UK smashes energy record by harnessing ‘cheapest’ power source

Anas Sarwar hits out at Sturgeon over offshore wind plots

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The UK hit a major energy milestone in 2022 as windfarms produced a record amount of the country’s electricity, according to National Grid. Wind-powered electricity made up 26.8 percent of electricity generation in 2022, up from 21.9 percent the year before, figures from National Grid ESO indicate. And earlier this week, National Grid announced the smashing of another record after the percentage of zero carbon electricity generated onto the grid hit a stunning new record of 87.6 percent.

Last January, wind-powered electricity was responsible for its biggest-ever share of the energy mix, accounting for 64 percent of generation. Analysis from energy experts has previously shown that offshore wind energy was around nine times cheaper than gas prices at the time.

The Carbon Brief’s analysis revealed that the Government had granted a number of contracts to offshore wind farm producers to generate electricity at an average price of £48 per megawatt-hour (MWh) That was nine times cheaper than the £446/MWh cost of running gas-fired power stations during that period. 

It comes after Russia’s war in Ukraine triggered global gas price spirals, which had a major knock-on impact on energy billpayers in the UK. In fact, Britons are now forking out double the amount there were in 2021 because of this.

Policymakers and energy experts have repeatedly called for Britain to boost its homegrown clean power sources to free itself from volatile fossil fuel markets so Britain can boost its security and help drive down prices. But while windfarms made up a significant portion of the energy mix in 2022, gas-fired power stations also hit a new record. 

They accounted for 38.5 percent of the energy mix, a three-year high. This made it the largest source of generation despite gas prices surging astronomically last year. The energy sources also still heat up to 80 percent of British homes, according to the Office for National Statistics.

However, gas prices plunged to pre-Ukraine war levels this week for the first time since the conflict began after warmer weather across Europe calmed fears of suspected shortages. 

The European gas contract for the month ahead dropped to €76.78 (£68.07) per megawatt hour on Wednesday, the lowest price seen in over 10 months. before closing at a higher price of €83.70 (£74.20), according to the data company Refinitiv. 

In the UK, natural gas futures dipped below 170p per therm – the typical unit of heat energy – down from over 500p immediately after the Russian invasion, hitting a high of above 650p in August.

But the plummeting prices are not expected to have an immediate impact on household bills. 

Professor Paul de Leeuw, an expert from the Energy Transition Institute at the Robert Gordon University, told “Typically utility companies buy gas and electricity for their customers months in advance and will lock in the price to reduce the risk.

“As such our monthly bills reflect the market price when the utility company acquired the energy rather than today’s prices. The current energy price cap is based on average prices over a six-month period, so for bills to go down, we do need to see the wholesale prices coming down in the short, medium and longer term (i.e. in the spot market and in the future market).”

However, forecasters have predicted that bills could start to drop from July thanks to the lower prices. 

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Analysts at Investec forecast that the energy price cap – the maximum annual tariff for gas and electricity – could drop to as low as £2,600 per year from July. It marks a £500 drop from the wealth manager’s previous forecast of £3,100 per year. 

But despite this, the UK still has a targetting of phasing out gas altogether as it scrambles to reach net zero by 2050. But in so doing, it needs to ensure that the energy produced from renewables is as efficient as possible. 

For instance, much of the windpower produced by turbines in the UK when the grid is at full capacity and the wind is blowing strong.  Experts argue that Britain needs to build more battery storage facilities to combat this problem. These allow the excess power to be stored and sent back to the grid when demand is high. 

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