Our energy debate needs to sober up.
Gas is going to have an enduring role in our electricity system, but we can’t continue to believe narratives around it that are plainly not true.
Gas prices are increasingly internationalised. When the post-Ukraine-invasion shock happened, it didn’t matter that only c4% of the UK’s gas was from Russian imports - we felt 100% of the price rises.
Likewise, LNG from Qatar is only c2% of UK gas imports, but look at what’s going to happen to billpayers now.
Some people have spent the last few months pretending gas price stability is the norm, and prices will only fall – this is palpably untrue to all of us watching the news.
Similarly, lets be honest, the North Sea provides (and will only ever provide) a tiny proportion of global gas production – the Norwegians we talk about so often are only c3%.
I'm not saying 'don't drill' - but we have to understand that even if every nation around the North Sea put their heart and soul into drilling for gas (parking the clear evidence about it being a declining basin) it is not going to move the needle or give us any control over gas prices. We do not have that power.
We need to:
👇Drive down the cost of all energy infrastructure. We need a Fingleton Review for wind, solar, grid, everything.
⚡️Work out the optimum energy mix from there – but with an honest conversation about gas, including:
🕐The fact there are now huge waiting times for new gas turbines (out to 2030).
💵That new gas plants now cost £147 per MWh.
📈And that price shocks are going to keep happening.
Two reasons why today is going to be frustrating for people in the energy sector.
1⃣Misleading/hyperbolic claims like this👇which are largely born from the complexity of our electricity system.
The CfD price is not the same thing as the price consumers pay, because of the way both CfD’s and the ‘pay as clear’ market works. You have to look at:
⚡️The benefits wind farms have in driving down the wholesale price of electricity (this is part often ignored, but saves us all billions)
💵CfD top ups and paybacks, &
🔋All system costs
This is why studies suggest a strike price of under £94 per MWh is net good for billpayers. The UK agreed £91 with wind farm developers today.
If there are any journalists who want someone to talk them through this – call Ofgem – the body set up to protect billpayers. I’m sure they’ll take the time to explain.
2⃣Second, and main, reason I’m frustrated.
We know:
💷That wind energy can be incredibly cheap – we were paying £54 per MWh (current prices) for offshore wind just a few years ago (before the cost increases effecting all infrastructure).
🌍That we are one of the windiest countries in the world.
⚡️That we need more electricity in the years to come. Ideally energy abundance.
🌊That (we can contest how much) there is only a finite amount of gas left in the North Sea - once that goes, we are a full importer of international gas.
So we will definitely, and obviously, need to build new wind farms (as well as nuclear etc) in the decades to come.
If this is the case – we need to focus on getting the costs of wind, and all energy infrastructure, down. As a long term, strategic priority for the UK.
If we had half the number of people coming up with solutions to help lower the costs of wind (e.g. planning and regulation reforms) and helping advocate for them as we do people pretending new gas isn’t very (and transparently, just Google for 2 seconds) expensive to build and price volatile – our country would be in a much better state.
⚡️ Our room was packed for the ‘Power struggles: How can the Conservatives beat Reform on energy policy’ panel.
🗣️ Thank you to @SWDevonRebecca, @andy4wm, @SCP_Hughes, @edhodgsoned, and @DavidsHickling.
If you missed it, you can find the highlights below 👇
Looking forward to participating in this panel session at #CPC24 this afternoon - rural communities can be the green powerhouses of the energy transition - bringing prosperity alongside securing the UK's energy security!
🌊⛴️The offshore converter platform for our flagship Sofia Offshore Wind Farm has arrived on site in the North Sea!
The jacket foundation is in position and we are now pushing on to complete the key milestone of installing the massive topside structure. 🏗️
A pleasure to welcome the new Secretary of State to Little Cheyne Court yesterday - who has hit the ground running on the energy front - onshore wind ban removed a big statement of intent from the new Govt!
On Monday, the government lifted the de facto ban on onshore wind farms across England.
With more wind farms like Little Cheyne Court, we will be on our way to doubling onshore wind energy by 2030.
More from Energy Secretary, @Ed_Miliband 👇
Rishi Sunak announces new deal between Masdar and RWE to "jointly invest up to £11bn into the UK's new windfarm at Dogger Bank"
Follow COP28 live https://t.co/EIOCBCgw6k
One of the most important issues facing RWE's clean energy projects in the UK - plugging them in!
Great to be present at #NSPath2Power today talking about this and Labour's Clean Energy Superpower Mission.
“We need to rewire Britain”. @AndyBurnhamGM speaking of the urgent need for real devolution (rather than Tory sloganeering). RWE’s @DavidsHickling wants to literally rewire Britain to ensure Labour is prepared for being a green energy superpower #NSPath2Power#ClimateCrisis
📌Reminder: How Can Labour Make the UK A Clean Energy Superpower? #LabEC23
Today 18:45 at #Lab23@serauk are discussing with @ed_miliband, Prof. Martin Freer (@EnergyRA), @SarahBoyack future power!
You can join us at the Labour Environment Hub along the water front 🌅
💡How Can Labour Make the UK 'A Clean Energy Superpower?🔋
Sunday #Lab23 us and @RWE_UK are discussing with @ed_miliband, Prof. Martin Freer (@EnergyRA), @SarahBoyack future power!
Energy security is a growing concern so securing a clean energy future will be essential #LabEC23
⏰ 10 MINUTES TO GO ⏰
Building cheap renewables will lower people's bills & power economic growth. But how can we ensure local communities' concerns are addressed?
Join us at #CPC23 with @RWE_UK & @Lee4NED, @vickyford, @ProagriLtd, Cathal Hennessy & @lynseyajones.
#CENatCPC
Following CfD AR5, which was successful for onshore wind & solar, but failed to procure any offshore wind, RWE’s Senior Regulatory Affairs Manager, James Brabben, sets out RWE’s thoughts for reform and how to avoid a repeat failure at CfD AR6.
https://t.co/inl4I86Trg
Important contribution to the climate 'backsliding' conversation this morning - backed up with evidence - showing that the public want to see continued green investment.
Great piece👇
After days of debate about public attitudes to 'green policies' - new polling shows watering down net zero & green growth ambition couldn't be further from the public mood - and most notably, what swing voters want
🧵with extra analysis
https://t.co/9CUwJadZov
@forwardnotback Precisely - so if sent it has to have been ordered in the capacity as SoS - wonder what Section 5 of the Ministerial Code makes of directing officials to send an invoice to the LP... My guess - no (serious) invoice will be received!
@forwardnotback If a serious, formal invoice is indeed received then, given the damage was to a Government building, the (party political) direction to send it to the Labour Party presumably can only have been made in the capacity as Secretary of State? 👀
It's been really exciting to be involved in how @RWE_UK is responding to the decarbonisation challenge for our conventional generation fleet - which will continue to play an important role in the UK's power system up to 2035 and beyond. #TeamRWE
RWE announces development proposals for 3 new carbon capture projects in the UK.
With up to 4.7GW of decarbonised generation capacity - enough to power up to 8.1 million average UK homes, while capturing 11 million tonnes of CO2 per year.
Full story: https://t.co/gwcDdek8Mg
Delighted to host @UKGovScotland Minister @John2Win at our Douglas Water Hydro Station. RWE operates 15 hydro stations, 10 onshore and 1 offshore wind project(s) in Scotland. It's a key market & we plan to continue expanding our renewables portfolio there
https://t.co/wVTOFywAxI
Great talks with attendees at @WelshConserv Conference last weekend about our exciting clean energy investment plans in Wales – including visits from the Prime Minister & the Chancellor. Strong interest for the Celtic Sea opportunity and RWE’s Pembroke Net Zero Centre plans