UK renewables overtake gas as top electricity generator this winter

Generating the same amount of power using gas power stations would have required 68TWh of gas – equivalent to 7.4 million homes’ gas use for the entire winter, or 78 tankers of liquified natural gas (LNG). Put another way during the winter so far renewables have displaced the equivalent of a quarter (25%) of UK annual gas demand for power,16% of UK net gas imports, and a fifth (20%) of what we import via pipelines. [2]

The UK’s demand for electricity is set to grow in the coming years and while major new wind farms are set to help meet this growth, there are concerns around the grid infrastructure, such as power lines, keeping pace. Recent data released by National Grid has shown that payments to gas generators at times when network capacity limited the transmission of clean power in financial year 2022/23 – known as constraints payments – reached £485 million by November. This is the highest payment to any type of power generator, being four times that paid to windfarms (£122 million) [3].

Jess Ralston, Head of Energy at ECIU, said: “Wind has chosen a good year to overtake gas given how expensive gas has become and questions around its security of supply. As the wind industry expands alongside the rapid growth of battery storage, ever more of the electricity we use is homegrown but also plentiful enough to export. Speeding up investment in our power grid will enable more of this cheap, natural energy to flow to homes, so bringing down bills.”

More renewable power generation is helping to create export opportunities to supply Europe with electricity when its demand is high and the UK has a power surplus. Indeed, the UK became a net electricity exporter in 2022 for the first time since 2010. [4]

Other sources of generation, including nuclear and biomass have generated 20TWh over the winter period – using gas power plants instead would require 39TWh more gas, equivalent to 15% of annual UK gas demand for power.

Gas power plants that are paid to manage grid constraints and are used when other power stations develop faults or operate at lower capacities, are being rapidly replaced by new technologies. For example, battery storage capacity is up five-fold from last winter, currently standing at to 2.5GW (able to provide support at times of tight supply equivalent to around two of the nuclear power station Sizewell B) [5]. The pipeline of battery storage projects has doubled between 2021 and 2022, already exceeding National Grid’s expectations for 2035 [6] and the UK’s pumped hydro storage capacity is set to rise by 130% to 6.5GW. [7]

As the UK uses gas for around 40% of power generation and 85% of home heating, we have a higher gas dependency than any other country in Europe. According to the International Monetary Fund this combined with the UK having the least efficient housing stock in western Europe has meant UK households have been worst hit by rising energy costs. [8]

Renewables are also limiting electricity wholesale costs, partly by displacing expensive gas power plants that would otherwise set higher prices, and partly through Contracts for Difference (CfDs). Ofgem’s price cap means that CfDs are giving back £65 per household this winter, and £1.9bn in total, paying £1.1bn directly to households and saving the Government £800million on the cost of its price freeze. [9]