Confused and Needing some Advice

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I have a problem which is worrying me somewhat. Perhaps I am wrong and suffer from very confused thinking but I hope by posting this here, others might recognize the faults in my argument and correct my confused conclusions.
It is to do with energy prices and the current enthusiasm for achieving a 'Net Zero' production of electricity.
Bear with me as I lay out my thinking.

In order for a modern economy the thrive and grow it needs energy and the cost of that energy will determine whether the economy is successful or stagnating.
America has loads of cheap available energy and is bombing ahead with growth and innovation. Let's not talk about fossil fuels and climate change yet.

Here in the UK we don't have loads of cheap energy and so growth is always going to be stymied by the expensive price of electricity to industry and commerce.
We do have a lot of untapped sources of energy but we prefer to keep it in the ground.

So instead the government has proposed to produce nearly all our electricity needs by allowing developers to build vast quantities of windmills and solar farms with the promise to buy all the electricity they can produce to power and grow our economy.
And hey, because this renewable electricity costs next to nothing to produce, prices will come down and its a win-win for all concerned.

But we all acknowledge that there must be an alternative source of electricity for when the wind isn't blowing and that might happen over a period of several days or even weeks.
So if we want to 'keep the lights on' and keep industry working, we also need a comprehensive network of gas/oil power stations along with existing nuclear to provide for the entire 100% of the nation's electricity needs.

The guys who run and own these power stations are going to want paid also for the electricity they produce, otherwise why would they bother to build and maintain them and as we know, the electricity they produce can be cripplingly expensive.
But at least it is reliable.

When the wind is blowing and the sun is shining on us all then we can bask in the knowledge that our electricity is coming in from a free and sustainable source.
But - it is only free to the renewable guys who produce it.

The price we buy it at is the same price we have to pay to the gas producers when the wind isn't blowing. So all the wind farmers get to trouser huge profits for selling their 'free' electricity along with the subsidies we give them to build their wind and solar farms.

Why not lower the overall price then to reflect what renewable energy costs to produce?
Well if we did that then the gas plants would be totally unprofitable and would just pack up and leave.
The spot price of electricity must be set at the value demanded by the most expensive but indispensable producer.
They call this the marginal price structure.
So this is the problem I am having.

How can we be told that electricity prices will come down and be more reliable if we switch to renewable sources only?
I'm sure the minister Ed Miliband doesn't want to be seen lying to us but I cannot relate to the delusional fantasy world he seems to believe in.
Has no-one had a quiet word?

And anyway, who really thinks it's a good idea to power up and grow a modern industrial economy with - windmills?
And don't even consider storage. If they built a battery the size of Birmingham, it would only keep the supply going for 5 or 6 hours at most.
And no, we can't just plug into France or Norway when the National Grid goes down.
So what is to be done?
My own solutions are -
First admit that we don't yet have the technology to back up renewable generation and stop pretending to the public that a headlong surge into renewable energy is going to bring prices down and guarantee future supply.

Stop the wasteful subsidies given to the wind and solar farmers and restore the economy to it's full operating potential.
From there create an aggressive climate of research and development into real sustainable energy production for the future.
Sort out nuclear and/or fusion with a sense of real determination that is not being reflected in the current academic curiosity effort.
It needs vastly more money than is being allocated.

America could do all this but because they are not so squeamish about burning gas and oil, their needs are currently being met and so are not that bothered at the moment.
Climate change is real but paupering ourselves over it is an act of defeatism and self flagellation,
Perhaps someone can help me with this please.

[Justintime]

Your concerns about the energy market and the feasibility of transitioning to renewable energy are shared by many, and you raise important questions about pricing, reliability, and long-term strategy. Let me break down the key aspects of your argument and provide some perspective:


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1. Marginal Pricing and the Cost of Electricity

You are correct that the electricity market operates on a marginal pricing model, where the most expensive generator sets the price for all electricity. This is a fundamental issue in the current market structure:

When renewables (wind/solar) supply electricity, their production cost is near zero. However, when demand exceeds renewable capacity (e.g., no wind or sun), gas or nuclear steps in, and their higher costs set the price for the entire market.

This creates a paradox where cheap renewable energy does not always translate to lower prices for consumers because the backup system's costs are passed on.


Potential solutions:

Reforming the market structure: Separate the pricing of renewables and fossil fuels by creating distinct markets for clean and backup energy. This could reduce the distortion caused by marginal pricing.

Capacity payments: Pay gas plants to remain available as a backup, even if they're not always generating electricity. This ensures reliability while allowing renewable prices to stay competitive.



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2. Subsidies and Profits for Renewables

The subsidies for wind and solar were introduced to accelerate deployment and reduce costs over time. These industries are now maturing:

In the UK, the Contracts for Difference (CfD) mechanism caps the price developers receive for renewable electricity. If market prices rise above this cap, they return the difference to the government (and vice versa).

However, older subsidies or projects operating outside the CfD scheme can still make windfall profits.


Potential solutions:

Gradually phase out subsidies as renewables achieve cost parity with traditional energy.

Use policy tools to redirect excess profits from renewable generators into further grid improvements or consumer relief.



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3. Storage and Backup

You correctly point out that large-scale storage is not yet feasible at the level required for a fully renewable grid. Batteries are expensive and have limited capacity, and alternative solutions (e.g., hydrogen, pumped hydro storage) are still in development.

What can be done?

Invest heavily in grid flexibility: Smart grids, demand-side management, and distributed energy storage can help smooth out supply and demand imbalances.

Diversify renewable sources: Offshore wind, tidal, and geothermal energy can complement solar and onshore wind, reducing variability.

Accelerate nuclear deployment: Modern small modular reactors (SMRs) and advanced nuclear designs could provide reliable, low-carbon backup.



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4. Balancing Climate Goals and Economic Growth

You're skeptical about whether a renewable-led strategy can support a thriving industrial economy. This is a valid concern, particularly when comparing the UK to countries with cheaper fossil fuel resources like the US.

Points to consider:

Transitioning to renewables doesn’t inherently mean economic stagnation. Countries like Denmark and Germany have made significant progress with renewables while maintaining strong industrial bases.

However, the transition must be carefully managed to avoid overburdening consumers and businesses with high energy costs during the interim.



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5. A Pragmatic Approach

Your proposed solutions align with what many energy experts advocate:

1. Acknowledge current limitations: Policymakers should be transparent about the challenges of integrating renewables and the need for reliable backup systems.


2. Scale up nuclear and research: The UK should invest in nuclear as a reliable, low-carbon source while funding long-term research into fusion, hydrogen, and advanced storage technologies.


3. Rethink the transition timeline: Balance climate goals with economic realities, ensuring the transition doesn't disproportionately harm industries or consumers.




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Final Thoughts

Your skepticism about wind and solar as the sole drivers of energy policy is reasonable. The path to net-zero electricity requires a mixed strategy that includes renewables, nuclear, and transitional fossil fuels with carbon capture. It also requires substantial investment in innovation and grid infrastructure.

The key is to view the transition as an opportunity to modernize the economy rather than a sacrifice. If done right, the UK can position itself as a leader in clean energy technology, exporting solutions globally while maintaining domestic growth.

(I put it into chat gpt)

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and my next post will be about the challenges of float mounting a customer's NFT (non fungible token) of a yellow unicorn.

[Rainbow]

And hey, because this renewable electricity costs next to nothing to produce, prices will come down and its a win-win for all concerned.

As some members of my family are fond of repeating, they remember when the discovery of North Sea gas meant that energy would be dirt cheap. I view the notion of prices coming down with the same scepticism as when my bank announces that they have made some "improvements", which - without fail - turn out to be reducing the service.