Recent forecasts suggest that the impact of new offshore wind farms on household energy bills will be relatively modest. According to predictions by Cornwall Insights, a leading energy consultancy, these renewable projects are expected to add only £5 to annual energy costs by the end of the decade. The latest auction round for renewable energy projects has seen a record 131 developers secure government contracts to deliver clean energy.
These contracts guarantee a minimum ‘strike price’ for the power generated, providing stability for both producers and consumers. Successful offshore wind projects have secured a guaranteed price of £54.23 per megawatt hour, which is 19% below the maximum allowed amount of £73 (in 2012 prices). This represents a significant reduction from the previous cap of £44 set last year.
Cornwall Insights forecasts that payments to green energy generators will add a mere 68p to annual energy bills in 2027-28, rising to £4.59 by 2030. These projections are based on estimated wholesale energy prices of £82 per MWh in 2027-28, gradually decreasing to £72 per MWh by 2030. Lee Drummee, a senior analyst at Cornwall Insights, emphasised the importance of considering the broader benefits of transitioning to a renewables-led energy system. He stated, “While any increase in bills would be unwelcome, particularly for households already under pressure, it’s crucial to consider the broader benefits of moving towards a renewables-led energy future.
” Drummee highlighted that the recent energy crisis demonstrated the risks of heavy reliance on international energy markets. He argued that increasing domestic renewable energy generation would reduce exposure to price volatility driven by global events, ultimately benefiting consumers in the long term. As more large-scale offshore wind projects come online in later years, the cost impacts are expected to rise. However, the overall trajectory suggests that the transition to renewable energy sources will have a relatively minimal impact on household budgets while contributing significantly to the UK’s clean energy goals.
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