Originally Posted by BobtheTrain
Originally Posted by Hamwich
So the power where you live is exactly the same mix of renewables, nuclear, and fossil power as everywhere else in the UK. which on average over the year is roughly 40% fossil, 30% renewables, 30% Other (nukes etc).

So how do some energy suppliers say that they are Green?


The suppliers have to essentially do two things:

1. Figure out how much electricity their customers have used and bill them for it

2. Purchase the correct amount of electricity on the wholesale energy market to cover that amount

Each generating company will sell their electricity on the wholesale market, each type of electricity has a different price, that price being driven by supply and demand factors. A 'deep green' supply company like Ecotricity will only ever buy renewable power on the market. As a result, when supply is short then prices get very high - which is why their power is very expensive, I pay 40p/KWh. Other less committed green suppliers will have a policy of buying renewable power when they can, but will buy nuclear and even fossil sourced power when they have to. The actual energy mix will be on your bill.

In theory, as more and more people demand green energy, the demand for it will encourage more generating companies to provide it, and advances in technology will reduce the production cost - which is why we are seeing the development of huge offshore wind farms to provide it. So the role of fossil generation will fade away in response to customer demand and government incentives.

Because we are still extremely dependent on natural gas (this is way over 90% of all our fossil generation), the wholesale price of gas is a very strong driver of the average wholesale price, which is why we are seeing generally increasing prices for the consumer as gas becomes harder to get hold of.

Electricity prices on the wholesale market vary on a half-hourly level. Prices for power in high-demand periods reach truly astronomic levels at times, which is why wise supply companies buy power ahead of time to hedge their risk of exposure to fluctuating prices. Often months or seasons ahead. Obvs the earlier you buy it the cheaper it is as it gives the generators security of supply, their 'order books' are filled up. Cheapskate energy suppliers have not bothered to do this, depending instead on generally low prices for wholesale power, which is why loads of them went bust when the prices went up and they hadn't got supply contracts already in place.


Tim H.
1986 4/4 VVTi Sport, 2002 LR Defender, 2022 Mini Cooper SE