Renewables and the Price of Fossil Gas

January 29, 2022

As the price of gas soars around the world, we’ll keep seeing blame pointed at the renewable transition.
It’s bogus, of course.

Jan Rosenow on Twitter:

The argument that low renewable electricity generation led to higher gas generation driving up gas prices is clearly false. In the UK in the months Sep-Nov 2021 compared to Sep-Nov 2020 we can observe: Gas generation.

There have been attempts to blame renewables for the massive surge in gas prices which in turn drove up electricity prices. The data simply does not support this.

The main drivers for the high electricity and gas prices are: – rapidly growing global gas demand post-COVID – low gas storage levels – gas supply constraints We @RegAssistProj made those points back in early November.

Regulatory Assistance Project (UK):

Analysis of the root causes of the electricity price ‘roller coaster’ shows that the best and most durable solution to alleviate the social and economic impact of volatile fossil fuel prices is tackling the demand for fossil gas. Reducing Europe’s appetite for this fuel requires prioritising energy efficiency, ensuring a massive rollout of solar and wind, electrifying end uses currently served by natural gas, and limiting the use of hydrogen to green hydrogen solutions devoted strictly to hard-to-reach applications.

European Union Agency for the Cooperation of Energy Regulators in its Preliminary Assessment of Europe’s high energy prices confirmed our analysis: “soaring gas price [is] driven by global demand and supply dynamics f[…] as a result of the global economic recovery from the Covid pandemic.”

The @IEA@fbirol could not be clearer too: “Unfortunately, we are once again seeing claims that volatility in gas and electricity markets is the result of the clean energy transition. These assertions are misleading to say the least.”

And of course there is also the geopolitical issue of Russia and limited gas supplies which were are down 40-50% year-on-year in the first two weeks of 2022 as @DrSimEvans points out.

The UK government understands this. @KwasiKwarteng@beisgovuk said it clearly: “The solution is obvious: we need to move to a home-grown, sovereign energy system where we can power our country through renewables.”

The answer is also to reduce energy consumption through better energy efficiency. We have done it before and can do it again.

Yet folks are trying to convince us that “look we use more gas because renewables don’t deliver” by sharing a snapshot of power generation on a day with little wind and solar on the system. That’s not the point. The point is that total gas use has gone down not up.

Almost half of UK gas demand is for heating buildings. Only 29% is for electricity generation. With gas-fired generation down compared to previous years it is hard to see how gas used for electricity could be a key driver of price rises.

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