By Isle of Wight Observer
The cost of energy has become a big concern. The market for power is extremely volatile and recent price spikes in international markets have had a direct bearing on what we, as consumers, have to pay. This volatility is totally driven by the cost of gas on international markets, from which we in the UK have no protection. Every last drop we extract from the North Sea will be sold into this market at prices that are way above the cost of production. We need look no further than the recent profit announcements from the oil majors to see where all the money goes.
But power generated from renewable energy is not sold on international markets. It is sold nationally on the UK’s wholesale electricity market. The price of power from renewable sources (primarily wind and solar energy in the UK) is stable and, while the output does vary from day to day, the total contribution is rapidly increasing from one year to the next. Back in 2013, renewable sources provided just 15% of our electricity (about the same as nuclear power) while, in 2022, wind power alone provided 27%, with 11% coming from other renewable sources. On occasion, 80% of our electricity has come from a mix of wind and solar power.
The cost of power from renewable sources varies with the type of technology and the age of the project. But one thing is for certain – the long term trend is for costs to steadily reduce. Back in 1992, my then company built one of the first wind energy projects in the UK, we were paid a heavily subsidised price. Yet today, large offshore wind projects and large scale solar farms are able to sell their power with no subsidy, at or below the long term market prices.
And here lies the key to keeping electricity prices down. The more new, low-cost renewable energy which is built, the more low-cost power which will come onto the market, potentially crowding out expensive, volatile power from gas.
And what applies at a national level can also apply more locally, with the added advantage of profits flowing to local people rather than distant investors. Community energy – renewable generation, which is owned by community spirited organisations such as Wight Community Energy here on the Island – can generate energy at costs below market prices, thus producing financial surpluses to be spent locally, for local community benefit.
While present regulation prohibits us from directly selling our power to local consumers, the signs are that this will change. We will then move into a world where local people own and control local power generation, selling the power locally and using financial surpluses for local community benefit.
Wight Community Energy intends to be at the heart of this transition, and we are in the process of raising new share capital to take us in to that future. I hope that you will consider joining us. You can find full details at iow.life/wceshares.