In the UK the wholesale price was about £80/MWh in 2025. The retail price was about £270/MWh + a standing charge. If you factor in the standing charge, an average user paid about £344/MWh. So the cost of generation was only about 23% of the retail price. I believe the green levies + CfDs accounted for about another 15% of the retail price.
Does this mean that if generation was free, and there were no green policy costs, our electric would still be expensive?
edit: "Network and Distribution" appears to contribute about 23% of the retail price. I guess green energy increased that cost because wind/solar are more spread out and sometimes off-shore.
It is important to realise that the current pricing mechanism is not an accident, and has some non-obvious benefits that need to be weighed against the obvious drawbacks. Clearly other mechanisms exist, which might solve the obvious drawbacks, but it is a choice of tradeoffs rather than a simple fix.
One could argue that it’s the “big boys” favour to build out “just enough” renewables in places that are further away from demand, so that gas still sets the price even if it’s just a fraction of what’s actually being used.
Min/max profits, but that would be crazy talk right! I’m sure the large energy producers have my best interests at heart really.
in absolutly any other business having a 50% cost advantage would be catestrpohic for competition and front page news signaling a new era, but for this it's shrug and unprecidentidly lame mumbling about "uncertainties" and guff guff harumphf!
somehow tommorow there will be worldwide headlines decribing the wonders of science inventing a new better kind of intermitent wipers
It is a new era, and has been for a while. 50% of new capacity globally has been renewable since 2012 and keeps growing. It was 92.5% last year and almost certainly higher for 2025.
In the US it was 99% wind, solar, batteries.
The people talking this down are in an info-bubble of their own creation.
This is highly misleadling. Nobody is setting the price, it is determined by an open market. This naturally drives it towards the price of the cheapest energy source with available capacity (often natural gas). It would be irrational to sell electricity for cheaper than this. If more batteries get deployed, the price will more often get set by battery storage instead.
It sounds like a crazy system. But wouldn't it also make deploying renewables there wildly profitable? Sunlight is free but you get paid like you burned natural gas.
Then this is probably not the article to be speculating on.
We have a most favoured nation charging, so whatever costs the most sets the price.
> The more renewables we have, the more expensive the electricity is.
Because pricing is disconnected from cost. This is to encourage more cheap green because the margins are higher.
> The renewable electricity producers are providing a service which no one want nor would normally buy but everyone is forced to buy it and subside it.
We are currently sitting through some of the heaviest rainfalls in Britain. My area normally gets about 50mm of rain in January, and instead we have had 130mm. So I think you can take your climate change denial and shove it.
> The more renewables we have, the more expensive the electricity is.
Correlation is not causation. Renewables bring costs down, but other factors affecting Europe and the UK are causing costs to rise, outpacing reductions.
Gas can produce enormous amounts of power at short notice 100% of the time and is cheaper per watt, nobody builds a 5MW twin cycle gas turbine power plant. There is a reason it sets the price at market. The CFDs are locked in at persistently high prices for decades. All these actions will increase costs to customers.
There is a reason our energy costs are the highest in the world, it is because our politicians persistently make choices like the ones described in this article.
These prices are a lot closer. You can play around with the assumptions in the government's LCOE calculator spreadsheet linked from the article. Removing the carbon price and using pre-wind load factor of 75% gives a LCOE of £67/MWh, which is similar in cost to solar at £65/MWh and onshore wind at £72/MWh, albeit lower than offshore wind at £91/MWh.
Assuming future costs of gas will go down is risky too. UK North Sea production is falling and recovery costs are likely to increase as we are left with only more marginal deposits.
It isn't though? Even at high assumed load factor for gas wind beats it on LCOE £/MWh. [0] And not by a small margin either.
The only edge gas has is qualitative not price - it is dispatchable nature...and the cost of energy storage is in freefall. The trendlines here are not subtle.
>There is a reason it sets the price at market.
Yeah the sooner we get rid of ungodly expensive on demand peaker gas doing exactly that price setting the better for us all.
It’s is categorically not cheaper per watt. Solar and wind are roughly £50/MWh and gas is £125/MWh. Not just LCOE but this is taking into account build cost. It’s insanely more expensive. What kind of low quality shill are you?
abainbridge|18 days ago
Does this mean that if generation was free, and there were no green policy costs, our electric would still be expensive?
edit: "Network and Distribution" appears to contribute about 23% of the retail price. I guess green energy increased that cost because wind/solar are more spread out and sometimes off-shore.
owlbite|18 days ago
guidedlight|19 days ago
They need to fix their market pricing mechanism before the public benefit from cheaper renewable energy sources.
jl6|19 days ago
mjw1007|19 days ago
adrianN|16 days ago
Crosseye_Jack|18 days ago
Min/max profits, but that would be crazy talk right! I’m sure the large energy producers have my best interests at heart really.
metalman|18 days ago
somehow tommorow there will be worldwide headlines decribing the wonders of science inventing a new better kind of intermitent wipers
ZeroGravitas|18 days ago
In the US it was 99% wind, solar, batteries.
The people talking this down are in an info-bubble of their own creation.
KevinMS|18 days ago
benj111|18 days ago
NVHacker|19 days ago
fsh|19 days ago
ZeroGravitas|19 days ago
triceratops|19 days ago
Epa095|19 days ago
It just means that the price is determined by the price where the demand curve crosses the supply curve.
qualitylearing|18 days ago
[deleted]
qualitylearing|19 days ago
[deleted]
mono442|18 days ago
[deleted]
happymellon|18 days ago
Then this is probably not the article to be speculating on.
We have a most favoured nation charging, so whatever costs the most sets the price.
> The more renewables we have, the more expensive the electricity is.
Because pricing is disconnected from cost. This is to encourage more cheap green because the margins are higher.
> The renewable electricity producers are providing a service which no one want nor would normally buy but everyone is forced to buy it and subside it.
We are currently sitting through some of the heaviest rainfalls in Britain. My area normally gets about 50mm of rain in January, and instead we have had 130mm. So I think you can take your climate change denial and shove it.
https://www.reading.ac.uk/news/2026/Expert-Comment/Rain-for-...
austinjp|18 days ago
Correlation is not causation. Renewables bring costs down, but other factors affecting Europe and the UK are causing costs to rise, outpacing reductions.
DamonHD|18 days ago
PunchyHamster|19 days ago
monsecchris|19 days ago
There is a reason our energy costs are the highest in the world, it is because our politicians persistently make choices like the ones described in this article.
laurencerowe|19 days ago
Assuming future costs of gas will go down is risky too. UK North Sea production is falling and recovery costs are likely to increase as we are left with only more marginal deposits.
Havoc|18 days ago
It isn't though? Even at high assumed load factor for gas wind beats it on LCOE £/MWh. [0] And not by a small margin either.
The only edge gas has is qualitative not price - it is dispatchable nature...and the cost of energy storage is in freefall. The trendlines here are not subtle.
>There is a reason it sets the price at market.
Yeah the sooner we get rid of ungodly expensive on demand peaker gas doing exactly that price setting the better for us all.
[0] https://assets.publishing.service.gov.uk/media/696697d19d9b9...
dyauspitr|18 days ago
yladiz|19 days ago
hshdhdhj4444|18 days ago
> This means they will help cut consumer bills, according to multiple analysts.