Rapid fire price rises

As we all know, 2021 energy prices to consumers are rising relentlessly. The crux of the problem is mooted to be the wholesale price of gas. This in tern drives up the wholesale price of electricity. The increases this year bandied about by Ofgem and our greedy suppliers, are circa 50%.
I only buy Bulb’s 100% renewable green electricity, 78% wind, 18% solar and 4% hydro.
Why will I be charged an extra 50% rather than the true increase in the cost of green electricity, which may roughly track inflation?
We’re being taken for fools and ripped off!
Another example of Rip Off Britain.


Hey @Monty - welcome to Community!

In a nutshell, the cost of renewable energy is linked to the cost of wholesale electricity. And the cost of wholesale electricity is influenced by global gas (fossil fuel) prices. They’re at a record high because of tight supplies and high demand which is why our tariffs changed.

In the UK, we’re still heavily reliant on gas. We need to keep building more renewable generation in the UK and switch to clean, low carbon technologies like EVs and heat pumps and a smart, flexible electricity grid, to reduce our reliance on gas and (hopefully) benefit from the lower cost of renewables in the long term.

Hope this helps explain a bit more, but let us know if you have any questions!

– H :bulb:

At present, electricity costs approx 5x gas for the same amount of energy.
In order to meet global warming commitments we need to stop using gas and switch to electricity for home heating (assuming the electricity is from renewable sources).
The cost for the electricity consumed by an electric heating system with current tariffs is a large barrier to people switching, as ongoing costs will be about 5x those for gas.
To make this switch economically viable for many customers considering switching from say a 35 year old gas boiler to something new (eg electric heat exchanger/pump), why not change the tariffs so that gas is much more expensive than electricity?
This would provide an incentive for customers to switch.

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Hey @mas - I popped your idea here as I think it links quite nicely into what we said above about building more renewable generation to reduce our reliance on gas.

There are certain initiatives to help encourage people to switch to heat pumps but I can see what you mean about the cost of electricity being on the rise. At the moment, our tariff is linked to the cost of wholesale so this is what informs any changes in our prices and we don’t offer fixed tariffs so this isn’t something we can do yet.

I do agree that we need to make big changes in the run up to net zero, perhaps this is something suppliers will consider in the future :thinking:

The only way to keep your electricity bill down is by switching to a different supplier. I chose bulb a couple of years back because of price and the green credentials were a bonus. But here in the UK, we have a national grid, so the energy you use actually comes from many sources including nuclear, coal, natural gas, wind, solar, hydro, bio fules & some others.

Bulb and other ‘green’ suppliers buy REGO certificates to offset the co2 and claim carbon neutral supply.

So were paying for those certificates to ease our conscience. Otherwise the increase in cost of gas wouldn’t affect the cost of a 100% renewable supplier. It would be like paying a fee every time we drove our petrol or diesel cars based on our consumption to offset the carbon we produced. Even fully electric car drivers mostly charge their cars using energy generated from fossil fuels at the moment, unless they have their own solar farm or large wind turbine to plug into.

Unfortunately we are a long way off supplying 100% renewable energy, and whilst it is going in the right direction, if all new cars sold were to be electric only by 2030 I don’t think the national grid will be able to keep up.

It needs to happen, but current technology isn’t quite there yet so we will just have to live with the rising cost and manage our energy usage to ensure lower bills.

So, where does the extra money collected go if the cost of green electricity hasn’t changed?

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Hey @Rob7 - The cost of green energy is related to the cost of fossil fuels so changes with this- I’m not too sure what you mean by extra money? Would you be able to explain a bit more what you mean and I’d be happy to look into it for you :blush:

Holly, it’s obvious that @Rob7 is alluding to the fact that when allegedly green energy companies harvest freely available energy from wind, solar, et al, and then charge consumers based on the price of costly fossil fuels, there’s a windfall (sorry about the pun) profit that goes straight into the pockets of those companies!
One day, when we approach closer to carbon-zero, the general population will realise they’re being being screwed by this immoral practice and being fobbed off by spokespeople.
Holly, as for you defending the company line…it’s reprehensible!

Sorry about the spelling error in my first post. I’m an ornithologist and sneaked in a species of bird :rofl:.

Hi @Monty, thanks for asking more about this as it is an important conversation to be having.

Although the energy created is ‘freely available’ through renewable sources (that’s the whole idea!), harvesting green energy does cost money- wind turbines, solar panels and hydro power all require plants in order to generate energy from those sources. At Bulb, we partner with generators across the UK to directly purchase their electricity as well as buying energy on the wholesale market with renewable energy certificates to match.

As well as this, there are costs in terms of getting this supply to properties which can vary depending on where you are in the UK. This includes the costs of purchasing the energy off of the generator, the cost of transporting the energy and maintaining the grid and the cost and maintenance of the energy going into their home (the meter) all of which makes up the bill.

As a business, we keep our tariffs reflective of the costs of energy. This means they take all these factors into account when pricing. As we approach net zero, new technologies will be invested in and created as we require more supplies. This in turn, will affect price and renewable energy will become more affordable.

At the moment, tariffs that provide energy from 100% PPAs aren’t affordable for millions of people. We don’t think anyone should be left behind in the race to net zero so as well as providing green energy, we, and other suppliers can also install energy efficiency measures in low-income households, and help people with their energy bills through the Warm Home Discount.

In the future people will be producing their own energy and we’ll have battery storage which means that any excess energy is saved (it currently goes to waste) and will bring down the cost. We want to make green mainstream, and we’ve fuelled an enormous growth in the demand for renewable energy but there’s still a way to go.

I’m not sure I follow.

Why does the cost of a unit of green electricity go up because of the rise in price in electricity produced by gas fired power stations?

I can appreciate that getting supplies to properties increase with time but that is covered by the standing charge, not the cost per kWhr.

Hey @Rob7

Changes in the wholesale market do impact us when we supply renewable energy. At the moment, there is only one price for electricity and gas and the cost of renewable energy is linked to this. So higher fossil fuel prices put up the price of renewables too.

The UK is still heavily dependent on gas-fired power plants for a significant chunk of electricity generation meaning higher gas costs mean higher electricity costs too. Overall, with the rising gas costs, the cost of electricity goes up as well and the whole energy market is affected.

As I’ve mentioned above, it’s important to aim at reducing reliance on gas and keep building more renewable generation in the UK in order to benefit from the lower cost of renewables in the long term.

We’ve actually built a taskforce recently to help reach net zero and accelerate progress in climate tech. You can read about if you’re interested here.

If you have any questions let me know :slight_smile:

– H :bulb:

If green electricity is cheaper than gas sourced, then all the energy companies will provide the green power - increasing demand. And there’s only “so much” power green electricity can produce - so the price goes up and suppliers have to supplement their green sourced power with gas-sourced to ensure customers get their supply.

If there is only one price for electricity and gas, how can other suppliers offer a different price overnight say for EV owners?

Again, if you only sell green energy, why is the cost of gas a factor?

Except that Bulb “provide our members with 100% renewable electricity from solar, wind and hydro”.

There’s no mention of supplementation with gas sourced electricity.

@Rob7 let’s say approximately half our electricity comes from fossil fuels. Renewables and nuclear are the other half. There’s obviously a conspiracy to price the whole electricity market linked to the most expensive type of generation and then not explain the reasoning to us.
We can’t generate our own power, so we’re deceived and fleeced. As that’s the case, there’s no reason ever to go green, unless you’re the electricity company selling the wind at gas prices.

@Rob7 - The UK is still dependent on gas-fired power plants for a significant chunk of electricity generation. So, higher gas costs mean higher electricity costs too. Higher wholesale costs then impact the cost of renewables.

We’ve written more in our blog post about how its all connected as well.

In terms of EVs and tariff costs, it works similarly to how different suppliers offer different tariff costs generally. Overnight rates work as they are off peak and therefore lower demand for what is available on the grid so therefore can be cheaper. There is still one cost of wholesale sources but the demand varies throughout the day.

@Monty - We as a supplier don’t set the ‘wind price’. As I explained earlier and in the blog linked above, Bulbs costs are linked to wholesale. Wholesale costs are a market covering renewables and fossil fuels so prices across the board are affected. There were lots of things are behind the increases- Global weather contributed to low gas storage levels, issues with supplies of gas from Russia, and the global pandemic.

Other suppliers have fixed tariffs which work differently, we don’t have that at the moment which means our costs adjust in line with this whole sale price. We need much more investment in renewables in order to benefit from lower cost in the long run.

There are different ways to buy this renewable electricity- every unit of electricity we supply can be traced back to a renewable source. We partner with generators across the UK to directly purchase their electricity and we buy energy on the wholesale market with renewable energy certificates to match.

We’re going round in circles here.

Unless the sun and the wind cost more than they did previously, where does the difference between the cost of green energy and the wholesale price charged go?

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We are told the cost of renewables is linked to the cost of wholesale electricity. Why is that?
What is the point of driving us to become green if we are still chained to fossil fuels in this way?
A really innovative green energy company should be breaking these ties completely, or is it just a neat way to continue to pillage the bank accounts of your progressive customers?

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So, all of the companies have got together and decided to pin prices to the most expensive form of their product and dress it up as a natural and sensible thing to do. Isn’t that what a Cartel would do? It does sound like an artificial inflation of prices for no apparent good reason other than profit.

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