AI-generated image of the Renewable Energy delusion
The Carbon Economist recently published an article innocuously entitled ‘Outlook 2026: UK electricity – Today and tomorrow‘. The Carbon Economist is an offshoot of the Petroleum Economist which has had a long and illustrious publishing history, providing oil and energy market analysis since 1934. It’s the subtitle that is striking:
Net Zero is not the problem for the UK’s power system. The real issue is with an outdated market design in desperate need of modernisation.
The author, Adi Imsirovic, currently is a guest lecturer at the Energy Systems MSc course at the Department of Engineering, Oxford University and is not some Just Stop Oil activist or an over-enthusiastic candidate for the Green Party. Imsirovic, who has 35 years of experience in oil trading, has held a few senior trading positions, including global head of oil at Gazprom Marketing and Trading and regional manager of Texaco Oil Trading for Asia. He was a Fulbright Scholar, having studied at the Graduate School of Arts and Sciences, Harvard University. Adi has a PhD in economics and a Master’s degree in energy economics. He is also author of well-received books on international oil markets.
The ‘woke’ Oxford view
Dr Imsirovic’s thesis that “Net Zero is not the problem” deserves scrutiny not only because of his credentials and his publisher’s track record. The thesis, radical as it is, needs to be judged in the context of the tumultuous year since President Trump began his second term. In the past year, the Trump administration has exited the Paris Agreement and last week withdrew from the UNFCCC and IPCC among over 60 other UN-related and other organisations that may be working “contrary to the interests of the United States”. Crucially, the US has begun to stop funding all efforts including those by the plethora of environmental NGOs to achieve Net Zero. Last year’s UN annual climate jamboree, COP30 held in Belém, Brazil, ended in disarray without even the usual aspirational closing statement to end use of fossil fuels and hasten the so-called energy transition.
Yet, here is an opinion telling us that Net Zero is not the problem. Dr Imsirovic’s ‘Outlook 2026’ sets out to perform an act of intellectual rescue. Faced with mounting public anger over Britain having among-the-highest electricity prices in the developed world, the article seeks to exonerate Net Zero, renewable subsidies and green levies, and instead indict “poor market and system design” as the true culprit.
It is a seductive argument. By conceding that prices are high while absolving the green transition itself, ‘Outlook 2026’ offers policymakers a comforting narrative: the problem is not green ideology but mere energy plumbing.
Yet this narrative collapses under scrutiny. Far from being an unfortunate side-effect of outdated market architecture, Britain’s electricity crisis is the predictable outcome of two decades of policy-driven distortions imposed in the name of decarbonisation. “Market and system design” in ‘Outlook 2026’ functions less as diagnosis than as alibi.
Lies, Damn Lies and Statistics
The article begins with a curious argument.
The UK has some of the highest electricity prices in the world. It has become fashionable to blame this on Net Zero policies, green levies or the cost of renewables. But those explanations miss the point. Wholesale prices are only 30-45% of the retail price, not far from the share of various levies and taxes. The real cause lies in poor market and system design, not decarbonisation.
Wholesale electricity prices, ‘Outlook 2026’ observes, account for only 30-45% of retail bills, roughly comparable to the share of taxes and levies. Therefore, the report concludes, blaming renewables or Net Zero “misses the point”.
The implication of the statement that the wholesale price share of retail prices is roughly equal to that of “various levies and taxes” is not clear. It is not apparent that, therefore, the “various levies and taxes” don’t matter. Renewable subsidies are not just extra costs. They include Contracts for Difference, Renewables Obligation Certificates, capacity payments and more. These stem from policies that push weather-dependent intermittent power into a grid built for reliable (dispatchable) power sources and delivery.
The Renewable Energy Foundation estimates that the UK has spent approximately £220 billion (2024 prices) on renewable energy subsidies since 2002, with current annual costs running at £25.8 billion, now comprising roughly 40% of total electricity system costs. These are not marginal accounting artefacts. They are the dominant drivers of rising bills.
In a recent interview, independent energy consultant Kathryn Porter stated that people “have been sold a fairy tale about renewables making their bills cheaper”. Depending on natural gas, even with the high prices during 2022 caused by the outbreak of the Ukraine war, would have still saved the country £220 billion, equivalent to £8,000 per household. Without the drive for decarbonisation and so-called ‘cheap renewables’, the cost of electricity supply in the UK would now be 40% less.
What is “Market Design”?
‘Outlook 2026’boldly asserts that better “market design” can reconcile intermittent energy with industrial-scale reliability at lower cost. Time-of-use tariffs, dynamic pricing, demand response and local balancing are presented as silver bullets. Yet these concepts remain largely theoretical, supported more by modelling exercises than by real-world evidence. Dr Imsirovic states:
Most retail customers still face flat tariffs that bear little relation to time-of-day prices or grid conditions. As a result, there is no incentive to shift demand from peak, expensive and most polluting periods to less pricey ones, making electricity more expensive for everyone. … Demand response, dynamic tariffs and local balancing remain the exception rather than the rule.
Few advanced economies have implemented comprehensive time-of-use pricing for households, and fewer still have demonstrated that it materially lowers system-wide costs rather than merely shifting inconvenience onto consumers. The idea that households doing their ironing or washing at 3am or factories throttling output to chase cheaper electricity when the sun shines or the wind blows or when demand is low seems preposterous. This is a triumph of abstraction over lived reality. Electricity demand, particularly in modern industrial societies, is relatively inelastic precisely because it underpins everything else including the daily schedules of firms and households.
“Local balancing” is never properly defined. If it implies decentralised systems with local renewables plus backup, one must ask: backup of what kind, and at what scale? A typical combined-cycle gas turbine — the workhorse of reliable dispatchable power — operates optimally at scales of around 400 MW and up to 1,600 MW or more. Are local counties or towns to host their own gas plants? Or does “local balancing” in practice require vast new transmission infrastructure to smooth renewable intermittency across regions? The latter, of course, is exactly what Britain is already paying for, as grid reinforcement and new transmission line costs, as well as a host of subsidies, spiral under the Net Zero agenda.
The report’s assertion that wind and solar are now “the cheapest forms of new generation almost everywhere” is another familiar trope that collapses once system costs are included. Levelised Cost of Electricity (LCOE) estimates are endlessly recycled by renewable advocates, but they exclude the very costs that make intermittent power usable in practice: backup generation, overcapacity, storage, curtailment, inertia, frequency control and transmission expansion. As documented extensively elsewhere, the Full Cost of Electricity (FCOE) tells a very different story from misleadingly low LCOE estimates.
Here is what Dieter Helms — a tenured professor at Oxford where Dr Imsirovic guest lectures — says in relation to ‘cheap renewables’:
Solar and wind are intermittent, low-density, geographically distributed generating technologies. No modern economy could rely solely upon them. There has to be back-up. This back-up is an additional cost of renewables. … To be clear, renewables don’t pay the costs of the intermittency they cause to the system; they don’t pay for the additional capacity needed to meet an expected peak demand; they don’t pay for the extra transmission and distribution networks required; and there need to be lots of wind turbines and lots of solar panels to replicate the power output (when the wind is blowing and the sun shining) of a gas turbine.
Good Market Design Exemplars
What are the examples of better “market and system design” countries?
Across the developed world, systems that pair renewables with flexible markets perform better. Germany shows that high taxes need not mean high inefficiency. France benefits from consistent policy and a stable, legacy nuclear base. California and the Nordic countries, through dynamic pricing and cross-border trading, manage renewable variability efficiently. The UK, by contrast, manages to inherit the downsides of both competition and control.
Germany, which the report curiously cites as evidence that “high taxes need not mean high inefficiency”, now serves as Europe’s cautionary tale of economic suicide. Despite spending over €500 billion on its Energiewende, Germany has shuttered nuclear plants, expanded coal use (including inferior local lignite) for capacity and reliability while energy-intensive industries are driven offshore. BASF’s relocation of major operations abroad is not an aberration; it is a rational response to structurally uncompetitive energy costs. To present Germany as a success of renewable-friendly market design is quite a head-scratcher given all the bad press on Germany as the ‘sick man of Europe‘ in the mainstream media.
Countries and states with the highest penetration of wind and solar – Germany, the UK, Denmark, California — also exhibit some of the developed world’s highest electricity prices, rising energy poverty and accelerating de-industrialisation. The report points to California and the Nordic countries as exemplars of flexible, renewable-friendly systems. Yet California’s electricity prices have surged alongside rising blackout risks, while its grid stability increasingly depends on electricity and gas imports and emergency measures. The Nordics, meanwhile, benefit primarily from abundant hydro and legacy nuclear — dispatchable, not intermittent, resources. Their success undermines rather than supports the renewable-centric thesis.
Correlation here is not coincidence; it is causation mediated through physics.
Techno-Optimism
Techno-optimism permeates the ‘2026 Outlook’:
The electricity sector today resembles computing in the 1970s. … Future households and businesses will generate, store and trade their own energy. … Power will flow in multiple directions, coordinated digitally rather than centrally dispatched.
Techno-optimism in ‘Outlook 2026’ reaches its apogee in the vision of households as “prosumers”, trading electrons via solar panels, batteries and electric vehicles in a digitally orchestrated “energy commons”. The language — “optionality”, “networked platforms”, “from mainframe to cloud” — will sound familiar to anyone who lived through the Enron era. The analogies have a familiar ring. They echo almost verbatim the rhetoric used by Enron in its sales pitches during the late 1990s — decentralised trading, frictionless energy markets, massive arbitrage opportunities. Then, too, we were promised fungible electrons and infinite efficiency gains through clever financial and digital engineering.
What Enron brutally demonstrated is that electricity is not software. It was always constrained by the laws of thermodynamics, scale economies and real-time balancing requirements. Then, as now, the language was seductive but the physics unforgiving. While Enron collapsed in one of the largest accounting fraud cases in business history, the stories it sold about a future of dispersed, “smart” electricity were siren songs for capital markets willing to buy into an imagined new energy Valhalla.
This vision reeks of ‘technobabble’, akin to the grandiose presentations of Enron executives in the early 2000s, which hyped fungible electrons and smart trading platforms before collapsing in scandal. It echoes the pseudoscientific techno-optimism of Parag Khanna’s TED-talk-style futurism, divorced from empirical reality and the immutable laws of physics and economics.
As Mark Mills has argued, this vision belongs to the “magical thinking of the new energy economy”. No modern industrial society has ever been powered by dilute, intermittent sources coordinated by household-level arbitrage. Batteries remain prohibitively expensive at grid scale. Storage does not eliminate intermittency; it magnifies costs and material dependencies.
The battery question alone should sober any serious analyst. Grid-scale storage sufficient to cover days or weeks of low wind and solar output — the infamous Dunkelflaute — remains prohibitively expensive and resource-intensive. Even optimistic projections rely on mineral supply chains dominated by China and energy-dense inputs derived overwhelmingly from fossil fuels. Storage does not eliminate intermittency; it merely displaces it into cost, complexity and geopolitical risk.
‘Outlook 2026’ refers to the “quiet return of direct current”, but this claim too suffers from similar overreach. Many devices do operate internally on DC, and niche applications — data centres, EV fleets, industrial parks — may benefit from local DC microgrids. But the suggestion that AC grids will become mere “backup” systems is fanciful. AC transmission persists because it is unrivalled for long-distance, high-capacity power delivery with manageable losses.
Edison did not lose to Tesla by accident; physics made the decision.
An Unserious Look at Britain’s Electricity Future
‘Outlook 2026’ remains unconvincing as a serious view of Britain’s electricity future. Its argument fails not because market design is irrelevant, but because it is subordinate. Markets cannot conjure dispatchability from intermittency, nor can software substitute for energy density.
Britain’s electricity system – as Germany’s and California’s – is expensive because policy has mandated the large-scale deployment of dilute, weather-dependent energy sources while simultaneously suppressing the very technologies — large coal, natural gas and nuclear plants under central dispatch — that provide reliability at scale.
To blame “system design” while defending Net Zero is to rearrange the analytical furniture in a sinking ship. The UK’s electricity crisis is not a bug in an otherwise sound energy transition. It is the bill coming due for two decades of policy that elevated climate symbolism over energy realism. The Bank of England Governor Andrew Bailey warned last week that “both climate change and the policies implemented to tackle it (Net Zero) are acting as ‘headwinds’ that are slowing down the global and UK economy”. This is quite the opposite of “Net Zero is not the problem for the UK’s power system”, the subtitle of ‘Outlook 2026’.
A version of this article was first published in the Daily Sceptic https://dailysceptic.org/2026/01/20/the-uks-electricity-crisis-is-not-caused-by-system-failure-its-caused-by-net-zero/
Dr Tilak K. Doshi is the Daily Sceptic‘s Energy Editor. He is an economist, a member of the CO2 Coalition and a former contributor to Forbes. Follow him on Substack and X.
I’m in Commiefornia and we pay 36¢ off peak to >56¢/KWh during peak demand with rates ever increasing. California peak demand pricing would be off the top of the chart of electricity pricing even though the US is on the chart at 18¢/KWh.
As Kermit sang…It’s not easy being Green…or affordable.
Buy a really long extension cord and hook up to BC. Tier 1 rate is CDN 11 cents per kWh or ca. US 7 cents per kWh.
Off peak pricing means cooking and eating dinner after midnight, and not cooling your home when you get home from work, rather waiting until it’s time for be to do that.
By then all you’d need is opening your windows and running window fans…if you haven’t melted to the floor in the intervening hours.
And the power companies (e.g., PG&E) don’t have the money to upgrade 100 year old infrastructure and keep vegetation down, and we end up with disasters like the Camp Fire (RIP Paradise CA)
Maui comes to mind. Diverted maintenance funds for SV projects.
Interesting that the system problems only occured after the redsign.
The Blackout in Spain was also not caused by renewables but by solar activity.
but ” System Design” is generally the better choice as significant Solar anomalies are way too rare for cheap and perpetual excuses.
And System Design rhymes so well with Systemic Racism, therefore half of the potential to trigger a pavlov reflex was already implemented in the brains.
and the ice storm in Texas in ’21, which killed 300 people, was not caused because Texas was getting over 40% of its electricity before the storm from wind & solar, but virtually nothing when the storm hit – right
“the potential to trigger a pavlov reflex”
Well said.
The Orwell rule:
They say: Net Zero is not the problem for the UK’s power system.
We deduce: Net Zero is the problem for the UK’s power system.
Easy when you know how.
There is no fool like an educated fool.
Margaret Atwood
The problem with any backup battery system is how do you recharge them once they have gone flat. Once power is restored you need extra electricity to recharge them over and above the amount to run the country.
So you need three electricity sources, your basic (unreliable) generation system, batteries and another system to recharge the flat backup batteries once the wind starts blowing again.
Average BESS duration in the UK is just under 2 hours. The plans for 2030 are to increase this to 3-4 hours. So that’s ok then 🙂
The Moss Landing BESS system, the largest in the world, currently provides 0 hours of electrical storage for over 1 year now.
Typical Leftist response. Deflect the blame for poor decisions by pointing fingers.
funny how there was no problem before
They forget for that finger pointing at whatever there are three pointing back at them.
Lobbyist Speak is designed to say the opposite of the truth in support of selfish gains while sounding like the answer to crafted problems. It works best among policymakers who set aside good public policy ethics.
It’s a good thing AI Data Factories showed up in the tech economy for the UK and NY to blame them instead of the real causes of high electricity prices.
Curtailment is not a minor issue.
The UK just set a new record for wind curtailment in 2025: over 10 tera-watt-hours of curtailment. This is over 3% of the total UK annual electricity consumption, to give an idea of scale.
2024 was 8.3 terawatt-hours of wind curtailment, a record over 2023 and its 4.36 terawatt-hours, in turn a record over 2022 and its 3.89 terawatt-hours of curtailment.
The costs have been over 300 million GBP each of the last 3 years; the only reason the costs are not skyrocketing is because the per MWh price has fallen from the 60s and 70s of cents UK to the 30s…which is still way too high.
If you think it is bad now, wait till the whole grid is required to work on weather dependent sources.
If I incorrectly use the average performance of the generators, (which ignores the fact that the output often falls to zero), then it could be expected that you would need to OVERBUILD generation to the tune of 3:1 for wind and 5:1 for solar, (rounded, of course).
At these levels of overbuild, you would expect that on an ideal day, the curtailment for wind will be 200%, a fair hike above the present 3%. Whilst the ideal day doesn’t happen often for wind. It happens most days for solar, (in summer). Should the UK market be expected to be paying curtailment fees of 800% of solar during the summer daytime?
What does that do for the forward power price estimate(s)?
“The Renewable Energy Foundation estimates that the UK has spent approximately £220 billion (2024 prices) on renewable energy subsidies since 2002, with current annual costs running at £25.8 billion, now comprising roughly 40% of total electricity system costs. These are not marginal accounting artefacts. They are the dominant drivers of rising bills.”
How is it that Government subsidies cause bills to rise? The subsidies are payments by the Government to wind and solar builders and operators. I believe that the money comes from the receipts of taxes that could be spent on something more useful but are not. Or are you thinking that the subsidies are billed back to electricity consumers as a part of their bill? Are not the costs of backups, voltage and frequency stabilization, added long distance power lines and other requirements are what cause much higher bills?
In some localities, the cost of subsidies are allocated not to the taxman but to the energy retailer. In these situations, the energy cost, (associated with the subsidies), are directly applied to the retail consumer bill.
As a singular example, refer to Oz and the mandate for the retailer to purchase weather dependent generated power from the grid. This simple requirement has resulted in the non-weather dependent generators being shifted down the selection pile and hence making them less available for purchase, in other words, their unit costs of production rise as their available sales diminish. And the consumer is forced to pay for the higher cost of weather dependent generators.
https://ipa.org.au/read/the-hidden-green-energy-tax-forcing-australians-to-prop-up-foreign-owned-renewables
No matter which way the money flows, it is us either through bills or taxes (or hardships) that pick up the tab.
We pay the operators.
We pay taxes.
The government does not generate revenue.
Governments are Robin Hood forward or reverse on steroids.
and even bigger problem, as Germany is finding out, is that the high energy costs results in the industries becoming uncompetitive and resulting in deindustrialization of the country which leads to mass unemployment – soon to be followed with civil war/regime change
That’s the plan but even mention it and you’re called a conspiracy theorist despite the ongoing proof.
A side effect is much reduce tax revenues for the Government to waste.
Not to mention pitchforks and torches.
It’s very much like generating a narrative and then adjusting the data to fit that narrative.
Never let reality get in the way of a good theory 😉
Good theory? Good story? Or better, good lie.
Hobbling the horses and then blaming them for not running fast enough.
Is that the same horse that has an overbuild of 12 legs but only has an average of 4 working at any time?
Noting that it still has to carry all 12 legs at a profit. AND must also carry the moped for days when the wind isn’t blowing.
It’s not hobbled, it’s on life support.
Dieter Helm has been asked by two UK Governments this century to carry out energy reviews. He made many good recommendations to both. Despite his credentials both Governments said “thanks”and then put the review into the bookcase where it remains.
I read posts such as this and then have an encounter with someone with views similar to Adi Imsirovic, but without his training. Yesterday, I was informed that wind and solar facilities are the best and cheapest forms of grid electricity, and grid-scale batteries are inexpensive.
[An aside: Wind has dropped to nearly zero across the Pacific Northwest (PNW) of the USA – for many days. Via Path 65, the PNE sends energy to southern CA.]
Such encounters almost makes me a believer in the concept of “parallel universes”.
{I find the term “fungible electrons” pedantically troubling. Electrons in a copper wire have a drift speed of about ¼ millimeter per second while the energy travels at something short of the speed of light (another unhappy term). Maybe just call it energy.
The electric energy flow in an overhead high tension is mostly in the air around the wires – think energy in the magnetic field and electric fields surrounding the wires. It was Franklin who demonstrated that the energy stored in a Leiden Jar was stored in the glass.
“Fungible electrons” is a bit like “fungible water” on a continental scale. The Columbia and Mississippi rivers carry huge amounts of water, but getting that water to places like Las Vegas would be hugely expensive.
“The electric energy flow in an overhead high tension is mostly in the air around the wires – think energy in the magnetic field and electric fields surrounding the wires.”
I debate the “mostly” description. I do not contest the presence of EM fields around high tension wires.
The EM energy projects outward from the wire, not parallel to it. Otherwise antennae would not work.
The quantity of EM energy generated by current flow is a small fraction of the total energy.
Ohm’s Law. Maxwell’s Equations. Kirchhoff’s Law, and a long list of others are part of this..
We are a stubborn species. That views like this still exist after all our experience of the inadequacy of renewables is sadly predictable, but still astonishing.
As President Trump said’ only idiots buy windmills’. He also famously said’ I think you will find that it’s getting colder’. Correct on both counts.
Adi Imsirovic and people like him are the reason people today place so little value on the statements and views of experts, professionals and academics. It is to the point where we have been lied to by these mongrels so often that they mean nothing to us anymore.
I concede your point, but when looking at the chart, you seem to cherry pick the dots that you are calling out the names of states/countries for. There are some noticeable points that counter your argument (for whatever the reason). It is best to identify these also rather cherry pick the ones you wanted to highlight.
The three that i would come up with, and I did not use your sources but rather CHATGPT to come up with similar data points. I asked AI for Iowa, South Dakota, Texas, and California and it returned these values. They may not be associated with points on your graph, but does counter your overall point to a small extent.
Summary (Approximate % of solar/wind):
Summary (Average Prices in 2023 for electricity):
Good start but incomplete.
Size (sq. mi.) of the State.
Population of the State.
Electricity consumption by state.
What generates the balance with imports segregated and what are the electric rates for those interstate connections.
Are the WTG and SV all encompassing or just gridded usage?
Also, what data sources did CHATGPT used?
AI uses the internet for data searches.
It does not always or reliably use the real data.
If someone posts bogus data and it is copied and repeated 1000 times, but someone else posts read data and it does not get the chains or republications, AI will go with the preponderance of the evidence without scrubbing to see if the data sources are copies or unique.
“Good start but incomplete”
I am not sure if your response was for my comment or the OP analysis? I only used the same variables the OP used for his chart that I had questions about. Rather than question my source, why not provide your data that disputes mine or supports the OP post? .You wont find it.
States with a high penetration of wind energy (largely Midwestern states) tend to have low electricity prices. You will find that California is the real outlier in the US where high rate of renewable energy correlate with high electrical prices, and that is because it is a failed state with failed energy policies and failed D governance.
As far as the additional variables you wanted me to include, I think you can look at Texas as the best example, because my understanding is they import/export very little electricity from the US grid, unlike California. Texas is largely independent from the rest of the U.S. power grid, meaning it operates its own electrical grid without being tightly interconnected with the US grid. .
“The real cause lies in poor market and system design, not decarbonisation.”
I note the real cause lies in system design.
WTGs and WVs overlaid on the existing power system suffers greatly from poor system design.
It is akin to fitting a round peg in a square hole. Yes it goes it, but there are significant gaps and it is not a good fit by any stretch of the definition.
UK putting up solar power systems in a land known for fog and low solar energy? Bad system concept, poor system design.
UK laying 1500 km of undersea cable to transport electrons from remote WTGs to where the demand is located? Bad system concept, poor system design.
Batteries have their uses, but grid scale battery facilities are good for only one purpose – roasting hotdogs.
Need I go on? No. Most of you know the full story.
Rube Goldberg would be amazed.
Too many people think they solved a problem by patching the symptoms, adding more and more stuff trying to get it to work.
Putting on band aids rather than identifying and correcting the root cause never solves a problem. It merely gives a moment of respite before the problem rears its ugly head again.
Battery fires and country wide blackouts are merely the foreshadowing of a doomed future. Doomed unless we get back to sound engineering basics warried to sound financial management. Good science would be welcomed into that marriage.
To make matters worse, there are very few and far between forums where intelligent and mature conversations about these things are permitted.
I am grateful to Anthony and everyone else (with noted exceptions, aka trolls) for keeping sanity alive on these pages.
Well, I’m just a simple Brit – no doctorate here. But I remember that not so very long ago electricity was cheap. No need for subsidies, dynamic pricing or demand management. I don’t think I need that doctorate to figure out why this has changed..