Jan 22, 2025
Electricity prices in the UK have surged to a two-year peak as wind energy production declines.
Low wind speeds have led to the highest power prices in the UK in two years on Tuesday, with forecasts indicating that wind generation will reach its lowest point on Wednesday since September 2023, according to Bloomberg models.
On Tuesday, the day-ahead power price in the UK reached $296.28 (£241.49) per megawatt-hour (MWh), while the day-ahead price for peak evening demand surged to $760.68 (£620.00) per MWh.
As wind energy now constitutes the largest portion of electricity generation in the UK, periods of low wind speeds typically cause spikes in electricity prices.
For the first time ever, wind power surpassed natural gas to become the largest source of electricity generation in the UK for an entire year in 2024, as reported by the National Energy System Operator (NESO) earlier this month.
In its 2024 electricity review, NESO noted that last year, wind power accounted for 30% of electricity generation, marking the first year it was the dominant source.
Moreover, renewables generated over 50% of Britain’s electricity for four consecutive quarters up to the third quarter of 2024 for the first time, averaging 51% in 2024, according to the system operator.
In 2024, natural gas made up an average of 26.3% of power generation, nuclear power contributed 14%, and solar energy represented 5% of the UK's electricity generation.
A significant milestone occurred last year with the closure of the last operating coal power plant in the UK, located at Ratcliffe-on-Soar, which was shut down at the end of September, ending 142 years of coal-fired electricity production in the country. This made Britain the first G7 nation to fully phase out coal.
As the power system becomes greener, the UK is now experiencing electricity price spikes during high demand in winter when wind generation is low.
In recent months, electricity prices in several countries in northwest Europe have surged due to decreased wind power generation.
On Tuesday, the day-ahead power price in the UK reached $296.28 (£241.49) per megawatt-hour (MWh), while the day-ahead price for peak evening demand surged to $760.68 (£620.00) per MWh.
As wind energy now constitutes the largest portion of electricity generation in the UK, periods of low wind speeds typically cause spikes in electricity prices.
For the first time ever, wind power surpassed natural gas to become the largest source of electricity generation in the UK for an entire year in 2024, as reported by the National Energy System Operator (NESO) earlier this month.
In its 2024 electricity review, NESO noted that last year, wind power accounted for 30% of electricity generation, marking the first year it was the dominant source.
Moreover, renewables generated over 50% of Britain’s electricity for four consecutive quarters up to the third quarter of 2024 for the first time, averaging 51% in 2024, according to the system operator.
In 2024, natural gas made up an average of 26.3% of power generation, nuclear power contributed 14%, and solar energy represented 5% of the UK's electricity generation.
A significant milestone occurred last year with the closure of the last operating coal power plant in the UK, located at Ratcliffe-on-Soar, which was shut down at the end of September, ending 142 years of coal-fired electricity production in the country. This made Britain the first G7 nation to fully phase out coal.
As the power system becomes greener, the UK is now experiencing electricity price spikes during high demand in winter when wind generation is low.
In recent months, electricity prices in several countries in northwest Europe have surged due to decreased wind power generation.