Graham Skeats #FBPPR🏴🇺🇦RE: https://social.coop/@jsbarretto/116289030605286406
And yet, the price of electricity is linked to the wholesale price of gas. 🤔😬😜
Joshua Barretto@GrahamSkeats On the one hand this is bad for consumers, but on the other it is a massive incentive for the building of new renewable infrastructure. For investors in solar farms, it's basically free money.
@jsbarretto is it though? Most renewable electricity generation in the UK operates under long-term contracts that guarantee a price per unit of electricity produced. These arrangements exist precisely because governments recognised that relying on volatile wholesale prices would not deliver the investment required to build renewable capacity.
@GrahamSkeats The agreed rates specified in those contracts are basely largely on the marginal rates typical for the energy market though, no? That aside, it's looking like the marginal market might have limited time left anyway, which is no bad thing.
@jsbarretto
Absurdly, it can be the government that profits from the higher prices paid to renewable producers over and above the price that the government has guaranteed them. That is a fact that no minister ever wants to acknowledge. In other words, the price that renewable producers receive is often not determined by the market in the first place.
Absurdly, it can be the government that profits from the higher prices paid to renewable producers over and above the price that the government has guaranteed them. That is a fact that no minister ever wants to acknowledge. In other words, the price that renewable producers receive is often not determined by the market in the first place.