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Electricity Pricing

Atualizado: 24 de abr. de 2023

Electricity prices augmented above the cost-of-living last year, and many countries came up with explanations. The United Kingdom blamed the lack of wind power to produce enough electricity to supply consumers.

Plans for floating wind energy projects off UK’s coastline get millions in funding boost. Eleven projects in total centered around floating wind technology. They are a step closer to fruition following a tranche of investment aimed at making the most of Britain’s windy coastlines.

The U.K. government said it would invest a total of £31.6 million (around $42.57 million) in the projects. In addition, over £30 million of cash is set to come from private industry.

In a statement, the government said the money would be used to “develop new technologies that will enable turbines to be located in the windiest parts around the UK’s coastline.”

However, according to Phil MacDonald and Sarah Brown from the company Ember, a new analysis revealed that the skyrocketing price of fossil gas was responsible for 85% of the increase in UK wholesale electricity prices in 2021. In just one year, wholesale electricity prices quadrupled and it became almost five times more expensive to generate electricity from gas plants.

Energy prices are spiking around the world, partly as demand returns as we emerge from the coronavirus pandemic. Europe is especially exposed due to its dependence on Russian gas. As long as the UK continues to rely on fossil gas, the country will remain exposed to the volatility of global fossil fuel prices.

The government has committed to a zero-carbon power sector by 2035, following the successful phase-out of coal with a phase-out of gas. But to meet UK climate targets, National Grid shows we need to have driven gas use down to less than 1% by the end of this decade. Fossil gas provided 40% of UK electricity in 2021, a figure that is slowly falling (in 2010 gas provided 46%). Wind and solar produced 25%.

The cheapest electricity is now the greenest electricity. Offshore wind, onshore wind, and solar are now effectively subsidy free. According to the latest renewable generation costs from IRENA, generating electricity from existing UK fossil gas power plants is three times more expensive than from new onshore wind and almost twice that from new solar. Even the levelized cost of electricity (LCOE) from new offshore wind is currently cheaper than generating electricity from fossil gas.

In Brazil there are many opinions about electricity price surges, however, the energy bill accumulated a high of 114% in 2021 according to CNNs report. It says the data is from the Brazilian Association of Energy Traders (Abraceel). According to the entity, residential electricity had an average annual increase of 16.3% between 2015 and 2021.

Additionally, the National Electric Energy Agency (Aneel) announced late last year that it estimated that electricity bills will, on average, increase by 21.04% in 2022. The CNN report also highlighted that inflation reached 48% in Brazil last year. Certainly, many food prices were much higher than the official Consumer Price Index (IPCA), which considered the country's inflation had accumulated to 10.06% in 2021.

Whichever way one looks at it, we the consumers have been stabbed in the back because reservoirs’ have now replenished. Rains have been non-stop so hydroelectric plants should be up and running at full swing. Yesterday, Globo news mentioned in their report based on what experts’ opinions say is that there wouldn’t be any price reduction due to the high cost of thermal plants which have accumulated and the consumer still has to pay for these extra costs in electricity for the coming years.

In my opinion, the truth of the matter is they can say what they like. Prices were increased and we the consumers paid the hiked prices, so now to make out they divided the cost with us is poppycock. They ripped us off based on opportunity of the moment, and now they are comfortable with the level of profits they are making, and of course for their convenience we the consumers get the brunt of the problem, as they want to maintain profit potential.

Russia caused the knock-on effect of rising gas prices which reached 800% for 2021 while Europe saw the highest escalation of costs to purchase it.

Take care!

Carl Boniface

Vocabulary builder:

Tranche (n) = a portion of something, especially money. Parcela

IRENA = International Renewable Energy Agency

Stabbed in the back = to be unfaithful or disloyal to. Her best friend stabbed her in the back and they never spoke to each other again. esfaqueado nas costas

Brunt (n) = effect, force, impact, burden, substance. impacto

Knock-on effect = a secondary, indirect, or cumulative effect. efeito de golpe

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