Warning to the US on electricity prices – from the UK - a doubling of electricity prices as more solar and wind is rolled out

After reading the article linked below, it is worth comparing where the UK’s household energy prices are with the massive subsidies paid over years to develop renewable energy sources of electricity and project those to the US.

US Offshore Wind Industry Faces Inflation, Interest Rates, Insufficient Subsidies | Principia Scientific Intl. (principia-scientific.com)

Here’s a few excerpts:

“The value of Danish energy company Orsted, the world’s largest offshore wind farm developer and a big player in the U.S., has plunged about 31 percent since it declared $2.3 billion in U.S. impairments in late August due to supply delays, high interest rates and a lack of new tax credits.”

Those “new tax credits” for the US have had an equivalent in the UK for a long time such that “renewables” made up half of the UK’s energy supply  according to this article published in June 2023

Electricity Generation UK Sources in 2023 (energyguide.org.uk)

“As of 2023, the most recent data from the National Grid (released in 2020) indicated that zero carbon sources generated around 50% of the electricity produced in the UK; this has increased from a meagre 20% back in 2010.”

According to this UK ENERGY IN BRIEF 2023 (publishing.service.gov.uk) “inland” UK energy consumption expressed in million tonnes of oil equivalent has fallen from 222 in 1990 to 172 in 2022 – temperature corrected, whatever that means – a fall of more than 22%.

The pink comic outfit the BBC had this piece of work:

Fossil fuels, renewables and nuclear: The UK's changing energy mix - BBC News

“Around one-fifth, or 20.7%, of UK energy use was from "low-carbon" sources in 2022. This is up from 12% in 2012. "Low-carbon" includes renewables such as wind, solar, hydropower and bioenergy, as well as nuclear.”

All seems a little dubious, given a 20% population increase since 1990, but, those are some numbers.

The point is this. Where the UK has gone - with massive subsidies to renewables and adverse regulations for hydrocarbon fuels plus punitive taxes - is where the US will go with its plans for the Green bogus/booger New Deal tax credits and subsidies buried in the Inflation Reduction Act.

The link to the Principia Scientifica article at the top points to requests that would match the subsidies paid in the UK, by tax payers for the “privilege” of being charged massively inflated electricity prices.

For example, this:

“Biden’s administration wants the U.S. to deploy 30,000 megawatts of offshore wind by 2030 from a mere 41 MW now, a key part of his plan to ‘decarbonize’ the power sector and revitalize domestic manufacturing, and has passed lucrative subsidies aimed at helping companies do that.”

And this:

“In New York, offshore wind developers also sought to boost the price of power produced at their projects. Norway’s Equinor and its partner BP are seeking a 54% increase for the power produced at three planned offshore wind farms – Empire Wind 1 and 2 and Beacon Wind.”

And this:

“The credits are each worth 10 percent of a project’s cost and can be claimed as bonuses on top of the IRA’s base 30 percent credit for renewable energy projects – bringing a project’s total subsidy to as much as 50 percent.”

What’s the bottom line?

Well, UK household electricity prices are now around 31 pence per kWh – up 50% over the last two years. Brits can get their electricity solely from renewables, as a result of massive subsidies over decades at the same price as electricity generated from hydrocarbons.

Decades of renewables subsidies that were denied the hydrocarbon industry. A command economy decision typical of communist central planning.

A probable equivalent subsidy to hydrocarbon based electricity production would have resulted in a cost of 10 pence per kWh with “green” energy priced at 50 pence per kWh.

Anyway! UK electricity is 31 pence 3per kWh which works out at 39 cents per kWh. You can compare this to the going rate on the US of 16 cents.

Electricity Rates by State (September 2023) | ChooseEnergy.com®

(Out of interest, natural gas in the UK has also gone up around 50% in the last two years from 5.2 pence per kWh to around 7.5 pence per kWh).

So, that’s the bottom line for US households. US electricity prices will approach those in the UK as more of the renewables are rolled out. More than doubling by 2030.

Of course, the inflationary impact will be felt (again) on food prices and then via inevitable second round effects, on prices in the whole economy, and into the measure of inflation that central banks react most to – “Core” CPI excluding food and energy – and hence into interest rates and mortgage rates.

The fiscal deficit for the US will hit 2 trillion bucks for the year to September 2023, up from a trillion for the year to September 2022 – as the budgeted increase in total taxes taken falls off a cliff despite Biden’s tax increases. Funny that, the higher the tax rate, the more people avoid paying taxes, who would have thought it!

Here’s a piece on the tax shortfall for info:

US Deficit Skyrockets Thanks To Biden’s Massive Government Spending | The Daily Caller

Typical socialists. Spend like drunken sailors and are shocked when no-one can afford to pay for their drunk spending.

Onwards!

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