Energy price rises have hit us all hard, with household bills more than doubling in the past year, leaving us all to wonder why this is happening – and what can we do about it.
The Triodos Corporate Finance team recently addressed the energy crisis with an engaging discussion from Thrive Renewables and Empower Community Foundation. Our expert panel explored the challenges we’re all facing along with the solutions that can drive forward the transition to a more stable, resilient and climate-friendly energy system.
In this article we’ve mapped out our five key takeaways from the session – if you’re eager to learn even more, watch the full webinar in the video below.
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Gas prices hugely impact the cost of energy
There are many factors that can cause a spike in energy prices, as the managing director of Thrive Renewables, Matthew Clayton, explained in the panel discussion. The winter of 2021 was a particularly cold one for Europe and low gas storage levels pushed prices up. The Russian invasion of Ukraine in the following February very quickly saw prices doubling – leading to crippling energy bills for domestic users. It’s also important to get to grips with how the National Electricity Grid works. Suppliers and generators trade electricity in half-hourly auctions and the price is set by the very last generator – which tends to be gas, the most expensive source. Learn more about this process here.
Expanding renewables will build a resilient energy system
Our supply system depends far too heavily on imported gas and increasing the proportion of the energy mix that comes from renewables will create a more resilient energy market within the UK. Robert Knowles, finance and commercial partner for Empower Community, explained that a key benefit of renewables is that their fuel cost is zero. You’re only paying for the installation and operation costs, which are a fairly known entity. Expansion in the deployment of renewables will allow us to – with the right market mechanisms – stabilise energy prices from that particular segment.
Renewables can lower the nation’s electricity bill
Matthew revealed that one of the positive features of renewables is that onshore and offshore wind, solar and hydro (to a certain extent) can deliver power between 50 – 60% of the cost of power generated by new nuclear capacity, and around a third of the cost of generating electricity using gas. In terms of reducing our energy bills, Matthew predicts that renewables could overwhelmingly lower the nation’s electricity bill – by about £8.9 billion annually.
Empowering people is key to success
Empower Community’s managing director, Alex Grayson, explained that community benefit is hardwired into every single one of their projects. Empower Community is developing projects that plug into local investment and decentralising renewables. Matthew added that you can never have too much community involvement, and explained how Thrive’s community benefit programme enhances community spaces and brings local people together. The scale of what the energy sector needs to achieve is not going to happen if it’s someone else’s problem – Matthew argued that the key to achieving this transition is to empower everyone to get involved.
The future of renewable energy looks bright
Renewable energy projects can offer long term stable energy pricing. Robert explained that Empower Community is focusing on ensuring power can be sold ten years into the future. Manufacturers sourcing renewable energy directly is becoming more and more popular, improving both environmental and financial performance, Matthew added, revealing that it’s a really exciting time for renewables.
About community-led renewables
Community energy projects connect people and local communities to the renewables being built in their area. They are either owned and controlled by the communities themselves, or this is done in partnership with commercial or public sector organisations. You can find out more from Community Energy England and from Power to People.
About the Triodos Crowdfunding platform
Since the Triodos Crowdfunding platform was launched in 2018, four community-led renewable energy projects have raised direct investment with the bank through crowdfunding investors. These projects have raised millions of pounds to date for community benefit and are committed to continuing to raise more throughout their duration. Empower Community Foundation is currently open for investment on the platform.