Fossil gas responsible for 80% of UK electricity price increase over the last 12 months
19 July 2022
New analysis by energy think tank Ember reveals that the skyrocketing price of fossil gas is responsible for 80% of the increase in UK wholesale electricity prices over the period July 2021 to June 2022.
Compared with the previous 12 month period, wholesale power prices have more than tripled and so has the cost of generating electricity from gas plants.
Monthly average UK wholesale electricity prices surged by almost £120/MWh – from £55/MWh in the previous period to £171/MWh. The cost of fossil gas was responsible for £93/MWh (80%) of this spike.
Sarah Brown Senior Energy and Climate Analyst, EmberThe UK energy crisis is a fossil gas crisis. Luckily, the solutions are readily available: more wind turbines and solar panels. Every new domestic wind and solar project will lower electricity prices and ease the grip of volatile global gas prices.
Skyrocketing wholesale electricity prices are squeezing households and businesses, with more pain coming in October when the energy price cap will increase yet again. Despite claims by a small group of Conservative MPs in the ‘Net Zero Scrutiny Group’, rising energy costs have almost nothing to do with green subsidies or the price of carbon allowances. The reason is soaring fossil gas prices.
The UK remains heavily reliant on fossil gas for its electricity. In 2021, the UK generated 40% of its electricity from gas plants. From December 2020 to December 2021, the cost of generating electricity from a combined cycle gas power plant (CCGT) surged from £48/MWh to £227/MWh.
Sarah Brown Senior Energy and Climate Analyst, EmberThe UK’s reliance on fossil gas is punishing ordinary people. The incoming prime minister should be jumping at the chance to boost the UK’s commitment to a thriving renewables industry and build a cleaner, cheaper, more secure electricity system.
Whilst the cost of fossil fuels continues to skyrocket, the UK held a record breaking renewables auction on 7 July, which secured 11 GW of clean energy at the lowest wind and solar prices seen so far.
Kwasi Kwarteng Secretary of State for Business, Energy and Industrial Strategy of United KingdomEye-watering gas prices are hitting consumers across Europe. The more cheap, clean power we generate within our own borders, the better protected we will be from volatile gas prices that are pushing up bills.