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UK offshore wind prices come in 40% cheaper than gas in record auction

electrek.co

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Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#61

Post by jakewins »

fuoqi wrote: post #56
nothrabannosir wrote: post #53

Earlier quoted context omitted.

> Trying to change consumption habits (like smart grids, dynamic pricing, etc.) works poorly, especially for such vital resource as electricity. Why? Has the UK started trying recently? When I lived there nobody gave a hoot about fluctuating prices. It would have been hard to even know when electricity was expensive or not. Has it changed? Meanwhile >three decades ago my grandparents in rural France had a big red lam…

This does not work at scale . Sure, there is plenty of anecdotes how you can successfully play this game as a consumer living in a rural house with electric car, power wall, and rooftop solar, but try to telling about it to someone living in a high-rise apartment or to a heavy industry business. Your preaching will fall on deaf ears. IIRC there are several utilities in the UK which provide option to price electricity…

The most popular UK electricity retailer is Octopus Energy which is specifically focused on variable prices and flexible consumer demand. By what metric do you mean variable rate retailers are not popular?

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#62

Post by jakewins »

Alupis wrote: post #54
breve wrote: post #30

Earlier quoted context omitted.

> The actual cost of gas The actual cost has to price in the impact of using it. For example, it's cheaper for UK water companies to pump sewage into rivers and onto beaches: https://www.bbc.com/news/articles/cz9kz8ydjpno https://www.bbc.com/news/uk-england-london-67357566 https://www.bbc.com/news/articles/c5yprnd848ko https://www.theguardian.com/environment/2025/sep/16/sewage-o... But maybe it's a nice idea to force…

> The actual cost has to price in the impact of using it. Is there real evidence the collected tax revenue is actually offsetting carbon emissions? There's a lot of fraud in carbon credit systems - where often the sole benefit is feeling and/or looking good. Is this self-imposed tax actually having a real result - or is it just artificially increasing the price of energy? If the latter, then it's not really fair to c…

.. you are commenting on an article about how non-carbon-emitting energy options are beating out polluting alternatives, aided by exactly these taxes, so obviously yes, they are working exactly as intended: price signals for the market to get carbon out of the energy system

The purpose of the tax is not to raise money to plant trees, it’s to raise the cost of emissions so that markets move away from them

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#63

Post by b3orn »

Alupis wrote: post #54
breve wrote: post #30

Earlier quoted context omitted.

> The actual cost of gas The actual cost has to price in the impact of using it. For example, it's cheaper for UK water companies to pump sewage into rivers and onto beaches: https://www.bbc.com/news/articles/cz9kz8ydjpno https://www.bbc.com/news/uk-england-london-67357566 https://www.bbc.com/news/articles/c5yprnd848ko https://www.theguardian.com/environment/2025/sep/16/sewage-o... But maybe it's a nice idea to force…

> The actual cost has to price in the impact of using it. Is there real evidence the collected tax revenue is actually offsetting carbon emissions? There's a lot of fraud in carbon credit systems - where often the sole benefit is feeling and/or looking good. Is this self-imposed tax actually having a real result - or is it just artificially increasing the price of energy? If the latter, then it's not really fair to c…

Carbon tax is not about offsetting emissions, it's about disincentivising fossil fuels.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#64

Post by mr_00ff00 »

hkt wrote: post #51
mr_00ff00 wrote: post #26

Earlier quoted context omitted.

Can you give an example of a better method? The one that I can think of is the government sets the amount of electricity produced, and then it’s rationed. But I doubt the UK would be happy with rationed electricity where your power shuts off the second it’s over. That would be essentially mandatory blackouts all the time. Not to mention the cost would be held by the government, so you end up paying it in taxes anyway…

Rationed electricity might also come in the form of a universal basic entitlement, followed by market price for higher usage. One assumes under such a system that the state would own and operate energy production and that they would, for instance, increase the ration over time, leaving the remaining needed capacity to be fulfilled by the market. Honestly, pricing based on the cost of financing and operation isn't a t…

Sure much you will end up with more energy consumed. If it’s a free ration, almost everyone will consume all that they are given up to the limit.

Under the current system, when energy becomes hard to produce or more people need it, rising prices means people will reduce. So pricing for cost of financing, sure, but it might be a higher cost because people will consume more.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#65

Post by Alupis »

jakewins wrote: post #62
Alupis wrote: post #54

Earlier quoted context omitted.

> The actual cost has to price in the impact of using it. Is there real evidence the collected tax revenue is actually offsetting carbon emissions? There's a lot of fraud in carbon credit systems - where often the sole benefit is feeling and/or looking good. Is this self-imposed tax actually having a real result - or is it just artificially increasing the price of energy? If the latter, then it's not really fair to c…

.. you are commenting on an article about how non-carbon-emitting energy options are beating out polluting alternatives, aided by exactly these taxes, so obviously yes, they are working exactly as intended: price signals for the market to get carbon out of the energy system The purpose of the tax is not to raise money to plant trees, it’s to raise the cost of emissions so that markets move away from them

TFA's claim is offshore wind prices are 40% cheaper than gas.

The parent comment stated "actual cost has to price in the impact of using it". Most people would agree on this. However, for both claims to be true, the collected tax revenue must be spent offsetting the impact of that gas usage - not simply reducing gas usage (ie. that consumed gas isn't being compensated for).

If the UK government is spending that tax revenue on anything it wants, then it's not the actual cost, is it?

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#66

Post by lostlogin »

BJones12 wrote: post #44
gruez wrote: post #29

Earlier quoted context omitted.

>* the gas price in the article includes the government’s self-imposed carbon tax. The actual cost of gas (£55) is FAR lower than the £91.20 strike price Milibad has set for wind. Is that unreasonable? Carbon dioxide is an externality, and it needs to be accounted for accordingly. Suppose the government is tendering contracts for milk for school lunches. One farm runs a CAFO[1] that pollutes the local river. The othe…

> Is that unreasonable? Carbon dioxide is an externality, and it needs to be accounted for accordingly. Yes it is unreasonable. Spending money to reduce carbon is just a subsidy for other countries who DGAF and will emit both theirs and yours.

Do you apply this logic for everything?

Dumping your waste, others be damned, is a hell of a way to live.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#67

Post by Moldoteck »

Havoc wrote: post #2

Now if only the UK didn't have an insane system where all electricity is purchased at the highest cost in the mix. i.e. if you're buy 99% cheap RE, 1% expensive gas then you're paying for 100% at the higher gas price.

All countries have merit order and it's not insane

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#68

Post by krferriter »

b3orn wrote: post #63
Alupis wrote: post #54

Earlier quoted context omitted.

> The actual cost has to price in the impact of using it. Is there real evidence the collected tax revenue is actually offsetting carbon emissions? There's a lot of fraud in carbon credit systems - where often the sole benefit is feeling and/or looking good. Is this self-imposed tax actually having a real result - or is it just artificially increasing the price of energy? If the latter, then it's not really fair to c…

Carbon tax is not about offsetting emissions, it's about disincentivising fossil fuels.

It is about disincentivizing fossil fuels because there are negative externalities which are not priced-in absent the carbon tax.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#69

Post by chippiewill »

Havoc wrote: post #2

Now if only the UK didn't have an insane system where all electricity is purchased at the highest cost in the mix. i.e. if you're buy 99% cheap RE, 1% expensive gas then you're paying for 100% at the higher gas price.

This line of chatter has been going around UK-centric online discussions and it's such a braindead line of thinking. Marginal pricing is used in a gazillion countries and is tried and tested.

You do marginal pricing because otherwise providers will simply bid what they think the crossover price will be - marginal prices lower prices in the long run because providers try to improve their margins and lower their bids.

Also renewables bid on the spot and day ahead markets really low because their cost is almost entirely capex (and also most are under CfD anyway so may as well bid 0) - the spread isn't nearly as good as the data would imply. If you didn't use marginal pricing you'd have them bidding higher to cover their capex.

Re: UK offshore wind prices come in 40% cheaper than gas in record auction

#70

Post by ahmeneeroe-v2 »

breve wrote: post #30
cbeach wrote: post #16

This is poor reporting by Elektrek. The article compares wind and gas costs but completely fails to explain: * the gas price in the article includes the government’s self-imposed carbon tax. The actual cost of gas (£55) is FAR lower than the £91.20 strike price Milibad has set for wind. And Miliband has locked in this terrible pricing for 20 years! * there are huge extra costs for wind power that are not accounted fo…

> The actual cost of gas The actual cost has to price in the impact of using it. For example, it's cheaper for UK water companies to pump sewage into rivers and onto beaches: https://www.bbc.com/news/articles/cz9kz8ydjpno https://www.bbc.com/news/uk-england-london-67357566 https://www.bbc.com/news/articles/c5yprnd848ko https://www.theguardian.com/environment/2025/sep/16/sewage-o... But maybe it's a nice idea to force…

The "actual cost" is a loaded term and probably cannot be known without putting reasonable bounds on it.

Nonetheless, two thoughts come to mind:

1) we don't know the "actual cost" of offshore wind

2) we may not be able to afford even the "market cost" of offshore wind without the natgas tax subsidy

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