People used to say that you could have green energy or cheap energy, but not both at once. That myth has now been exploded. New official figures prove that the price of renewable energy has lowered dramatically. This is great news for the planet. And, it's also great news for your gas and electricity bills, as suppliers should be able to pass those savings on to you.
Here are 5 key facts about what’s changed in the energy market, and what it means for you:
Fact 1: Renewables are much cheaper than almost anyone predicted
In the latest Government energy auction the price of offshore wind power came in at £57.50 per megawatt hour (MWh). That’s the same price as conventional gas. And it’s much cheaper than nuclear (the Government has promised Hinkley Point owners £92.50 per MWh for the first 35 years of the plant’s operation).
Even energy experts were surprised by the wind power figure of £57.50 per MWh. Just three years ago the price was £140. The chief executive of RenewableUK called the bid "astounding" and said that "record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure." Go wind!
At Bulb, we expected to see big falls in renewable generation costs. In countries close to the equator, renewables are consistently cheaper than fossil fuels, especially solar. We’re delighted to see this spread as far north as the UK.
Fact 2: Real competition in the renewables industry means prices should keep falling
One of the really positive things about renewables is that there is a lot of competition in generation. For example, there are quite a few different companies who build and install wind turbines. This drives real innovation and investment. Don't be surprised to see offshore wind come in at £40 per MWh in the next few years.
And it’s not just wind. Solar, hydro and biomass technologies are improving all the time. Green energy costs will continue to fall.
Fact 3: There is more than enough renewable energy to supply our needs
Another common myth is that green energy can never meet demand. This isn't true. There is enough coastline around the UK to provide substantially more offshore wind generation to supply power, not to mention all the space we could use for solar and other renewable energy. Yes, renewable energy is intermittent: some days are cloudier or windier than others. But with a balanced fuel mix of renewable generation sources, including hydro and anaerobic digestion, this can be overcome. At Bulb, we have both in our fuel mix. And with developing battery storage technology, which would allow us to store excess energy for use later, this problem will cease to exist.
Fact 4: Cheaper energy prices should be reflected in your bills
It is a big achievement for the cost of power generation to come down so significantly. But the important thing is for those cost reductions to come through to households in lower bills. The wholesale cost of energy makes up 40% of your household bill. So, lower generation costs should mean lower household bills.
Historically, this hasn't always happened. Wholesale energy costs have come down a lot this year, but too many suppliers haven’t passed those saving on to customers. In fact, all of the Big 6 increased their prices.
This year we passed on two price reductions to our members. We're committed to helping our members reduce their bills and will continue to work hard to do just that.
Fact 5: The power to reduce your energy bill and go green is in your hands
This year, we've seen more and more people switch away from inefficient, overpriced suppliers. In fact, switching levels are at a record high. At Bulb, we reached 100,000 members in August.
Many people switch to Bulb because we supply green energy at affordable prices. This is a new choice for consumers in the UK. And thanks to renewable innovation, it is here to stay.