Wind power has cut £104bn from UK energy costs since 2010, study finds | Wind power

Wind power has cut at least £104 billion in UK energy costs since 2010, a study has found.

Gas users are among the biggest beneficiaries, according to the study.

A study by University College London found that between 2010 and 2023, energy produced by wind farms caused electricity bills to fall by around £14.2 billion compared to what they would have been if gas had been needed to produce the same amount of electricity.

However, the reduction in gas costs that could be attributed to wind generation – due to reduced demand and no need to build new infrastructure – was much greater, at around £133.3 billion.

During the same period, consumers paid around £43.2 billion in green grants, taken from electricity bills rather than gas bills. The net result was a £104.3 billion reduction in the UK’s energy bills over a 13-year period, according to the researchers.

The boom in renewable energy production across Europe has made gas demand – and therefore gas prices – lower than they otherwise would have been, and means power companies have less need to build expensive new gas-fired power plants, the analysis says. The way the UK energy market works also means that gas-fired power stations are effectively allowed to set the price of electricity.

The analysis applied to the period 2010-23, leaving aside the lingering impacts of rising gas prices in early 2022, when Russia invaded Ukraine.

Colm O’Shea, a former hedge fund manager, now a masters student at UCL and lead author of the report, said: “Far from being a financial burden, this study demonstrates how wind generation has consistently delivered substantial financial benefits to the UK. To put things in context, this net benefit of £104 billion is higher than the £90 billion extra pounds that the UK has spent on gas since 2021 due to rising prices linked to the war in Ukraine.

“This study demonstrates why we should reframe our understanding of green investment from a costly environmental subsidy to a high-return domestic investment. »

Mark Maslin, professor of earth system science at UCL, said UK consumers would benefit more from reforming the electricity market to reflect the reality that wind generation reduced bills. “At some point the UK government will need to decouple gas and electricity prices,” he said. “This would mean gas prices would reflect global markets, while electricity prices would reflect savings from wind and solar power. »

Ana Musat, policy director at RenewableUK, the wind sector trade body, said: “This research highlights the long-term economic benefits for UK plc of investing in renewable energy generation. The only way to permanently reduce energy costs is to minimize our exposure to volatile fossil fuel prices globally and increase the share of electricity generation from clean sources local.”

The government disappointed the wind industry and renewable energy advocates on Monday by setting a lower amount of available subsidy than some had hoped for in an auction for new offshore wind capacity. Only around £1.1 billion was auctioned.

Musat said: “The wind industry alone employs 55,000 people and this figure is expected to double to 110,000 by 2030. Each gigawatt of offshore wind generates between £2 billion and £3 billion of private investment in the UK. This is why it is so important that we secure significant volumes of new wind and solar capacity in the auctions for energy contracts clean, with a budget set at an ambitious level to allow us to make the most of the opportunity to stabilize the cost of energy.”

Michael Shanks, the Energy Minister, said: “Our new competitive auction process will allow us to buy the right amount of clean energy at the right price on behalf of the British people, so we can take back control of our energy. »

Separately, an analysis by think tank Energy and Climate Intelligence Unit found that in the ten years since the Paris Agreement was signed in 2015, renewable energy production has seen a much greater increase than was anticipated at the time.

In 2015, BP predicted that non-fossil fuels would account for 38% of global electricity generation by 2035, but they already account for 41%. Solar and wind production is now four times what the International Energy Agency predicted in 2015.

The deployment of electric vehicles has also increased faster than expected: the 2015 goal of 100 million electric vehicles on the roads by 2030 will likely be reached in two years.

Ed Miliband, the energy secretary, said: “Clean, locally produced energy is the right choice for families, industry and the nation for many years to come. Wind power is cheaper, cleaner and safer than new gas, helping us to lower bills for good.”

“And with a new competitive process to secure more wind power in our next renewable energy auction, we will take back control of our energy and bring the next generation of opportunities to Britain’s coasts and heartlands.”