Growth in UK renewables cuts electricity prices by up to 25%

Wind power has driven down electricity prices by weakening the dominance of gas generation in setting wholesale market rates, according to new analysis from the Energy and Climate Intelligence Unit (ECIU).  

The report finds that gas-fired generation set day-ahead wholesale price around 85% of the time in 2024. This was down from the nearly 100% in 2020–2021 reported in previous analysis by the UCL Institute for Sustainable Resources, when the UK’s reliance on gas left it exposed to global market volatility. The shift marks a return to pre-pandemic levels and before the gas crisis following Russia’s incursion into Ukraine, notes the ECIU.

According to the report, wind power reduced the wholesale price of electricity in the UK by as much as 25% last year – equivalent to around £25/MWh – by weakening the link between power prices and volatile international gas prices. The report describes this as a ‘hidden saving’ for consumers, pushing older and less efficient gas peaker plants off the grid and lessening the system’s sensitivity to gas price spikes.

Without these savings, the average day-ahead power price of £73–76/MWh in 2024 could have been as high as £96–101/MWh, the analysis suggests. Similar savings are likely to be seen in longer-term energy trades, it adds, meaning that wind power’s impact on bills could roughly match the £27/MWh of support on bills for wind farms via the Renewables Obligation and Contracts for Difference (CfD) auction schemes.

Dr Simon Cran-McGreehin, Head of Analysis, ECIU, comments: ‘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.’

Commenting on the findings, Adam Bell, Director of Policy at Stonehaven consultancy, says the report underlines the financial value of the UK’s wind build-out: ‘Pushing older inefficient gas plants out of the market is how wind holds down costs.’

Renewables surpass coal as world’s biggest source of electricity for first time ever

Renewable energy overtook coal as the world’s leading source of electricity in the first half of this year, marking a major turning point in the clean energy transition, according to a new report from Ember.  

The analysis shows renewables grew by 363 TWh (+7.7%) to reach 5,072 TWh in 1H2025, while coal generation fell by 31 TWh to 4,896 TWh. As a result, renewables’ share of global electricity rose to 34.3% (from 32.7%), while coal’s share fell to 33.1% (from 34.2%).

The report attributes much of this growth to solar power, which supplied 83% of the increase in global electricity demand. Solar generation rose by a record 306 TWh (+31% year-on-year). Together, solar and wind grew fast enough to meet rising global demand while displacing fossil generation – leading to a 0.2% fall in power sector emissions.

In the same period, global electricity demand rose 2.6% (+369 TWh), clean power met almost all of that growth and began to replace fossil sources. Ember found that coal use dropped 0.6% and gas 0.2%, partially offset by a small rise in other fossil fuels, for a total decline of 0.3% in fossil-based power generation.

The world’s four largest economies – China, India, the EU and the US – remained central to the global power picture. China continued to dominate clean energy growth, adding more solar and wind capacity than the rest of the world combined and cutting its fossil generation by 2% (–58.7 TWh) in the first half of the year.

In India, renewable expansion outpaced demand growth by three times. Demand rose just 1.3% (+12 TWh) compared to last year’s 9% surge. India’s record solar and wind additions of 24 GW and 11 TWh respectively drove coal generation down 3.1% (–22 TWh) and gas 34% (–7.1 TWh), the report finds.

In contrast, fossil generation rose slightly in the US and EU. In the US, electricity demand growth outstripped renewable additions, while in Europe weaker wind and hydro output forced greater reliance on gas and coal.

Ember concludes that half of the world is already past the peak of fossil-fuelled electricity generation. It goes on to contend that the clean power boom now has the potential to keep pace with demand growth in most economies.  

Sonia Dunlop, CEO of Global Solar Council, says the findings mark a ‘historic shift’: ‘Solar and wind are no longer marginal technologies – they are driving the global power system forward. The fact that renewables have overtaken coal for the first time marks a major turning point. But to lock in this progress, governments and industry must accelerate investment in solar, wind, and battery storage.’

Global renewable power will more than double by 2030

In a separate report, the International Energy Agency (IEA) predicts that global renewable capacity will more than double by 2030, increasing by 4,600 GW, even as the sector navigates headwinds in supply chains, grid integration, financing and policy shifts.  

Solar PV remains the primary growth driver, propelled by falling costs and faster permitting. It is expected to deliver around 80% of total capacity additions this decade. Wind power alone is projected to almost double its global capacity to over 2,000 GW by 2030, despite cost pressures and delays in project approvals.  

The IEA notes a revival of interest in pumped-storage hydropower, providing crucial flexibility for variable renewables. It is forecast to grow nearly 80% faster over the next five years compared with the previous period. Geothermal installations are also ‘on course to hit historic highs’ in key markets including the US, Japan, Indonesia and several emerging economies.

However, the Agency’s latest forecast for 2025–2030 is 5% lower than last year’s, reflecting slower progress in several major markets. The US saw its projection cut by almost half due to policy shifts – including the early phase-out of federal tax credits, import restrictions and a suspension of new offshore wind leasing.

China, on the other hand, continues to dominate the renewables landscape, accounting for nearly 60% of global capacity growth to 2030. Although the country’s move from fixed tariffs to competitive auctions has slowed project economics, China is still expected to hit its 2035 wind and solar targets five years early, says the IEA.

India is forecast to become the second-largest growth market for renewables, behind China, with capacity set to expand 2.5 times within five years. This growth will be fuelled by higher auction volumes, increased support for rooftop solar and faster hydropower permitting.

In the EU, a strong surge in utility-scale solar PV installations will see the region double its renewable capacity between 2024 and 2030, despite a weaker forecast for offshore wind, predicts the report. That performance is driven by strong corporate power purchase agreement (PPA) activity in Germany, Spain, Italy and Poland. The Middle East and North Africa region also sees a notable upgrade, according to the analysis, with growth expectations up 25%, driven largely by Saudi Arabia’s rapid solar rollout.

The report highlights growing strain on electricity systems as renewables expand. Increasing instances of curtailment and negative pricing point to an urgent need for new grid investment, storage capacity and flexible generation, says the IEA. Far more investment will be required to ensure secure, efficient integration, warns the Agency.

‘As renewables’ role in electricity systems rises in many countries, policy makers need to play close attention to supply chain security and grid integration challenges,’ comments IEA Executive Director Fatih Birol. Global supply chains for solar PV and rare earth elements used in wind turbines remain heavily concentrated in China, accounting for more than 90% of production in key segments through to 2030. While new investments are emerging in other regions, diversification remains limited, notes the report.