top of page

Renewables are the cheapest option for the future!

The rise in investment for renewable assets has led to price projections over the next eight years being lower than originally expected.

With the Russo-Ukrainian War sparking something of a resurgence of reliance on renewables technology, Cornwall Insight’s latest GB Power Market Outlook shows that investment in renewables projects has led to lower price projections in the UK, when compared to May this year. However, the ongoing energy crisis and high gas prices mean that power prices are still well above the average pre-2021.

It was originally predicted that prices will stay above the £100/MWh mark until 2030, but the latest report predicts that prices could drop below the benchmark as soon as 2026, eventually dropping to £80/MWh in 2029. At the forefront of the projections is the Russo-Ukrainian War, with the conflict speeding up the uptake of renewables across the continent.

This uptick in renewables employment is happening at the same time as new interconnectors, used to export clean energy across country borders, coming online – the UK almost trebling its interconnector capacity since 2010.

And because of the new demand for renewable energy in the UK, there’s an increased competition which is expected to drive down prices further in the late 2020s. Russia’s cut-off of gas to the rest of Europe has led to governments around the continent to re-evaluate the security of their energy supplies. With their main source taken away, those countries are now looking at different ways to sustain their energy needs – with renewables leading the way.

It’s hoped that, with Ofgem’s price caps in place, wholesale power prices will be reduced, which will then be passed onto the maximum traffic suppliers can set. However, prices are anticipated to remain at high levels for the foreseeable and they’re likely to remain above pre-2021 predictions for the rest of the decade. It’s because of this that by increasing the adoption of clean energy, the UK could strengthen its hold and curb long-term prices, and it will need to continue its actions on low carbon generation, while pushing other measures to ensure security for energy is prolonged.

While the energy industry plans to invest billions into the clean energy transition over the next ten years, it’s been maintained that targets could be reached faster if planning restrictions for onshore renewables projects were relaxed or if there was more clarity on regulations and frameworks for nuclear projects, carbon capture storage or new hydrogen. Unfortunately, the government has yet to act on these, and as the analysis shows, barriers need to urgently be removed to enable the country to invest in energy efficiency as quickly as possible.


bottom of page