Thread by @LoftusSteve

🙊 The Common Disinformation Megathread 🙊

Last year the House of Commons Library published a document designed to brief MPs on the basics of renewable energy pricing.

It's a pack of lies that's regularly used across the RE sector. I'll show you how.

1️⃣ The commons document makes the following points,

🔸Gas sets the price for renewables
🔸Renewables are the cheapest in the merit order
🔸That renewable prices are falling

Let me explain why that's nonsense, but first, the link.

commonslibrary.parliament.uk/why-is-cheap-r…

2️⃣ The key tenet of the document is that pricing on the spot market is determined by the marginal generator, the last operating generator in the merit order.

The theory is simple, the cheapest get used first and the more cheap options the more likely the last is cheap too.

3️⃣ The document rightly points out that this is usually gas, so it sets the price for everything else.

The cry from renewable advocates is that more wind and solar will push gas off the merit order and drop prices.

The problem is, it's all a trick.

4️⃣ You can read in the thread below how renewable pricing works and how all of them are on contracts above the market rate.

https://x.com/LoftusSteve/status/1736061472994701366

5️⃣ If every renewable in operation has either a fixed price, or a price that is higher than the wholesale price (gas), then how is gas setting their price?

The HoC document mentions this in the section about profits but the author never picks up on the contradiction.

6️⃣ The truth is that the prices bid into the spot market by renewables are completely arbitrary.

They can bid anything they like but have settled on capture prices, the price of the bread dough without the cost of machinery, wages, warehousing, bank loans etc required to bake.

7️⃣ Of course, this makes a mockery of the merit order, the whole point of which is to use the cheapest forms of generation first.

Instead, we have the most expensive forms cheating the merit order so they are used first. Which for us, results in ever increasing bills.

8️⃣ This is not by accident. The merit order has been in place since the early 90's and was designed around generators that operated in similar ways. Had renewables competed on a level playing field they would never be used, and so never built.

9️⃣ It's also made it possible for everyone to lie to you repeatedly that "Renewables are the cheapest form of generation (on the wholesale market)" without mentioning "when you ignore all their subsidies paid outside the wholesale market".

They all know. It is a straight lie.

🔟 The HoC document then goes on to explain how prices of renewables are falling, and for this 2nd trick it uses this IRENA graph with 2021 data.

But this is global data, heavily influenced by China, it's not UK data. Had they used 2022 IRENA data it would show flat or rising.

1️⃣1️⃣ At the time this was published generators were already pulling out of contracts due to rising prices and AR5 had returned no bids for offshore wind.

It's grossly misleading to use international data in a UK specific document designed for UK MP's.

1⃣2⃣ I wrote to the HoC Library and explained all this to them in detail earlier in the year, but the only thing they agreed to change was the title. It originally just said renewables were the cheapest and they changed it to add "on the wholesale market".

1⃣3⃣ This is a document that MP's can reference to become more informed about renewables and I regularly see it used on here, but it's packed full of intentional disinformation.

It should be removed from the library and I ask that you tag your MP to inform them.

1⃣4⃣ If you enjoyed this thread then please retweet it, and bookmark it for the next time you see someone use this document, or tell you that renewables are the cheapest forms of electricity.