Every day Eirgrid predicts how much electricity will be needed the next day, and power stations put in a bid saying how much they can supply and at what price...

The cheapest electricity comes from wind and solar, so that's bought first. But that isn't enough to meet demand, so Eirgrid has to buy electricity generated by burning gas (and some days from burning coal and oil!)...

That electricity is expensive. And the most expensive generation sets the price for everyone. If gas-generated electricity costs 15 cent/unit, the wind farms are paid 15 cent/unit too. The point is to make renewables an attractive investment, but...

... since the Russian invasion of Ukraine, fossil fuels have obviously gone through the roof, and profits on renewables are much higher than expected. Which is why the Green Party are calling for a windfall tax

But if we *didn't* have renewables, our demand for gas would be even higher, and so the price of gas-generated electricity would be higher. And if we expand renewables enough, we can stop firing up the most expensive power plants, and bring the price down.

Plus, you know, not kill ourselves with global warming.

@ray_cun Ray, where do we burn oil if we it's needed and is that unrefined or refined?

@lawrence_green1 I don't know. RTE have a good daily tracker of electricity generation, but I don't know how it relates to individual plants

@ray_cun @TrishByrne Isn’t the free market great? Not that a really free market would actually be great. It amazes me that we have a system where a company making more money as a generator can set it against the open market charges. Well not that amazing really.

@krady @TrishByrne It's a really complicated market, which I have over-simplified because of my superficial understanding! I was listening to a podcast the other day arguing that is not designed for large-scale renewable supply

@ray_cun @michellecorry Seems very very unfair to people who paid a premium for 'green energy' to get whacked when generators can gouge everyone.

@ray_cun Most fungible commodities are similar, aren't they? How are beef, milk prices set (aside from luxury grades, etc.)?

@ray_cun Great thread, thanks Ray

@ray_cun @gavreilly But wouldn't that mean just more profit for Airtricity? If prices are set centrally by Eirgrid their cost of generation stays fixed for generating wind energy but they get paid more due to others burning gas. So they get even more profit surely, at our expense?

@ray_cun Electricity generation in Ireland is still wholly reliant on gas and coal.

@ray_cun What’s particularly galling is that people aren’t screaming for heads to roll, because the expense is because of Gas. If you were to imagine for a moment that renewables were responsible for even a small surge in pricing, the replies would be incredibly malicious.

@ray_cun It's a con. Here in the UK the rate paod for excess solar is still 5.5 pence per kwh. The new tariff this autumn is 52 pence per kwh.