[HN Gopher] Q&A: New UK onshore wind and solar is '50% cheaper' ...
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Q&A: New UK onshore wind and solar is '50% cheaper' than new gas
Author : DamonHD
Score : 25 points
Date : 2026-02-11 21:09 UTC (1 hours ago)
(HTM) web link (www.carbonbrief.org)
(TXT) w3m dump (www.carbonbrief.org)
| guidedlight wrote:
| Doesn't gas generators set the market price 98% of the time in
| the UK?
|
| They need to fix their market pricing mechanism before the public
| benefit from cheaper renewable energy sources.
| jl6 wrote:
| It is important to realise that the current pricing mechanism
| is not an accident, and has some non-obvious benefits that need
| to be weighed against the obvious drawbacks. Clearly other
| mechanisms exist, which might solve the obvious drawbacks, but
| it is a choice of tradeoffs rather than a simple fix.
| mjw1007 wrote:
| Not any more, according to this article you're commenting on,
| no.
| NVHacker wrote:
| If you are wondering why the air quotes around "50% cheaper",
| it's because the price of electricity is set based on the price
| of gas. Crazy, right ? https://www.greeniow.org.uk/why-uk-
| electricity-prices-are-ti...
| triceratops wrote:
| It sounds like a crazy system. But wouldn't it also make
| deploying renewables there wildly profitable? Sunlight is free
| but you get paid like you burned natural gas.
| blibble wrote:
| that is the idea
|
| but under the cfd mechanism the treasury takes the excess
| over the strike price
| Epa095 wrote:
| That's just marginal pricing, which is the pricing in many
| (most?) markets.
|
| It just means that the price is determined by the price where
| the demand curve crosses the supply curve.
| triceratops wrote:
| > That's just marginal pricing, which is the pricing in many
| (most?) markets.
|
| I don't pay Johnnie Walker Blue Label prices for Jim Beam.
| Epa095 wrote:
| But with power the final product it's the same, the
| production method is different.
|
| So it's more like this: I make a product for 5 and sell it
| for 6. My production facility is maxed, but there is still
| much demand. So I (or someone else) sets up another
| factory, making them for 8 and selling for 9 (there is
| demand enough). Now, will I keep selling at 6? No, my
| prices will also increase (to maximise my profit), and the
| final price will be where the demand curve crosses the
| supply curve.
|
| I am wind, the new one is gass. We both make the same
| product, we sell at the same price, but I make a larger
| profit.
| Dylan16807 wrote:
| You get simple supply and demand with uniform prices in
| commodity markets but I'm doubtful that's most markets in
| general.
| triceratops wrote:
| Makes sense. But in a normally functioning market,
| production at 5 will rapidly ramp up to capture the
| excess profits to be made by selling at 8. Eventually
| this will drive everyone's prices to 6 and the ones stuck
| producing at 7 (natural gas) will be driven out of
| business.
|
| According to this comment
| https://news.ycombinator.com/item?id=46982118 there's
| additional "treasury" (is that the tax authority in the
| UK?) weirdness that prevents renewables from capturing
| these profits.
| fsh wrote:
| This is highly misleadling. Nobody is setting the price, it is
| determined by an open market. This naturally drives it towards
| the price of the cheapest energy source with available capacity
| (often natural gas). It would be irrational to sell electricity
| for cheaper than this. If more batteries get deployed, the
| price will more often get set by battery storage instead.
| monsecchris wrote:
| Gas can produce enormous amounts of power at short notice 100% of
| the time.
|
| The CFDs are locked in at persistently high prices for decades.
| All these actions will increase costs to customers.
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(page generated 2026-02-11 23:00 UTC)