Renewables are due to start paying back money to consumers this month, as the cost of producing energy from wind and solar drops well below the cost of energy bills. The figures on how much is cut from bills will be announced every quarter, with a small change growing into a more significant sum as the price cap rises in October and the new year.
It is estimated that renewables have already ‘saved’ consumers around £221 per household due to renewables supplying 29% of electricity rather than much more expensive gas.
Part of the green levy paid by consumers gives wind/solar energy producers a guaranteed price for their energy when they invest and build, but gas prices have driven up the cost of energy bills well beyond what was agreed with renewable energy producers. The result is a payback scheme that stops renewable energy companies making excess profits and puts a brake on bills. Unfortunately, there is no brake on the profits of gas producers and they still account for the bulk of the energy people use.
Green Party Baroness, Jenny Jones, said:
“Consumers are now getting a direct pay back from renewables and this will grow into a significant bonus in the new year. If only the UK had invested in more renewables earlier, then British people could have had a bigger cushion against the shock of rising gas energy prices. However, we should be grateful that renewables have at least slowed the rise of energy prices by a couple of hundred pounds a year.”
“The most immediate action we can take to reduce energy bills is to reinstate the programme of mass insulation that was cancelled by the David Cameron’s government when he said “cut the green crap”. That would start reducing bills this winter. In the medium term we need to issue another round of licences for renewables, as there is way more demand for investment than the government is allowing for. This is no time to restrict the growth of renewables, we should be getting them built as quickly as we can and acting to encourage new energy storage solutions.”
- The UK Onward report “How investing in renewables cuts energy bills.”
“In 2021, renewables were responsible for 29% of the electricity generation in the UK. This alone displaced around £6.1 billion worth of gas, equivalent to £221 of gas per household.”
Ministers have decided to authorise contracts for about 12GW of new renewable energy generation, to start construction this year, with much of it likely to come on stream before next autumn. However, the renewable energy industry estimates that about 17.4GW of projects have cleared planning permission and are “shovel-ready”