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Has renewable energy reduced our dependence on natural gas?

March 30, 2022

By Paul Homewood


Has renewable energy reduced our dependence on natural gas?

It is a question often posed lately, with the corollary that if we had built more renewable capacity we would now be much better off and less at the mercy of high gas prices.

The graph below from the BEIS shows that the increase in renewable energy has been tiny in the last decade, and consequently has had little effect on gas consumption.

While total energy consumption has declined, most of this has impacted coal use.



In fact in terms of electricity, the share of gas generation has risen from 29% to 44% between 2015 and 2019, suggesting that intermittent wind and solar power have increased the reliance on gas, rather than reducing it.


As for being “better off”, we need to take account of the cost of subsidies paid out over the years for renewables already.

Let us suppose, for instance, that we had double the wind capacity we have now. We currently have 25 GW of wind power, split 14 GW for onshore and 11 GW offshore. Let us assume that we instead had 50 GW, split 28 GW onshore and 22 GW offshore.

Onshore wind is mainly subsidised via ROCs, at an effective rate of £55/MWh. The extra 14 GW of new build would typically generate 35 TWh, meaning an annual subsidy of £1.9 billion.

An extra 11 GW of offshore would generate about 41 TWh. Average CfD prices for offshore wind installed in the last few years are around £140/MWh. Up to 2020, this would mean a subsidy of about £4.1 billion a year.

In other words, totalling on and offshore, an extra £6.0 billion would have been paid out a year. Supposing we had added this extra capacity evenly over the last ten years, that extra subsidy would have amounted to £30 billion. This of course excludes indirect subsidies, such as grid balancing costs.

And how much would we be saving now by avoiding expensive gas? Not as much as you think, I suspect.

CfD offshore generators are typically currently returning £60/MWh to consumers, which works out at £2.5 billion a year. However, onshore operators would still be getting the full market price of around £200/MWh in addition to their ROCs. Consumers therefore would be continue to be £1.9 billion worse off as a result.

Overall the CfDs and ROCs together would leave consumers just £600 million better off. At this rate, it would take fifty years to get back that £30 billion we have already stumped up!!

By the Way!

I’ve been meaning to publish this chart I came across a while back. It compares wholesale electricity prices across Europe:


There are various conspiracy theories going round about why our energy prices in the UK are so high. As the chart shows, however, wholesale prices are very similar across most of Europe, clearly indicating that this is an international problem, and not something cooked up by the wicked energy companies.

There are some interesting exceptions.

Norway, Finland and Sweden are all heavily reliant on hydro and/or nuclear, and are therefore relatively unaffected by swings in gas prices. As such, they appear to be cut off from the EU system.

Similarly with Bulgaria, where electricity prices are half those of neighbouring Romania.

Remember that these are wholesale prices. Retail prices are of course affected by all of the subsidies paid out to renewables, along with grid balancing costs and so on.

  1. catweazle666 permalink
    March 30, 2022 7:40 pm

    No amount of “Renewable” – better described as “Unreliable” – energy can ever reduce our dependence on spinning thermal generation – be it coal, gas or nuclear – because every last milliwatt of “Unreliable” generation must be backed by a milliwatt of instantly available constant frequency – for grid stability – generation.
    Basically, there are two types of electricity generation, base load and dispatchable, and “Unreliables” are incapable of producing either.

    • Chris Morris permalink
      March 31, 2022 8:26 pm

      The unreliables actually increase the dependence on fossil fuel generators. But the fuel generators have to be run in the most inefficient way – running at part load and constantly ramping up and down. Rather than look at weekly or even daily generation, one has to look at the minute by minute data, where the grid has to balance two independent variables, the load and the output from the unreliables. The bits to really focus in on are when there is a sudden change in the output of the windfarms, either up or down, and see how the GTs have to respond. Dinorwig would also need to be in the mix as to how it was smoothing the grid.
      Of course there is also the invisible benefit from the thermals of grid inertia, which can’t be directly plotted, but which places like South Australia learned is very important.

      • Ray Sanders permalink
        March 31, 2022 8:45 pm

        Funnily I just posted on the FF v Renewable energy thread about the lunacy in South Australia installing renewables + big battery + synchronous condensers all to do what one unit did before and they still have to have it as standby!

  2. jimlemaistre permalink
    March 30, 2022 7:43 pm

    Possibly to a small extent in the west . . . However . . . Where they are built . . . and Globally
    Absolutely NOT . . .

    Solar Panels, the main problem with them is the Heat and the chemicals needed during processing using the ‘Czochralski Method’ turning all that silicate into the silicon used to make these panels. Producing pure Silicon requires the processing of raw silicate. Including the 1,425o C Heat required to melt the quartz crystals, usually by burning coking coal or gas. The Glass covers are made by heating sand, soda ash and limestone to the incredibly high temperature of 1,700o C with gas. Then they are Re-Heated to 450o for tempering. What about the CO2 going up the chimneys where that quartz or that glass was melted? Then, silica, we use hydrochloric acid, Sulfuric Acid, Nitric Acid, Hydrogen Fluoride, Trichloroethane, and Acetone. Do we recycle that waste? What happens to all the ‘left-overs’ from using these highly toxic chemicals? Solar Panels need gallium-arsenide, copper-indium, gallium-diselenide, and cadmium-telluride. All of which are highly toxic even radioactive. Furthermore, Silicon dust is a hazard to workers where silicone is made and where it used. Oh, and last, the Silicone infused Solar Panels cannot, as yet, be recycled. What happens to all the by-products from making and processing all these chemicals? Furthermore, it has been suggested that the energy input to build solar panels exceeds their energy output in their productive lifetime . . .

    From . . .

  3. David permalink
    March 30, 2022 9:47 pm

    Jim you are still blogging these temperatures showing the degree symbol as a zero!!

    • T Walker permalink
      March 30, 2022 10:52 pm

      Yes Jim best to put deg C.

      But thanks for the useful info.

      • jimlemaistre permalink
        March 30, 2022 11:29 pm

        Again David goon catch . . Oops . . .

  4. Gordon Hughes permalink
    March 30, 2022 9:56 pm


    Your final chart is rather misleading for a couple of reasons. First, it is essential to weight day-ahead prices by demand or type of production depending on what you want to examine. Second, demand-weighted day-ahead prices in the UK are, over the long run, substantially higher than in countries such as Germany, Netherlands, Belgium & France – and there are systematic differences between these countries.

    I have analysed hourly data from power exchanges since 2010 and especially from 2015 to the present time. The average price differential between Western Europe and the GB market has remained high – and actually grew a lot in 2021 – notwithstanding the increase in interconnector capacity and much of the time it exceeds the charges for interconnector.

    You are correct that prices in Scandinavia and the Baltic region tend to be very low by GB standards – both because of hydro resources and limited transmission capacity. Conspiracy theories about price differences are silly. The real problem is that GB is absurdly dependent on imports of electricity because of a combination of reliance on renewables and a failure to invest in modern gas generation.

    Finally, gas prices are very similar in GB and Western Europe. That reinforces the point that it is the reliance on old and inefficient gas plants that lead to high prices in GB, especially when renewable output is low. More investment in wind capacity won’t change that by more than a small amount.

    • March 31, 2022 1:32 pm

      The real problem is that GB is absurdly dependent on imports of electricity

      I don’t doubt this is generally true, but oddly we’re exporting 1.6% of generation at the moment according to Gridwatch UK. Wind+solar is 42% of output — obviously sunny and breezy days can happen from time to time!

      • Ben Vorlich permalink
        March 31, 2022 2:04 pm

        Wind and Gas are roughly equal at 28%, and Nuclear amd Solar are also equal. It’s sunny/snowy, windy and cold in Derby

    • Matt Dalby permalink
      March 31, 2022 9:58 pm

      The first chart also needs a bit of explanation. The large drop in energy demand in 2020 was due to the sharp decline in economic activity due to lockdown. This means that it “should” be temporary, however with inflation at 8% and rising and a possible recession on the way I’m not sure how long it’ll be before energy demand returns to anything close to 2019 levels.

    • It doesn't add up... permalink
      April 1, 2022 12:48 am

      This chart is quite helpful in showing the trends at monthly resolution, which begins to capture individual periods of high or low wind output as well as revealing seasonal behaviours.

      It shows that really only coal was capable of substituting for gas. Historically coal burn was increased over the winter, freeing gas for domestic consumption in boilers and stoves and helping to meet the seasonal demand. After Fukushima sent LNG prices into orbit we were still able to cut back on gas generation and gas imports in consequence by coal substitution. But once the coal capacity was closed we lost that flexibility. It’s clear that coal made way for renewables, and that we are now constrained for CCGT capacity, giving rise to increased imports as we hit a more general capacity crunch which is the real driver for our high prices, which are at a premium to marginal cost of CCGT generation whenever supply is tight. We have in fact reached the point at which demand is priced out of the market in order to secure balance – rationing by price.

  5. David Wojick permalink
    March 30, 2022 10:55 pm

    Keep in mind that you need a reserve of reliable generation and fuel for all the times wind and solar do not perform. The reserve generation does not go down as wind and solar increase, plus the fuel reserve actually goes up because the loss of wind and solar is bigger.

    • David Wojick permalink
      March 31, 2022 12:17 am

      Put another way, it was not low wind that caused the European energy crisis. It was a low wind forecast that was way too high. To simplify, if you have a wind plus gas system then you need a lot of gas just sitting there in storage waiting for the occasional very low wind. A lot of it sits there year after year doing nothing and the same with some of the backup gas generation. All this unused stuff is part of the cost of wind. You should probably plan around the estimated 100 year low wind.

      Of course wind plus gas rules out net zero. That is a different issue entirely.

  6. March 30, 2022 11:54 pm

    Remember 10 years ago when the renewable guys said they needed certainty? If things work in the UK like they do in the USA, legislation for introduction of renewable energy got written by the people in the industry and then rubber stamped by the legislature or parliament. I suspect those rules were written to guarantee profitability of the renewable energy suppliers, no matter the vagaries of the weather. I also suspect along the way they learned how to game the system so that when generation capacity is in short supply, the price skyrockets. So they lobby all they can to make gas scarce forcing up the price of power. This is what Enron did in California although they did it by putting generating capacity into maintenance taking it offline. So rather than maintenance, they simply support constriction of the supply of natural gas fuel through legislation.

  7. Gerry, England permalink
    March 31, 2022 9:51 am

    Finally, today Shell Energy has answered my question as to why my standing charge rockets by 73% tomorrow.

    National Grid has increased its charges by 39% – that will be meeting the huge increase in grid stability costs as well as being forced to connect far flung windmills to the grid.

    And the ill-thought out government energy policy and management that saw lots of small companies set up to supply and then fail over the last 6 months or so when they couldn’t cover their costs has added a charge of £68. They say that 29 companies folded.

    • Gamecock permalink
      March 31, 2022 11:29 am

      Being backup to renewables isn’t much of a business model. Small fry are out. Better capitalized plants are still in, but for how long?

  8. Mack permalink
    March 31, 2022 2:28 pm

    O/T I note that the oil and gas regulator has today given Cuadrilla a reprieve on capping their fracking wells. One would like to think that an outbreak of common sense has suddenly occurred at the highest levels of government. Unfortunately, as the moratorium on fracking hasn’t been lifted, I suspect that this decision is merely a PR exercise to deflect flak whilst energy prices remain high, only to be overturned once Putin starts behaving himself again.

  9. ThinkingScientist permalink
    March 31, 2022 5:00 pm

    The primary energy source for our national grid is gas.

    Over the period 2010 to 2013 domestic gas prices were fairly constant, then they fell consistently until around mid 2020. On average the price declined by at least 25%.

    Over the same period electricity prices rose steadily, increasing about 60% from 2010 to 2020. the price in 2010 was about 14p per KWh, now its around 23p.

    So if gas got cheaper and electricity got more expensive what changed? Installed renewable capcity of course. That increased from 10300 to 77200 Tw (capacity mind you!) over the same period ie 7-fold increase.

    So if renewables are going up and they are cheaper than fossil fuels, why isn’t electricity getting cheaper over the period 2010 – 2020?

    Its rhetorical, of course.

    • It doesn't add up... permalink
      April 1, 2022 1:14 am

      Talking of primary energy….

      I think this chart shows why we are going to continue to need gas for a good while yet: we used to manage some of our energy demand seasonality though coal, but gas has been the fuel that has really managed to offer the flexibility required. There is no sign that renewables will be capable of handling the seasonal element, and even less that there is a storage solution for renewables.

      • ThinkingScientist permalink
        April 2, 2022 8:26 am

        I am still of the opinion that burning gas for power generation is foolish. Far better to burn coal, which has minimal practical utility other than power generation where it excels and is very easy to stockpile.

        Gas is incredibly clean burning and so efficient for heating and cooking. LPG is also ideal for city vehicles – again incredibly clean burning but also its cost effective to convert petrol vehicles to LPG, a practical solution all round if improving city air quality is the goal. That used to be an affordable government program a decade or more ago.

        Instead, as ever, government doesn’t pick winners, its picks the most impractical and expensive option which is going to end up as a white elephant. Or the lights are going to go out. Or both.

      • jimlemaistre permalink
        April 2, 2022 4:04 pm

        Burn coal, yes . . . But first install scrubbers, electrostatic precipitators and Nitrogen Oxide burners to remove over 90% of the foul effluent !! See pages 6 & 7 . . .

        Governments of the world are advocating these ‘Green Technologies’ for what we DO NOT SEE . . . The ‘Carbon Allowances’ that work like ‘Permission Slips’ for Excess Polluters already in our midst . . . This is the ‘Technical Nightmare’ caused by ‘Net Zero’ international agreements. Public policies are NOT about ‘Clean Energy’ . . . they are about meeting the ‘APPEARANCES’ of Net Zero in each country. The Scam of ‘Carbon Trading’ . . .

  10. Gamecock permalink
    March 31, 2022 5:45 pm

    ‘Has renewable energy reduced our dependence on natural gas?’

    No, you are still dependent.

    That ‘Chart 5.4 shares of electricity generation by fuel’ is deceptive: renewable generation is given priority on the grid, artificially giving them more business. In a free market, their share is likely to be way less.

    Additionally, per annum is the wrong perspective on electricity generation. A two-week outage of wind power doesn’t show up.

  11. March 31, 2022 6:26 pm

    This could start another scramble for gas supplies, from tomorrow if not sooner…

    Putin to stop gas exports to ‘unfriendly’ nations unless they pay in Russian rubles
    Thursday 31 March 2022, 5:46pm

    “Unfriendly countries” must start paying for Russian gas in rubles, or their supplies will be cut, Moscow has said.

    The decree, published on Thursday by state media, came a day after the leaders of Italy and Germany said they received assurances from President Vladimir Putin.

    Mr Putin talked tougher, saying that starting from Friday, Russia will start accepting ruble payments for Western countries that imposed sanctions over its invasion of Ukraine. He said contracts will be stopped if buyers don’t sign up to the new conditions, which include opening ruble accounts in Russian banks.
    – – –
    Germany for one has a problem here.

  12. Mikehig permalink
    March 31, 2022 7:31 pm

    Your analysis assumes that all onshore windpower would receive ROCs but wouldn’t any projects after about 2015 have switched over to CfDs as happened with offshore wind?

  13. March 31, 2022 9:54 pm

    It’d be instructive to calculate the energy storage needed to supply us over the previous five low-wind days. Assuming that the storage would need to be equal to the total generated from fossil fuels over the five days. My guesstimate (and it’s no more than that) is about 3600GWh.

    • April 1, 2022 2:28 pm

      This very point has been addressed very recently on Worth a read.

      • April 2, 2022 1:07 am

        I’m quite pleased about that, I guessed that average generation from fossil fuels is 30GW also !

      • It doesn't add up... permalink
        April 2, 2022 3:55 pm

        Thanks for the link. I have added substantially to the debate in the comments.

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