Earlier today I read an extraordinary article on the Guardian website, the heading to which made an equally extraordinary claim: “Wind power has cut £104bn from UK energy costs since 2010, study finds – Reduction comes from energy generated from windfarms and lower cost of gas owing to lower demand”
Because I believe there is so much wrong with both the Guardian article and the study on which it is based, I intended to critique it in some detail. However, Paul Homewood has beaten me to it, and has made such a good job of demolishing the claims, that below I content myself in making a few additional observations.
The study abstract can be found here, and from there the whole study can be downloaded. When we sceptics challenge the narrative, the response is often that until we have produced a peer-reviewed study to back up our claims or doubts, we can’t expect to be taken seriously. It’s interesting, then, that the Guardian rushed to publish the claims made by this study, even though (as the study itself tells us) “This article is a preprint and is currently undergoing peer review by UCL”.
I would suggest that the final paragraph of the abstract tells us that the study has political aims, and therefore its “findings” should be read and construed in that light:
The current funding model, where electricity users bear the cost while gas users benefit, raises fairness concerns. Ultimately, wind investment has significantly lowered fossil fuel prices, underscoring the need for strategic, equitable energy policy that aligns with long-term national interests. Our study demonstrates that the energy transition is not a costly environmental subsidy, it is a compelling financial investment.
The study observes that “Over the past decade, generation costs have fallen significantly”, and to back up that claim shows a graph showing the movement in strike prices under the CfD Allocation Rounds since 2015. It’s true that the strike prices have fallen since 2015, but it’s also true that they have risen steadily since AR4 in 2022, and it appears that the costs of AR7 will show a significant rise on AR6 numbers.
The study talks about the Merit Order Effect (MOE), whereby “wind generators will always supply electricity based upon wind strength, regardless of market conditions. It is this feature of wind generation that directly lowers electricity prices…”. This, it is claimed, means that “wind generators receive a lower average price (called the “Capture Price”) than gas generators, and this difference has grown over the last decade. As wind penetration increases, it has led to lower relative prices for wind generators, in effect, a “cannibalisation” of its own market.” The problem with this analysis, which seeks to claim that it’s unfair on renewables companies, is that it ignores the reality that it is the non-dispatchable nature of renewable energy which means that gas has to ramp up and down on demand to cope with the intermittency of renewables. That in turn means that the owners of gas-fired electricity generating plants have to run them less efficiently (and therefore more expensively) than would otherwise be the case; and they have fewer opportunities to make money from running them. Thus, when they have to ramp up at short notice in order to keep the lights on, thanks to the intermittency and unreliability of renewables, they inevitably have to charge more for the electricity they generate than would otherwise have been the case. This is a feature, not a bug, of the way the system now operates, and it’s the problem with relying ever more heavily on renewables, not a benefit, as claimed.
The paper tries to suggest that the benefit of lower electricity prices outweighs the cost of subsidies to the renewable energy companies. The first problem with this analysis is that our electricity prices have risen sharply as renewables have been added to the mix, so the claim of lower prices rings rather hollow. The authors also have to concede that “For the UK, (Shao et al., 2022), use the annual Marginal MOE to calculate the total consumer benefit from lower [sic] electricity prices, which they then compare with the annual cost of subsidies under the UK’s RO scheme. (Shao et al., 2022) conclude that the cost of subsidies was higher than the benefit from lower electricity prices by £7bn between 2009 and 2020.” They go on to say that a revision in 2023 found a net benefit after all, but only “by adding in the value of reduced carbon emissions, as priced by the EU Emission Trading Scheme”. Of course, those are made-up numbers, and electricity consumers certainly don’t see any benefit from the addition of such a cost – quite the reverse.
However, the key point I wish to make, in addition to those identified in Paul’s analysis, is the glaring omission which the authors themselves very fairly acknowledge, but which the Guardian article fails to mention at all:
This paper focuses on quantifying the wholesale electricity market as a proxy for generation costs. A common criticism of this approach is that in a similar way to the use of Levelized Cost of Energy (LCOE) (Lazard, 2025) it does not include all system costs (Moraski & Spokas, 2025). These include: Grid infrastructure costs as renewables are located further away from demand and intermittency costs including storage and peak load management (Dale et al., 2004). It is a very fair observation that this paper does not attempt a holistic system-wide evaluation of all associated costs of a type of generation, nor the additional benefits of wind energy such the positive economic impact on local communities [sic] (Glasson et al., 2022). It does not attempt to cover a number of related important issues of the economics of wind energy which are covered in other literature (Climate Change Committee, 2023; European Wind Energy Association, 2009) and deals with the narrower area of wholesale energy markets.
I would suggest that the failure to consider those issues, quite apart from the very sensible criticisms made by Paul Homewood, render the whole analysis meaningless, and the headline to the Guardian article utterly unjustified.
We have recently seen a campaign underway to seek to hide the costs of renewables subsidies by removing them from the price of electricity and either adding them to the price of gas or subsuming them in general taxation. It would appear that this paper, with its following claim, is aimed at supporting that campaign:
While wind generation delivers huge savings to UK consumers , the benefits are not uniformly distributed. As shown in Table 10, consumers of electricity pay 100% of subsidies, but receive only 18% of the net financial benefit. Meanwhile, natural gas users, who pay nothing toward wind investment, have enjoyed 82% of the benefit since 2010.
This is a claim which is as dubious as the claims that renewables not only help to reduce the price of gas but also that they have led to lower electricity prices. My advice to confused readers would be to read the study, then read Paul Homewood’s article, and, finally, consider the points made above, then make up your own mind. I know which version of reality I believe.
Climate Scepticism 
“Reduction comes from … lower cost of gas”. But wait, isn’t the reason behind Britain’s sky-high wholesale energy costs down to Britain’s reliance on gas: https://www.theguardian.com/business/2025/apr/20/why-the-uks-electricity-costs-are-so-high-and-what-can-be-done-about-it?utm_source=chatgpt.com.
LikeLiked by 1 person
That last quote had me scratching my head – “While wind generation delivers huge savings to UK consumers , the benefits are not uniformly distributed. As shown in Table 10, consumers of electricity pay 100% of subsidies, but receive only 18% of the net financial benefit. Meanwhile, natural gas users, who pay nothing toward wind investment, have enjoyed 82% of the benefit since 2010.“
Most households have electricity for most essentials, but heating is mostly by gas/oil combi boilers. So they pay “toward wind investment“. Can’t be bothered to delve further.
LikeLiked by 1 person
Doug Brodie,
Logic doesn’t seem to be the Guardian’s strong point.
First, they constantly tell us that electricity in the UK is expensive because of the high price of gas.
Second, electricity in the UK is cheap because of renewables, and gas is cheap because of renewables, so cheap that gas customers gain much more benefit from renewables than do electricity customers.
Square that circle if you can.
LikeLiked by 2 people
I don’t think anyone here is under any illusions about the Conversation, but just in case:
“Wind power has saved UK consumers over £100 billion since 2010 – new study”
https://theconversation.com/wind-power-has-saved-uk-consumers-over-100-billion-since-2010-new-study-266702
That didn’t take long.
LikeLike
More creative accounting:
LikeLiked by 2 people
Mark – 1st thing that caught my eye from the Conversation article you link to above was –
“Disclosure statement
Mark Maslin is Pro-Vice Provost of the UCL Climate Crisis Grand Challenge and Founding Director of the UCL Institute for Sustainable Aviation and Aeronautics. He was co-director of the London NERC Doctoral Training Partnership and is a member of the Climate Crisis Advisory Group. He is an advisor to Sheep Included Ltd, Lansons, NetZeroNow and has advised the UK Parliament. He has received grant funding from the NERC, EPSRC, ESRC, DFG, Royal Society, DIFD, BEIS, DECC, FCO, Innovate UK, Carbon Trust, UK Space Agency, European Space Agency, Research England, Wellcome Trust, Leverhulme Trust, CIFF, Sprint2020, and British Council. He has received funding from the BBC, Lancet, Laithwaites, Seventh Generation, Channel 4, JLT Re, WWF, Hermes, CAFOD, HP, Royal Institute of Chartered Surveyors, John Templeton Foundation, The Nand & Jeet Khemka Foundation, Quadrature Climate Foundation.
Colm O’Shea does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.”
Seems Mark Maslin is a man in demand. I can’t be bothered to dig into how much funding that amount of grants comes to & over how many years, but I’m sure he deserves all the help he can get for his work.
Will now read the article itself.
LikeLike
dfhunter,
In fairness to Mark Maslin, he does indeed make full disclosure. However, and while trying very hard to play the ball rather than the man, looking at his interests it’s difficult to imagine that he’s entirely disinterested when it comes to his views on climate change and energy policy. At least I can say that I am genuinely disinterested in these topics – I have no connections, financial or otherwise, to any organisation on either side of the climate change/energy debate. I just want what’s best for our country and for our environment. I’m sure those such as Mark Maslin also want that, and I attribute no wrong motives to him, but I struggle to put his interests to one side when reading what he writes.
LikeLiked by 1 person
Mark – I agree with you re Mark Maslin. I’m not implying anything wrong with the grants, but as we know if you hold/reinforce the consensus view the grants seem to flood in.
Found this partial quote from the article strange/bordering on nonsensical –
“Wind power is a public good
Wind generators reduce market prices, creating value for others while limiting their own profitability. This is the mirror image of industries with negative environmental consequences, such as tobacco and sugar, where the industry does not pay for the increased associated healthcare costs.
This means that the profitability of wind generators is a flawed measure of the financial value of the sector to the UK. The payments via the UK government are not subsidies creating an industry with excess profits, or one creating a financial drain. They are investments facilitating cheaper energy for UK consumers.”
As for the Wind power has saved UK consumers over £100 billion since 2010 number quoted, I find it difficult to believe that figure, but then I’m not an expert.
ps – the comments under the article are interesting.
LikeLike
Forgot to give this link from the article – Britain’s Electricity Explained: 2024 Review | National Energy System Operator
Partial quote –
“A record-breaking year
Over the last year, various factors aligned to deliver new wind and carbon intensity records. These include:
Lowest carbon intensity year, averaging at 125 CO2/kWh
Highest yearly zero carbon generation at 51%
Minimum carbon intensity record of 19g CO2/kWh on 15 April
Maximum wind record of 22,243MW on 15 December
Maximum wind record of 22,523MW on 18 December, providing 68.3% of Great Britain’s electricity”
You can almost hear Ed strumming “we are the champions”
LikeLike
dfhunter,
Yes, this paragraph leapt out at me too:
This means that the profitability of wind generators is a flawed measure of the financial value of the sector to the UK. The payments via the UK government are not subsidies creating an industry with excess profits, or one creating a financial drain. They are investments facilitating cheaper energy for UK consumers.
A study that reaches a conclusion that flies in the face of what we are all experiencing is a study that deserves to be questioned, to say the least.
As for The Conversation article, Mark Maslin’s interventions (against critic Norman Rides) are borderline hilarious, given his own (admittedly fully declared) interests:
All of us on this discussion would appreciate it if you provide some insight to your background and expertise – as your comments are not linked to any account – whereas others are open about who they are and what the represent.
And
The higher energy prices you are paying is because the price of natural gas went through the roof in part due to the Russian invasion of Ukraine. And as our paper has shown very clearly you would have paid even more if it was not for the massive expansion of UK offshore wind – £104 billion more. And your lack of transparency over who you are and who you work for – suggests to everyone else that you comments are politically motivated – and are not ground in the economic facts. Shame as the Conversation can be a place of exchange of different ideas.
LikeLiked by 1 person
David Rose on this topic in UnHerd.
LikeLiked by 1 person
I’m not going to read it, nor the Conversation. But two points. 1. Maslin’s group should have waited until it was published before going to the Conversation, surely? 2. If supply is elastic, then the savings proposed would be illusory. If they are restricting their savings to the brief enormous price spike in costs, when wind was 9 times cheaper than gas, well this would also have been reduced with more gas supply, e.g. in the North Sea. What they are in fact pointing out is that you should not rely on geopolitical rivals for essential goods. Something that they might take into account re: wind turbines.
LikeLiked by 1 person
Thanks Jit,
Well worth a read – and he put it more succinctly than I managed to do!
LikeLike
“Has wind power saved UK households vast sums since 2010?”
https://cloudwisdom.substack.com/p/has-wind-power-saved-uk-households
…The presentation of the argument is a pure case of environmental dressing-up combined with modelling fluff. The logic would be no different if we had substituted all references to wind power in the paper by nuclear power or, indeed, coal generation. There is nothing special about wind power in the economic logic – it is simply a variant of implementing a buyer cartel to drive down the market price of an inelastically supplied commodity. But what correspondent for the Guardian would either understand the point or explain it if they did understand it? So, we get the usual outpouring of self-interested nonsense about renewable energy.…
…The dressing-up in environmental and renewable energy clothes may encourage an audience with no understanding of the basic economics but it doesn’t alter the logic.
None of this will prevent this and related articles being published in a well-known and peer reviewed journal such Nature Climate Change. After all, the dressing-up is exactly what the journal’s editors want to put out, as it will generate lots of publicity and citations. Such is the state of academic publishing today. One might at least hope that someone will ask the authors to point out that the net benefits have nothing to do with wind power. Indeed, they would have been even larger, because of savings in system costs, had there been a deliberate policy to promote nuclear or coal power.
However, any reference to alternative ways of exercising buying power in gas markets is likely to be very sotto voce and ignored by lobbyists. The dressing-up is the whole point of the exercise for them.…
…In this case any reader should ask why, if buyers can collectively influence the market price of gas, they don’t do so? Perhaps the answer is that the assumption is just wrong, or the effect is too small to justify the costs involved.
LikeLiked by 1 person
Mark – beat to it as usual 🙂
LikeLike
Jit – followed your UnHerd link & followed this Miliband related quote & link “Miliband is regularly found to be Labour members’ favourite Cabinet minister, but the headwinds against his policies are strengthening.”
The link dated 20th March, 2025 – Cabinet league tables: LabourList-Survation poll on members’ favourites – LabourList
Will not bore readers, can’t seem to cut/paste, but a few interesting standouts for me anyway –
Ed Miliband – +68.6
Angela Rayner – +62.95
Keir Starmer – +13.83
Rachel Reeves – -11.19
Interesting, even if out of date.
LikeLike
Paul Homewood states
An argument against fracking for gas is that it will not drive down gas prices as these are internationally determined.
LikeLiked by 1 person
Well worth a read:
“Taking the wind out of the Guardian’s sails
No, wind power has not saved Britain £104 billion since 2010″
https://thecritic.co.uk/taking-the-wind-out-of-the-guardians-sails/
...The authors begin by performing an act of economic vandalism: they delete all wind generation across Europe. Not just Britain’s turbines, but every wind farm from Poitiers to Poznań. This on its own is a huge red flag for a paper titled “Modelling the long-term financial benefits of UK investment in wind energy generation”. They then imagine that every megawatt hour of lost wind power would be replaced by burning gas. By 2023, they calculate, this windless Europe would require an extra 273 million cubic metres of gas per day — more than the pipeline gas Europe lost when Russia turned off the taps in 2022. Having created this counterfactual catastrophe, they claim that the additional demand would have driven up gas prices across the continent, and that back in the real world where wind farms do exist, Britain avoided those higher prices. In their telling, wind didn’t just lower the price of electricity. It lowered the wholesale cost of gas itself.
To put numbers on this fantasy, they regress European gas prices against European gas demand from 2010 to 2021 and claim to find that every extra million cubic metres per day of demand raises prices by 0.4 per cent. They multiply this by the 273 million cubic metres per day of “missing wind” and declare that gas prices would have been roughly 56 per cent higher, on average, without renewables, and as high as 109 per cent higher in 2023. In crisis years like 2022, the formula predicts gas prices of £56 per MMBtu (Million British Thermal Units) — double what we actually paid on average during the war-driven price shock. Instead of accepting that their linear rule doesn’t hold under stress, the authors intervene. They write that they “conservatively” limited the price impact to £10 per MMBtu, roughly the average price after the crisis, and use that capped figure.
This is not analysis. It’s spreadsheet storytelling….
LikeLike