Wholesale energy prices and their effect on prices charged by renewable suppliers like Bulb

Having just seen the latest blog from Bulb on the energy market update and the statement that prices may have to rise again it got me thinking…again; what needs to be done to change the system so that people who have made the decision to move to renewable supplies are not affected by the wholesale price changes which include all sources, dirty or clean?

It doesn’t seem right that energy supplied from renewable sources have their prices dictated by things like oil and gas cost which have so many other factors that affect the price.

Is it a case of pestering our MPs?

Hi @Yorkie71

It’s a great point, does seem strange that renewable prices are correlated/driven by non-renewable price drivers.

It does work both ways though, renewable electricity generation can cause huge price decreases for overall electricity prices (mostly on the short term prices) due to:

  1. High forecast windy days
  2. Days with high solar generation
  3. More future supply capacity of renewable energy, so plans for a huge wind farm to be online in 2020 may cause prices for Winter 2020 to be lower

One way that renewable generation can be excluded from exterior price influences is by the energy company owning the generation equipment. This is called Vertical Integration: https://www.energyvortex.com/energydictionary/vertical_integration.html

I think Dieter Helm is going to cover this a lot better than I can in this post. Here’s some afternoon reading for you on the topic you brought up: http://www.dieterhelm.co.uk/energy/energy/what-future-for-vertically-integrated-energy-companies/

We used to have a rule about only sending links if you have read the whole article, I admit I broke the rule here but there are plenty of members to get back today.