Debunking the Cheap Renewables Myth
We keep getting told that wind and solar renewables are cheap, yet our bills keep going up. So, what's going on?
DAVID TURVER
MAY 15, 2024
Last week, I decided to write a Twitter/X post to summarise how much we are paying for renewables. It got far more traction than I anticipated, so I thought it would be helpful to convert it and extend it a little to make a bonus article on Substack that can act as a succinct response to all those who still insist on claiming renewables are cheap.
In the UK, renewables are subsidised by three different schemes. Feed-in-Tariffs (FiTs) fund mostly solar power. The latest report for 2022-23 shows the scheme cost over £1.7bn and average total payment was ~£193/MWh, about 3X the current cost of gas-fired power at around £65/MWh (see Figure A).
Contracts for Difference (CfDs) fund a range of technologies, but most of the subsidy goes to offshore wind. Latest data from the LCCC shows the subsidy per MWh fell dramatically during the energy crisis, but is now back at £95/MWh for offshore wind, £73/MWh onshore and £60/MWh for solar. April 2024 was a record month for overall subsidies with £268m paid out with average strike prices at £146/MWh for offshore wind, £113/MWh for onshore and £110/MWh for solar power (See Figure B).
https://davidturver.substack.com/p/debunking-cheap-renewables-myth
