Comment by shadowgovt
8 hours ago
General question because I'm ignorant of UK internal politics: are the Isles' energy prices just generally higher? There aren't any large sources of fossil fuels or natural gas that aren't offshore, right? And the coal got significantly used up by hundreds upon hundreds of years of mining.
I'm wondering if really, the causality is reversed: it's not that the renewables make energy expensive in the UK, it's that energy is expensive in the UK, which incentivized construction of a lot of renewables, because they're an overall cheaper source of energy long-term since you don't have to either pay your neighbors to import them or build rigs in the saltwater ocean?
Yes, there are massive onshore reserves. The Tory government that has been accused on here of pimping the environment immediately banned all exploration.
There is are also two relatively big offshore fields that were taken to a very late stage of development and then stopped because of opposition by local government.
I would research exactly how big the gap is with other countries (and, remember, retail price is subsidised). The Cameron government made the active decision to order companies to shut down power plants with no plans for replacement. To be clear, nothing about energy...this is jut electricity provision. There was no economic incentive, that is why tens of billions were given to energy companies to produce non-economic, expensive power with guaranteed payments.
There was some research done last year iirc: if the UK paid zero for gas, the price of electricity would not stop rising because of the government intervention.
It is reasonable that you assume something rational must be going on here. But that model does not apply in the UK. Politics took over from economics a long time ago.
There are still large untapped known fields in the North Sea within UK waters adjacent to the same that Norway are still profitably using. There is also vast swathes of UK waters that are unexplored, and are currently artificially expensive to do so due to UK taxation on fossil fuel companies.
The price of petrol at the pump is at least 50% Government direct tax - fuel duty, VAT (which multiplies the duty value - very cheeky). Then the other parts - wholesale price, retailer profit, delivery costs, have their tax implicitly priced into that. That probably makes the overall Government take something like 70% of the price you pay.
As for coal, there's apparently about 600 million tons of accessible usable coal left, which at current UK usage is good for quite a few decades if not more.