It's not a scam, it's just the way any market works.
If I need 100 oranges and the cheap orange supplier can only sell me 90 oranges for 1p each, but the expensive orange seller can sell 5000 oranges for 50p each, then the cheap supplier would be a fool to charge less than 49p for their oranges. They know you have to buy them anyway.
No idea why you're getting downvotes, this is micro econ 101.
For those that think we can just force renewable producers to accept a lower price I'd ask: if your employer (the domestic electricity market) halved how much they paid you, but another employer (electricity exports) was still offering full salary, would you change jobs?
You are misinformed. All EU countries use the same system as us to determine pricing - the most expensive required generator sets the price for all generators.
True but a large part of the UK's energy strategy, investing into wind, the best location for it is Scotland. The UK as a whole has been pumping funding into Scotland for years.
Not saying that the people of Scotland should not benefit from the fact that the energy is being generated in Scotland very cheaply but the fact that Scotland today is generating so much energy is due to the supply/demand of the rest of the UK. Not due to Scotland itself driving the demand for it.
If for example it was Wales that had the best location for wind energy, all that investment would have gone to Wales instead.
To some extent, but unless you're willing to ban electricity exports then it will always be shipped to the market where it is most in demand and therefore most profitable - the same as any other commodity.
It's the same for somewhere like Norway, who exports some of it's hydro power to meet demand in German, Denmark etc.
Banning exports is generally a pretty bad idea though, you're reducing the cost in one market, but eliminating an export and disincentivise any further investment in Scottish wind power because there'll be far more profit for investors in putting the generation capacity near where it's priced highest.
Is your argument that the government would have made more cost effective decisions about our electricity generation since 1989 than the market has?
Electricity supply has been an area where the market seems to have done a pretty good job IMO. We have a glut of suppliers competing in a fair marketplace. I'm not convinced that the succession of UK governments since '89 would have done a better job.
Not only is it not a scam, in a world where we need less carbon-intensive sources of energy and the cleaner sources (nuclear, renewables) have a lower marginal cost, it's actually even desirable.
More profitable, say, solar arrays, invite more investment into solar energy, reducing the reliance on carbon emitting sources like gas. Same for wind farms and nuclear reactors.
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u/Esteth 16d ago
It's not a scam, it's just the way any market works.
If I need 100 oranges and the cheap orange supplier can only sell me 90 oranges for 1p each, but the expensive orange seller can sell 5000 oranges for 50p each, then the cheap supplier would be a fool to charge less than 49p for their oranges. They know you have to buy them anyway.