Renewables cutting electricity prices by a quarter
6 October 2025
Wind power is helping to drive down Britain’s electricity costs, with new analysis from the Energy and Climate Intelligence Unit (ECIU) showing that it reduced wholesale prices by as much as a quarter in 2024 – savings that could roughly match the financial support wind farms receive through energy bills.
By generating power without fuel costs, wind farms are increasingly pushing expensive gas-fired power plants off the system and reducing how often gas sets the price of electricity. Gas previously dictated the price almost 100% of the time, but that figure has now fallen to around 85%, returning to pre-pandemic levels.
According to the analysis, wholesale electricity prices were up to 25% lower in 2024 thanks to wind generation, equivalent to around £25 per megawatt hour (MWh). Without this impact, average day-ahead prices of £73–£76/MWh could have reached £96–£101/MWh. These reductions also filter through to longer-term energy trades, meaning the savings likely extend across all electricity supply.
Dr Simon Cran-McGreehin, head of analysis at ECIU, says the findings demonstrate how renewables are protecting households from volatile international gas markets:
“Energy experts have long known that the invisible hand of the market would see renewables with no fuel costs reduce the overall cost of electricity by pushing gas power out of the market, and this was starkly highlighted in the gas crisis.
“People may not realise it, but their bills would be higher today without the increasing role that wind and solar farms running on free sunshine and wind are playing by reducing our dependence on gas power. This also means things could have been even worse during the peaks of the gas crisis, had it not been for renewables – indeed, anything that avoids gas generation helps to limit prices, including interconnectors and our old nuclear power plants.”
While electricity prices can spike when wind output is low, Dr Cran-McGreehin said these moments are outweighed by the consistent savings renewables deliver the rest of the time.
The analysis suggests that the savings delivered by wind power – around £27–£28/MWh at the retail level – are roughly equal to the support paid to wind farms through the Renewables Obligation and Contracts for Difference schemes.
Adam Bell, Director of Policy at Stonehaven:
“This is immensely valuable work that showcases the extent to which we’d all be paying more if we hadn’t built out our wind fleet over the last twenty years. Pushing older inefficient gas plants out of the market is how wind holds down costs.”
The report is available here: Marginal Gains: how wind is pushing gas out of the power market and cutting costs
