The government tells us that UK electricity prices are amongst the highest in the world because our electricity is priced from gas generated power on many days and this is now expensive. They claim that as we add more and more wind and solar to the grid, so the price of electricity will come down, replacing the dear gas generated energy. This has not happened so far, with our electricity prices climbing as we add large amounts of new renewable power. It also leaves open the question why the government does not change the pricing arrangements if the cause is as they describe. The result of days of shortage of wind when gas is a larger part of the mix and also pushing up the prices of every other type of generation could presumably be adjusted by different pricing methods.
How can I put this tactfully to the government? It is likely to be dearer to rely on increasing amounts of renewable power when you have to allow for all the capital and running costs of a duplicate back up system for when the wind does not blow. Whilst it is true that the costs of the gas fuel can be high when world markets are disrupted by wars, the costs of the windfarms do not stop with just the costs of putting in the turbines and blades. The investor in new facilities would need to find the high up front capital costs and the debt service. They would need to pay for maintenance and accept a shorter active life for the wind farm than for the gas power station. They would need to pay a gas power station to be on stand by for days when the wind did not blow. They would have to pay premium prices for the gas power when they did need to rely on a gas power station . It would have to charge more as it stands idle for long periods of time and so needs a higher price when it can run. By definition it is likely to run most when gas prices are dearest, as it runs when all else has failed in the system leaving us short of energy. It is true just building a new gas power station would also have a high capital cost and also have higher running costs as it needs to buy in gas. It is difficult for renewable power to be cheaper all the time there has to be a duplicate gas system on stand by as well.
The extra costs for the country do not end with the issue of capital cost and running costs of the different generators. The renewables system needs considerably more grid capacity. Much of the wind power is generated many miles away from the electricity consumers so the grid needs to be enlarged. In order to keep the system balanced when more renewables are destabilising the grid the operator needs to add expensive big investments to create inertia to avoid problems with system stability. They may need as a cheaper answer old gas power stations to keep spinning without the boiler. There are black outs if the system is driven outside its safe power ranges. It is true the country could move to battery or hydro storage of power, so the system can store electricity when there is plenty of wind and run down the stores when the wind drops. All this extra storage capacity has a capital cost. There are losses of electricity from storage and issues about how much storage is needed. The technology of long duration storage is still developing. A longish period of high pressure with little wind especially in a cold winter with high demand for power could stretch the system and would require major storage investment to be safe.
The government beneath the gas soundbites is at last thinking through why the electricity price climbs as more renewables are added, and why there are new concerns about system stability. The Chancellor has said it makes no sense to add more renewables all the time there is a shortage of grid capacity to send the power to the customers. The Energy Minister has confirmed there is too much wind electricity generated in Scotland much of the time, leading the system to have to pay large sums to wind producers not to produce. They also have to pay large sums to gas generators in southern England where more of the power is needed to switch on to see them over surges in demand or during periods of low wind. Last year £1.5bn was paid to level out wind and gas power to get the electricity to the right place. Some forecast this sum surging to £8bn by 2030 as we become more dependent on wind. The grid lacks pylons and power lines to bring enough of the Scottish power south. It also needs to add inertia to its system to keep it stable, which requires investment in synchronous condensers and grid forming inverters,
In the second quarter of 2026 the electricity supplied cost £333 out of a total bill of £875 for a typical household according to Ofgem. Transmission of the power and distribution to the home cost £199. The costs of balancing renewables and gas were £42 and the costs of low carbon policies were £56. Vat added £42 and company profit £22. Other costs accounted for the rest. This reveals that the UK has chosen an expensive way of planning its energy transition. It still has an ageing grid with the need for updating to handle the renewables and to cope with higher overall demand. This will prove costly and may add another £200 to bills by 2030 if the work proceeds in a timely way.
The UK has also foolishly decided to run down its own gas supplies, preventing new exploration and delaying production of proven reserves. As result it has to import more LNG when it needs more gas to fuel its power stations. At times of world market stress and shortage this is particularly expensive. LNG is always likely to be dearer than piped gas from a local field owing to all the additional costs – and CO 2 generation – from liquefying, cooling, transport and re gasifying the product. More local gas could be secured under long term contracts with some smoothing of spot price market volatility.
Ministers are desperately looking at all the items on a household bill to see what more they could do to try to reverse the remorseless upwards trend. They have been transferring some policy costs of transition to general taxation and have now begun to think about limiting the rise in payments to windfarms to abate their output. This in turn leads to large extra spending on grid improvement and expansion, There is a particular pinch point in getting excess wind energy out of Scotland heading south to the large markets of London and the south-east. Meanwhile previous generous guaranteed prices for wind and solar power keep average costs high and have led to the imposition of a windfall profits tax on those who benefit most from past unlimited prices.
The price of domestic electricity is four time the price of gas based on the cost per kilowatt hour. Advocate of heat pumps say that their much greater efficiency can remove the cost disadvantage. It does not remove most of it for electric heaters compared to gas boilers to heat a home. This has made people reluctant to switch from gas central heating to electricity, which in turn has avoided a big additional build up in power demand which the present electricity system could not accommodate without more grid. All the renewables come at a high total cost and will be dearer than the older fossil fuel generators who have to close their plants prematurely. All these renewables also come with CO2 produced in the making of the turbines, solar panels and the shipping to bring them to the UK.
It is good to see the government rethinking the speed and nature of the energy transition. They are learning the hard way that some of the policies adopted in the name of net zero increase world CO 2 output, whilst failing to lower UK electricity prices. They also need to be concerned about the loss of supply security with increasing dependence on imports and with grid management issues with so much renewable interruptible power in the mix. Keeping the lights on should be their first duty.
November 6, 2026
JR’s carefully worded IAE article “What is the cheapest way to keep the lights on?” presents a deeply flawed case against renewable energy, while advocating for a retro return to fossil fuels.
I have previously posted here repudiations of many of the points raised here, particularly the “curtailment” chestnut,The total value of the electricity produced in this country in 2024 – from all sources – was about £172bn. Curtailment of £1.5 billion represents about 0.9%
He argues that renewables drive up consumer bills by requiring expensive grid upgrades, storage, and backup CCGT plant. However, this ignores how UK wholesale electricity is priced; under the marginal pricing system, the most expensive generator needed to meet demand – always imported gas – sets the clearing price for the entire market. Meaning consumers rarely benefit directly from the fact that wind and solar are now the cheapest forms of new power generation – by far
Furthermore, his call to expand N Sea extraction ignores basic market realities. North Sea reserves are mature, declining, and sold on global markets; increased domestic drilling would neither lower UK bills nor guarantee energy security. Meanwhile, grid modernisation and long-duration electricity storage are essential one-off investments, whereas fossil fuels lock Britain into permanent, volatile fuel costs and accelerating climate breakdown.
True energy security and lower bills lie in accelerating – not halting – the transition to abundant, homegrown clean power.
Reply Once again you deny the facts. Curtailment costs are going to surge, some say up to £8 bn. The Chancellor and Energy Minister have both rightly spoken against this and the Chancellor wants fewer new renewables signed up because of this.
November 6, 2026
SG is very selective. If renewable operators were paid their bid price, they would go bust. They only invest in this country because the system guarantees a high unit cost.
Power cuts are inevitable over the next few years and the government is going to have to explain why, we have a theoretical installed capacity of 100 gigawatt and a demand of less than 50 why are we unable to keep the lights on.
This will lead to a forensic review which will highlight the rank stupidity of net zero.
Until we have a large base load of nuclear and ccgt plants the grid will be unstable and unreliable.
The Emperor is very soon going to be seen to be naked
Bring it on.
November 6, 2026
Curtailment costs are 0.9% of wasted cost. Look after the pennies and the pounds will look after themselves.
Our Andeh has chosen to make many small cuts to living costs to provide breathing space. 0.9% would help in that endeavour.
I find the “it’s just 1.0%” argument (they say the same about immigration and foreign aid) a fallacy. All savings should be considered
November 6, 2026
the AI crash should reduce predicted demand, lol.
just when the market decides there is over provision of something our government decides to “invest” public sector money in it. may as well burn money for heating.
comments from Dom Cummings about the main parties seem spot on, no doubt they will ignore him and continue their death spirals.
November 6, 2026
The November 2026 mid-term elections have dealt a catastrophic blow to the Republican Party, largely catalysed by a disastrous foreign policy pivot.
A “blue wave” swept Democrats into commanding control of Congress, flipping historically deep-red seats in states like Texas and Kansas.
The primary catalyst for this electoral collapse was the escalating war in Iran, which Trump’s administration launched in late February 2026. The conflict has severely backfired geopolitically and economically as the IRGC completely destroyed the American naval base in Bahrain and seriously damaged 27 US bases in 8 countries across the region, including forcing American troops to evacuate Iraq.
None of Trump’s objectives in the war were achieved and particularly, the religious fanatics running Iran remain in place. By disrupting global energy corridors, the war sent American domestic gasoline and diesel prices soaring, triggering severe inflation that has heavily strained American households. And Britain’s.
Voters viewed the military entanglement as a direct violation of Trump’s 2024 campaign promise to end foreign wars. Trapped in an eight-month conflict with no clear exit strategy, the administration faced intense public backlash. Independent and suburban voters soundly rejected the GOP, transforming the mid-terms into a punishing referendum on Trump and his highly unpopular war.
November 6, 2026
Whatever you think of Trump, his motives were correct. Iran with nuclear weapons will no hesitate to use them which will make the temporary closure of Hormuz insignificant.
These people are fanatics and don’t value human life. Thankfully most Iranians are decent hard working people.
November 6, 2026
Those who delight in President Trump’s comeuppance at the polls may not have read Democratic manifestos.
Better the devil you know perhaps (Starmer? Burnham?). It’s not like the Democrats haven’t been warmongers in the past
November 6, 2026
Very interesting and informative article. Contributing factors to the mess we are in appear to include ideology, poor understanding of the energy system (eveything from the practicalities to the economics) and vested interests/lobbyists.
Ideally I would want us to reopen trade with Russia, Europe’s biggest supplier of hydrocarbons. Our new reliance on the US is troubling, as they are very mercenary and will want to yoke us permanently to their product. It may well be too late as we’d need a political upheaval here of AfD proportions to rebalance our outlook. Practically too it might become impossible: some pundits reckon the US will rebuild and operate Nordstream so as to take a fee on top of the Russians’ profit, and increase their leverage on Europe. What an irony that would be.
November 6, 2026
I suppose the new tourist tax will reduce demand for tourists to come here, or stay in this country for their holidays, so that should reduce demand for electricity in this country. I suppose destroying more businesses is a price worth paying to keep the lights on and virtue signal about your green credentials.
November 6, 2026
The current issue of the day is AI infrastructure debt, not their equity exposure. Billions in loans are secured against projected data centre revenues that simply don’t exist. They’ve been using the projected revenues from those same data centres to justify further borrowing. A circular financing structure…
Several US banks has reportedly approached the Fed for emergency liquidity.
Officials have apparently been instructed to avoid using the words “insolvency”, “contagion” or “AI bubble” in any written comms.
Lets see how the UK ruling class react to this, and what the AI leaders hired at great expense onto the public payroll have to say, as they sure have not been predicting this.
Reply The main US tech companies are very profitable and can easily afford their borrowings.
November 6, 2026
Russian General Valery Gerasimov has announced a decision to halt the Donbas offensive. Relentless Ukrainian drone strikes on critical infrastructure, including the Kapotnya, Yaroslavl, and Ryazan oil refineries, have decimated Russia’s operational fuel processing capacity.
Faced with severe shortages and fuel panic in the capital, the Kremlin prioritised political stability. This forced Gerasimov to divert front-line fuel reserves to keep Moscow supplied, freezing large-scale offensive drives in Donetsk.
The Ukrainian High Command can now aggressively exploit this operational pause. With Russian forces lacking the fuel to move heavy armour or sustain deep advances, their formations are transitioning to static defensive postures. Ukraine can utilise this breathing room to rotate exhausted units, fortify defensive lines around key hubs like Sloviansk and Kramatorsk and launch targeted counter-attacks against isolated, immobile Russian positions.
Furthermore, continuing the Ukraine deep-strike campaign against remaining energy infrastructure will permanently starve the Russian war machine.
All this increases the chance of Putin, the war criminal being dragged kicking and screaming into meaningful peace negotiations.
November 6, 2026
We seem to be in a real mess with some of life’s essentials.
Water, Electricity, Gas, and Oil.
Then we compound all of the above with high taxation, little foresight, and rushed Net Zero policies.
Add to all the above our problems with funding our own Defence properly when we have porous boarders, and you wonder what actually goes through the minds of past and present politicians of all colours.
Ah yes, apologising for the Slave trade, and possible reparations when Tony Blair has already done that in 2007,
(www.historynewsnerwork.org) text of Tony Blair’s statement on Slavery
In the meantime most of the Commonwealth Countries have had access to our huge Foreign Aid Budget for more decades than I can remember.