The UK has been setting new renewable generation records, while also pushing its share of imported energy, particularly gas, to the lowest level since 2004. The Energy and Climate Intelligence Unit (ECIU) has used new government data to show that 46% of primary energy used to supply electricity to the UK was imported in 2025, down from 48% in 2024, and well down on the peak of 67% in 2013. ‘The expansion of renewables is more than making up for the ongoing decline in North Sea gas output which has happened even under decades of policy to maximise extraction.’
However, not everyone is so sure that all is going well. Electricity is too expensive- and renewables aren’t helping. So says Justin Rowlatt in a recent BBC news report, under the heading ‘Why cheap power could matter more than clean power in the push to net zero.’
He says that, on the supply side ‘solar power has seen dramatic cost reductions thanks to mass production. But Britain's often dull skies – especially in winter, when demand is highest - limit how far it can carry the system. Offshore wind is more dependable but it involves large, site-specific engineering projects that cannot be replicated in the same way, and so have not seen the same sustained falls in cost. At the same time, rising prices for materials such as steel and rare earths- along with higher interest rates - have pushed costs up further’.
On the demand side, he says that ‘a survey of 1,000 heat pump owners last summer, carried out by Censuswide for Ecotricity, found two-thirds said their homes were more expensive to heat than before’. And he says that, although heat pumps can deliver up to three or four units of heat for every unit of power, as heat pumps run on electricity, you may now be paying ‘around 27p per kilowatt-hour, compared with less than 6p for gas that powers a boiler - more than four times as much’.
He did note that the price of power reflected the way the market was set up, based on the price of gas - something that Chancellor Rachel Reeves has now promised she will try to fix, since ‘we end up paying more for our electricity, even though the cost of producing it doesn’t change’. See my next post on this. It has certainly been a problem for electric-fired heat pumps. But, in terms of reducing the cost of power, he seems to think, given also the cost of balancing variable renewables, direct use of (more) gas was best for now, as the Tony Blair Institute has also argued - along with the Tories and Reform!
In a reply, Juliet Davenport, one-time CEO of Good Energy, complained about ‘shallow journalism’. She claimed that in fact ‘through the Contracts for Difference (CfD) mechanism, renewables are not just decarbonising the system - they are stabilising and, in many periods, lowering wholesale costs. The rebate mechanism paid out around £0.5 Billion during the last price shock, and dynamic is increasingly visible today, yet rarely reflected in consumer-facing narratives’. But she added ‘the uncomfortable truth is that today’s high retail electricity prices are not primarily a function of renewable generation. They are a function of legacy cost allocation, policy design, and - crucially - infrastructure catch-up.’
Certainly, for renewables to deliver fully, there is an urgent need for upgraded infrastructure, grid links and storage systems. Otherwise we may be struggling to cope with climate change impacts on the economy - especially since spending on adaptation has been relatively low. Indeed, a recent LSE Grantham Institute study warned that, by 2050, climate change could ‘reduce income for the average person, measured in terms of GDP per capita, by between 3 and 15% due to rises in local temperatures, sea-level rise and some tipping points’. That’s based on the plausible ‘worst case’ scenario of a rise in global average temperature of 2.2–2.8°C relative to a pre-industrial climate, and assuming no further increases in adaptation and resilience. It adds that, without large reductions in greenhouse gas emissions, ‘these impacts are likely to continue to intensify or even accelerate in the latter half of the 21st century’.
However, it says that, ‘under a scenario that approaches 2°C of temperature rise by the end of the century, GDP per capita and welfare impacts stabilise by mid-century’. And putting it all in perspective, the Climate Change Committee say ‘the total additional cost of a single fossil fuel price spike of 2022 magnitude is likely to be as large as the total net additional cost of meeting the pathway to Net Zero across every year to 2050.’
The way ahead does seem clear, at least for the near future. In a Nature article Wagner says ‘shifting to technologies that can only get cheaper and better over time is an investment in geopolitical & price stability.’ Certainly, fossil energy is bound to get more expensive as the resources get scarcer, though that’s also true of rare earth materials which green energy technology uses. But, unlike fossil fuel, some of these materials can be recycled. Even so, while renewables and recycling will help, there may be limits to how much we can expand the global economy.
The debate continues, with some like the National Energy Briefing group, saying that, while renewables can help to green power supplies quite quickly, and also, soon after, industrial energy use, it will be harder to deal with transport fuels. It certainly is an issue - aviation emissions especially. In his BBC article, Rowlatt noted Prof. Kevin Anderson’s point that emissions from international aviation (and also shipping) were not included in the UK emissions statistics. There may be some technical fixes which might help, but they are likely to add to the cost of flights. Though we will have to wait to see what the impacts of the war on/in Iran will be on the cost of flying. Perceptions of what is reasonable may change: for example, the fuel price rise has boosted EV take up significantly in the UK and elsewhere. Presumably that wasn’t what Trump had in mind!
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