Record wind generation – good news for the environment and your bills?

Record wind generation – good news for the environment and your bills?

January saw a huge record-breaking rise in wind generation, which at one point provided almost a quarter of the UK’s electricity. Though wholesale costs for renewables are lower, other charges relating to this type of generation could be higher. What’s the overall impact on your bills?

The UK achieved a record for wind output last month, with supply peaking at over 10 GW for the first time ever. On 17 January, wind was providing nearly a quarter of the UK’s electricity. Soon after this, on 24 January, wind output averaged 9.8GW across a 24 hour period – another, new all-time high.

wind generation

Growth in wind capacity

This record output comes as the UK is seeing an increasing level of installed onshore and offshore wind capacity. Over 17GW is operational, compared with under just 3GW a decade earlier. Furthermore, additional projects are in planning, with another 4GW currently under construction. This will lead to wind generating even higher proportions of the UK’s electricity. As a result, we can expect more wind outturn records in the near future.

installed wind generation

 

Decreasing dependency on fossil fuels

Increasing numbers of large wind farms, and other low carbon alternatives, are reducing dependency on fossil fuels. Back in April, the UK experienced its first coal-free day since the industrial revolution. This is good news for consumers, as the cost of operating renewable generation sites is much lower than large-scale fossil fuel power stations.

Good news or bad news for power prices?

Wholesale power prices of renewable generators are much lower, as there’s no fuel cost. Higher renewable availability can drive down wholesale prices, leading to lower costs for businesses. However, at the same time, non-commodity costs (NCCs) for subsidies designed to increase renewable capacity will also rise. These costs are passed on to consumers. As a result, the overall impact on customer bills could actually be an increase in prices.

Control your costs – webinar

NCCs are the part of your bill that is a mix of transmission, distribution, and other regulated charges, paid on top of the wholesale cost of energy. Your energy bill is set to increase again soon, as changes to distribution charges will take effect in April. By 2020, NCCs will account for the largest part of your energy bill at 66%. Back in 2010, the same portion only accounted for 37% of your bill. It’s therefore vital to take control of these costs.

The good news is you can take action to reduce the impact on your bills. We hosted a webinar (Feb 2018) to explain how you can cut and control your NCCs.

To listen, you can download the recording here.

Ross Moffat

Posted by on Thursday, the 1. February at 15.08

Ross Moffat has been a part of the Market Intelligence team at Utilitywise since early 2014. His responsibilities include delivering Market Intelligence reports to clients and managing the Utility Insights Twitter account.Ross has a first class Honours degree in Business and Marketing from the University of Stirling.