By Paul Homewood
While renewable subsidies are adding substantially to retail electricity prices, we must not forget the role of the Emissions Trading Scheme, aka Carbon Tax, which directly impacts wholesale prices because it is effectively a tax on gas power plants.
We were a part of the EU ETS scheme until Brexit, since which the new UK scheme has broadly mirrored the EU’s.
As the chart from EMBER shows below, there was a sharp rise in carbon prices during 2021. Currently prices are four times what they were in 2018:
https://ember-energy.org/data/european-electricity-prices-and-costs/
The UK carbon price shows the same pattern since May 2021:
Converting the EU price to sterling,UK carbon prices were around £20/tonne in 2018, and now run at about £50/tonne.
Another reason why electricity prices have rocketed in the last few years.
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Author: Paul Homewood
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