sell at higher price into the peaks presumably as their volume increases it will act as a dampener on the peak load price as there will be less need to use higher cost gas units? Albeit I get they will still benefit from the capacity mkt to ensure they stay available.
Curtailment costs are particularly high currently as there are significant grid upgrade works across the SHET/SP boundary as well as down into the Central Belt and on into England. Moray West sits behind the B0 boundary & Seagreen sit behind the B4 boundary both are running at 50-60% of capacity. In the case of B4 thats a reduction of 1.6GW. These outages are planned to continue for years and largely represent current works to connect further onshore wind onto the grid so as the awfully titled "Great British Grid Upgrade" gets under way we will see further long term outages constraining grid capacity. Irrespective of your views on the need for CP2030 the rush to achieve it is going to lead to even more curtailment although weak wind output currently is masking that. Couple that with stretched global supply chains and the folly of CP2030 becomes even more evident. Thus a recalibration to 2035 and beyond makes economic sense as well as being a starting point of driving a wedge into at least stalling anymore renewables.
So we’re being lied to. Hmm, why aren’t I surprised.
The question is do they even know they are lying any longer?
So many of the contributions referenced the same study from 2021 that is out of date and isn't measuring what it is claimed it is measuring: effectively it says that the cost of generation from gas is largely correlated with the gas price. Moreover, the idea that all generators are paid the same market clearing price is completely wrong. That system went out when we ditched the Pool almost 25 years ago.
Thank you David. From the Energy Bad Boys' latest substack article, calling for a rapid end to subsidies for intermittent energy sources: "Without your money, wind and solar would be living in a van down by the river".
None of this accounts for the cost when a foreign country 'accidentally' severs several of our largest offshore wind farms simultaneously by dragging a huge anchor across the sea bed. The impact on a grid that has nearly no gas and few nuclear powerstations would cost upwards of £200bn to the economy because we would be forced into rolling blackouts for weeks, energy prices will spike, and the connections will need remaking and burying in concrete. Non trivial. Then, more generally, are the life span costs of wind and solar. They simply don't have the same life span vs. Gas, and nuclear. If you look at total costs over, say, two full SMR life cycles its immediately clear that wind and solar are a stupid idea. They will need a minimum of 6 replacement cycles for the same period. I don't want to rant but the only possible reason these other proposals are so mind numbingly stupid is money. Money they will receive. It's pure and simple short term greed and it is already causing us all hardship and suffering.
NESO have the tools to keep the lights on the biggest one being they can spend what it takes to do so
With the greatest of respect no they don't. Labour’s Clean Power 2030 Plan Energy Mix (2030 Projection): Labour’s plan targets 70% renewable generation by 2030: 50 GW offshore wind (175 TWh, 50% of demand), 20 GW onshore wind (70 TWh), 45 GW solar (50 TWh), with the rest from gas (20%, 70 TWh, 15 GW), nuclear (8%, 28 TWh, 5 GW), and imports (2%, 7 TWh). Total demand is ~350 TWh. Vulnerabilities: Losing 40 GW of offshore wind (40% of supply) due to severed interconnects leads to rolling blackouts for weeks, a 5-10% GDP loss (£150-300 billion), and geopolitical tensions. Offshore wind’s reliance on vulnerable submarine cables and lack of redundancy is a major risk. Where exactly are they going to find 40 GW?
Storage and Backup?
10 GW of batteries can supply 40 GWh, covering 1-2 hours of demand—not enough for weeks-long outages. Gas plants are limited by fuel reserves (the UK has 5-10 days of gas storage, per 2024 data).
Demand Response:?
Smart grids can reduce demand by 5-10 GW, but not 30 GW, and public tolerance for sustained cuts is low.
Interconnectors?
Imports are insufficient.
Redundancy?
The grid lacks redundancy for 40 GW of offshore wind. Future designs might split interconnects into smaller, distributed links, but this isn’t in place by 2030.
So if, say, Russia had two or three ships drag anchors, and/or blow up a gas pipeline NESO are not going to pull enough energy out of anywhere to save us.
Firstly I don't agree with CP2030 or its predecessors but short of an Iberian grid collapse I'm not sure the general populous will wake up to what is happening. This is unlikely as our grid is run to one of the highest standards in the world in securing it against multiple outage scenarios. It also recognised a long time ago that it needed new tools to manage a more renewable centric grid hence we now have a whole host of ancillary services largely provided by batteries. But to me the key reason why we can keep the lights on is we are keeping 35GW of unabated gas which even Milibrain accepts. Of course it will cost more but he's not bothered by that minor detail hes only interested in getting his plumb job at the IPCC.
Ah, I see, so the assumption is that with gas running at 100% capacity we would have just about enough power to avoid large scale rolling blackouts. Of course, removing all that wind would ironically help with grid balancing! We would still need to find about 5GW and also hope the 'accident' didn't happen in the winter. We need more gas using north sea reserves as a stop gap, get Hinkley deployed and another on the way and increase the % nuclear makes up in their plan by getting some SMRs deployed. Two SMRs would power wales heating and avoid installing 500k heat pumps twice (two full life cycles) via electrification.
For sure a couple more Hinkleys would be most useful although I would go for the Korean design as proven far quicker and cheaper to build.
Interconnectors are also vulnerable to submarine/trawler attack. Already demonstrated at IFA1 which was half out of action for about 6 months; possibly a reason for some of the problems with Western Link HVDC (but nobody is saying), and the Baltic interconnector between Finland and Estonia.
That's my point. I would be going: gas (bridging fuel) + big nuclear + smr on old coal sites + insulation program. Sure it takes longer but we are already tiny fish in a big pond. If China, India or USA made progress it would have a huge effect compared to our dumb arse 'race' to obscurity and economic disaster.
I would go easy on the insulation unless it has a rapid (<7 year) payback. Recent studies show the government programme won't pay back for over 100 years. That means never by the time you add financing costs and building lifetimes.
Payback is that relevant really it should be about how effective it is and the sad reality is much of British housing stock doesn't lend itself to being able to well insulated. Mind you as its warming up thats less less of an issue!!
Not to mention the supposed ‘kill' switches in Chinese made solar panels & inverters.
It is shocking that the establishment lies so blatantly about their so-called renewables when they are such unsustainable, inappropriate technologies and should never have been embarked upon in the first place, as the late chief scientist Sir David Mackay warned many years also. It is difficult to avoid concluding that the establishment is deliberately setting out to wreck our energy infrastructure.
They ignore the near certainty of rolling blackouts when the grid has been decarbonised (supposedly) and we have no wind and no sun for days or even weeks on end and the backup interconnector supplies from similarly-stricken Europe dry up. They ignore the near certainty of Iberia-type blackouts when Miliband has deployed a massive over-supply of fickle and uncontrollable non-synchronous wind and solar. Then there is the scandal of unsustainable biomass which creates more CO2 emissions than the coal it replaced. The combination of nuclear and weather dependent renewables doesn’t work very well either, as France is beginning to find out: https://principia-scientific.com/expanding-frances-power-grid-with-more-wind-and-solar-poses-serious-risk/.
The establishment ignores the fact that there is no empirical proof that CO2 emissions cause dangerous global warming when trustworthy science says the effect is logarithmically minimal. They also ignore the fact that the majority rest of the world is never going to give up using fossil fuels which renders our unilateral Net Zero strivings utterly pointless. They ignore they fact that reaching their Net Zero nirvana would lead to societal collapse when all their wind and solar plants fall to bits at the end of their short service lives, unable to be replaced because by that time we will have no fossil fuel-powered heavy manufacturing and transportation facilities.
We urgently need to vote the Uniparty proponents of the climate change hoax out of office and unwind the destruction they have wrought on our energy systems before we reach a tipping point of no return.
I’m starting to suffer from an overload of renewables/Net Zero debunking! In addition to all the good work of our host, here are two other experts on the same subject. They may have collaborated as they have both come up with the figure of £220 billion wasted to date on renewables.
First, a 54-minute interview of energy analyst Kathryn Porter entitled “We spent £220 billion on renewables …” covering Blackouts, Energy from abroad, Why blackouts are dangerous, Britain's energy setup, Clean Power 2030, Why are our bills so high? The future of Net Zero, What's the energy solution? China's role in the green revolution: https://www.youtube.com/watch?v=MPydWl5Djxs.
Second, a 37-minute interview of Dr John Constable of the Renewable Energy Foundation entitled “The £220 billion lie” by a not very well-informed GB News reporter (maybe feigning devil’s advocate to placate Ofgem): https://www.youtube.com/watch?v=LP4CViALhV4
both good interviews but playing to a receptive audience. What we need is Panorama / Dispatches type episode to get at a wider audience that really needs to be influenced to get change going
Thanks, but Panorama (BBC) and Dispatches (Channel 4) are both completely bought-and-paid-for establishment propagandists. I’m afraid that the day either of these channels does an honest report on renewables/climate change will be the day that lots of flying pigs are seen!
I wonder who watches Panorama these days. It used to produce bombshell reports that were widely discussed in the press and Parliament. It's a long time since I've heard of anything from them.
The problem is though you need communication channels that access the wider community that needs to be influenced if we are to change the direction travel we need consumers to be pushing back.
How do you get the MSM to promote facts and opinions which they are paid to oppose? That’s why I keep plugging the line that our only hope is to get rid of the Uniparty, as Trump and the common-sense electorate of the US have effectively achieved in the USA.
Im not sure they lie intentionally but just parrot back the flawed information they have been fed rather than satisfy themselves that it is sound.
This is the circle that needs to be broken and until it is we will be fighting against a wall of group thinkers who by sheer volume alone just overwhelm the opposition. Im also fearful that the few politicians questioning this tend to be on the right and are coming at it from a political point scoring angle and are largely being discredited by the MSM.
In the short term can't see Milibrain shifting his stance or being forced off his perch so he will continue to double down only if to create an illusion that he's delivering CP2030 as this is all about him getting a plumb job in the IPCC.
Over the past 25 years I have written to umpteen different politicians to spell out why their climate change policies will lead to disaster. I’ve never, ever had a coherent, reasoned reply that addressed the specific points I raised. That tells me that they know their policies will lead to disaster but they dare not admit it. How can they possibly be unaware that Net Zero is getting nowhere other than leading to deindustrialisation, impoverishment, rolling blackouts and Iberia-style grid shutdown?
They simply toe the party line which is laid down for them by the behind-the-scene globalists who call the shots. The entire Net Zero spiel originated from the United Nations “Special Report on Global Warming of 1.5 Degrees” published in 2018. The malfeasances of Uniparty politicians during Covid confirmed that that their first loyalty is to the globalists, not to the people who elected them.
Try asking your own MP the questions implicit in my post above, e.g. what is the point of the UK attempting to achieve unilateral Net Zero and see how far you get. A few of the backbencher MPs are probably stupid enough to believe the climate change propaganda but the leaders must fully understand what they are doing. They all need to be swept away.
Your concern that the sceptics are "on the right” is misplaced. That’s how anyone who goes against the establishment narrative gets pejoratively labelled (usually far-right) by the globalists and the bought-and-paid-for MSM. Right versus left is no longer meaningful in politics; the reality now is democrat (emphatically not in the USA party-political meaning) versus globalist, in the extreme good versus evil or sane versus psychopath.
I (and many others) argue that the ONLY way to arrive at energy sanity is to remove all subsidies and allow the true costs to be seen.
It is obvious that the current set of subsidy schemes is purposely designed to obfuscate the true costs in order to baffle the general public, who are probably more interested in the latest football stats. More is the pity.
Of course, eliminating the subsidy schemes would kill all the greedy Leftists who invested in "renewables" looking for a slice of all that public money. You can tell what a politician really believes by his/her support for subsidies. You can't be a conservative and vote for subsidies (any subsidies) at the same time.
Perhaps people will pay attention when their favorite football match is cancelled due to blackout.
MD
Thing is the subsidy schemes actually expose the true costs but MSM and politicians don't want to real data but to continue to be hoodwinked into believing that when the price goes negative for the odd half hour because of excess generation that is somehow the true cost of electricity.
Or when a weeks shop melts in the freezer
Also removing lobbyists liars would be very effective
Locking up the liars for fraud should be an option, or beating with sticks 🤔 😚
Yep, i like my freedom hence why I moderated my post
Where in the CfD contract does it say that onshore wind gets £73 + £44? I thought the strike price topped up to, in this case £73. Where does the £44 come from?
A CfD generator has to sell its output like any other generator connected to the grid in a commercial transaction. The price its receives is unknown due to commercial sensitivity although majority sell their output at fixed price PPAs over a period of time. They then tell the LCCC how much they have generated each half hour and receive their CfD payment based on their (adjusted for inflation) administrative strike price / MWh less whatever the IMRP (intermediate market reference price) is for that half hour. The IMRP is derived from day ahead data received from EPEX Spot and NordPool markets which reflect c60-70% of daily electricity consumption. Thus the actual payment made is referred to as a top up.
Wind farms on CFDs all have a fixed price PPA - it's the CFD!
Because they are unable to forecast how much they will generate per half hour with any accuracy until quite close to actual delivery they only have framework contracts for sale where the buyer agrees to take some fraction of the output whatever it happens to be. Since CFD compensation is set against the Day Ahead prices, the contract is priced against Day Ahead prices (which are actually just hourly), so the compensation exactly matches and the facility gets its strike price as total revenue.
A retailer will buy hedges in the market as required to match the OFGEM cap weeks and months ahead. These come from nuclear (including import from France) and biomass for baseload volumes and used to include coal via BritNed, topped up with forward sales by CCGT generators who also offer peakload contracts (7a.m.-7p.m. Monday-Friday).
These hedges fix their costs, aside from the costs of "shaping" the 24x7 or 12x5 blocks into supply that more closely fit their demand profiles half hourly. When there is no wind the hedge contracts form the bulk of actual supply, with trimming of operations to fit the demand pattern better. Interconnectors and batteries and hydro also trade at this point.
When it is windier or sunny then renewables offer at low prices to ensure their output is sold. That is effectively bought by CCGT generators and used to supply the hedge sales they made previously, while they sell off the gas they had bought to lock in a margin. How low the price is is largely set by competition between renewables generators, and therefore tends to be lower the greater their share of generation. Since CCGT will only buy so long as they make a bigger profit by doing so and selling the gas they no longer need, while the gas supplier aims to make a profit by keeping the gas for resale, we can say that in fact renewables are driving gas prices - not the other way around.
Renewables on CFDs do not care at what price their output is swapped for reduced CCGT output, since they will get fully compensated up to their strike price (at least until prices go negative when more complicated rules apply depending on the CFD round terms).
Since ROCs are so generous, renewables on ROC subsidies are also keen to ensure they garner them by producing. That means they will tolerate negative prices so long as their net revenue remains positive. This lies behind some of the more extreme negative prices we see. It also sets the cost of curtailment: they expect to be paid for the loss of net revenue if they are to curtail. Otherwise, there is very similar logic with CFD generators: they dare not risk a binding sale nomination per half hour until the Day Ahead market, and the volume is swapped with (mainly) CCGT at the same prices.
Fixed price PPAs are relatively rare, and in fact are usually complicated structures based on underlying dispatchable hedges with additional options costs. That can make them costly, since the cost of options is a function of volatility of market prices and the term over which they apply.
To my surprise I have found quite a few offshore wind farms with Fixed Price PPAs, despite having generous CfDs. For instance, Walney Extension, Hornsea 1 and Burbo Bank Extension. They're disclosed in the notes to the accounts.
What I haven't worked out yet is why. I guess it reduces their reported profits and perhaps helps power traders to manage their own risk or transfer profits to a different part of the group.
Do you have any insights?
You have to trace back up the holding structures. Eventually you reach something where the CFD is accounted. You may find that the real financing is held somewhere else too. Looking at e.g. Burbo Bank Extension it has a fixed (but indexed) price with its JV shareholder holding companies, which is low. Go to Burbo Extension Ltd and it has a higher indexed price and depreciates its assets on a sum of digits basis (commonly used in the US). Go up to the next tier to a JV partner e.g. Greencoat Burbo Extension Holding (UK) Ltd and we find a CFD beneficiary. The revenue reported here is more or less in line with the CFD strike price.
Greencoat UK Wind Investment trust publishes a schedule of all its windmills and what merchant power arrangements they have. A number are on fixed prices although majority are on a discount to a power price index which index isn't quoted or how its calculated but they are all with known supplier counterparties who have signed up for years ahead.
As usual a most insightful answer.
You shine a spotlight on the biggest ruse is the ability of renewables to effectively dump in the day ahead market at low or negative prices as they are desperate to generate so they can secure their subsidies. This stupid design of the system really needs pushing to get MSM and politicians to wake up and see this isn't the true cost although anyone with any brain knows there no such thing as a free lunch.
That column is for currently active CfD contracts. The weighted average strike price for those onshore wind contracts is £117/MWh.
They get the £73/MWh Intermittent Market Reference Price (IMRP) plus a £44/MWh subsidy top-up to the strike price.
It's pure coincidence that the current value of the AR6 strike price for onshore wind was also around £73/MWh.
Does that mean, older onshore windfarms strike prices are now, at today's 2025 prices, £117 MWh?
Yes.
IMRP varies by settlement period so presumably this is the average price over the year?
The prices quoted are the average for April 2025, weighted by generation.
You seem to have forgotten to include the whole life costs of gas?
You seem to have forgotten the value of lost load. Try a trip to say Puerto Rico or Venezuela.
All forms of generation have a whole life cost and thats reflected in what they need to charge to be financially viable. This is why the various subsidy schemes were introduced because when you compare the whole life cost of renewables they were far more expensive than gas otherwise they wouldn't have been built. The lie though is were told that this was short term to oil the wheels of the market and get it going and those subsidies would disappear - they haven't. Now we have a market model where any form of generation is looking for guarantees hence the capacity market being introduced to provide that prop which by the way will be adding 4B/pa to bills from the 27/28 delivery year.
Morning Colin, explain like I am five, what is the whole life cost of gas?
Can you include the level of detail that DT provides so that we can assess the strength of your claim and, thus, the credibility of your argument?
You seem to be at cross purposes, do you want an”explain like I am five” answer, or do you want “the level of detail that DT provides” answer?
You appear to have conflated two different concepts. The most elegant and compelling arguments are often the simplest to understand yet the hardest to present. Just because there is detail does not mean it cannot be presented in simple terms.
So, a detailed argument that is accessible to everyone would be ideal, please?
In other words you can't thus try to obfuscate.
Nope, very happy to reply, but do you want me to ”explain like I am five”, or do you want “the level of detail that DT provides”?
If your comment is made in good faith, then this supposes that you are not able to simplify the argument. So we will see!
Thanks for clarifying that you want the ”explain like I am five” option.
I’ve got some stuff to do now, but I shall get to it later on this morning.
Again, Figure 1 doesn't even take into consideration the additional ongoing capital costs of maintaining a duplicative backup (gas or nuclear) infrastructure for when the wind doesn't blow, the sun doesn't shine, the rainbows and unicorns don't appear.
The Capacity Market pays for under used generators to stay in business and keep their plant maintained in case it's needed, along withbstandby staffing. Prices paid have been escalating in recent years, and are now actually high enough to fund a newbuild CCGT plant financing and depreciation costs - at least if it were allowed a full 30-40 year life. But no-one will build one given policy is to shut them down or force what's left to add "carbon" capture by 2035.
That was my point. I was referring to CAPITAL costs, in other words the cost of building NEW backups over time. Present grid balancing and backup costs only consider existing plant not new replacement costs. And as you rightly say, who would build a new plant at enormous cost UNLESS the subsidies were even higher to guarantee an adequate ROI. That was precisely my contention that the CAPITAL costs (of new backup plant) were NOT fully factored in.
My point was that if they were on a normal plant life the CM would pay for new build generation already. But it's because they are threatened with being shut in a decade that those economics don't apply. Even refurbishment/taking out of mothballs is risky: see Calon.
I'd add that ageing plant will need to be replaced quite soon. Probably most of the CCGT fleet by 2035 when even Pembroke would be 23 years old: if they want to add CCS to that the cost will be massively higher. I doubt they really have much idea what the end result would be, as we have no functional CCS units anywhere in the world other than small projects in Canada where the CO2 is used for enhanced oil recovery.
CCGT on its own is really not all that high in cost if it is allowed a proper economic life. It's well under £1bn/GW with a possible utilisation as high as 85% in baseload. Keadby 2 was much less than that, built at an existing site: £350m for 840MW with up to 64% efficiency as baseload.
Its also paying for a lot of batteries now as well.
It's another onion skin of battery revenue, rather than paying for them entirely. It comes at a cost of not being able to enter fully the most lucrative markets when supply is tight separately, but provides a steady monthly income. Batteries are not rated all that highly for the capacity market, although they were given a substantial boost last time out. Modoenergy explains the change in regime here:
https://modoenergy.com/research/gb-capacity-market-2025-bess-derating-factors-confirmed-target-capacity
At £60k/MW and a capacity factor of ~20% for a 2 hour battery it's £12k/MW/a out of perhaps £80k/MW/a total net revenue.
That's a combination of the grid balancing and backup costs which will likely rise substantially as the penetration of intermittent wind and solar increases.