| | | AI Overview
Yes,
new renewable energy and associated battery storage systems are generally cheaper than new and often existing fossil fuel generation in Great Britain. This is supported by recent 2025 reports from the International Renewable Energy Agency (IRENA) and investment banks like Jefferies and Lazard.
Cost Comparison
- Renewables are Cheaper to Generate: Once built, the operational cost of generating power from renewables (wind and solar) is very low because the "fuel" is free. In contrast, gas generators have significant and volatile fuel costs, along with a carbon price, which makes their electricity more expensive on the wholesale market.
- New Projects LCOE: Lazard's 2025 analysis for the US (which has global relevance) indicates that utility-scale solar PV and onshore wind are significantly cheaper on a Levelized Cost of Energy (LCOE) basis than new gas peaking or coal plants. A specific investment bank analysis found that solar-plus-battery storage systems have a lower LCOE ($77/MWh) than combined-cycle gas turbines ($87/MWh).
- Wholesale Price Impact: Renewables typically bid the cheapest into the wholesale market, meaning they are used first. The final market price is often set by the most expensive source needed to meet demand, which is frequently gas, causing prices to be higher than the generation cost of renewables.
- Storage Costs Falling: The cost of battery energy storage systems, crucial for managing the intermittency of renewables, has declined by 93% since 2010, making hybrid renewable-plus-storage solutions increasingly cost-effective compared to fossil fuel alternatives.
- Fossil Fuel Volatility: The reliance on global fossil fuel markets makes the UK's energy supply vulnerable to price volatility, as seen during the energy crisis where record-low offshore wind prices were nine times cheaper than the prevailing high gas prices.
In essence, building new renewable generation with storage is now a more affordable and stable option than relying on new or existing fossil fuel plants in Great Britain
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It's been that way for a while.
Analysis: UK renewables still cheaper than gas, despite ...
Carbon Brief
Sep 8, 2023 — Wind and solar remain the cheapest way to generate electricity in the UK as gas prices are around 100% higher than before the global energy ... |
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