Q2 2024: Introduction

The general election on 4 July brought in a new government, and with it changes across all areas of policy. Energy and climate change featured prominently in the Labour manifesto, with “making Britain a clean energy superpower” one of their five core missions. This includes committing more money to renewables, planning reforms to get infrastructure built faster, and creating a new state-run energy company. This issue of Electric Insights explores what these changes mean for Britain’s electricity sector.

Share of Britain’s electricity generation during each quarter since 2020.

The Government’s boost to renewables comes just as they hit a major milestone. Since April, wind has been the country’s largest source of electricity on an annual basis, overtaking gas. This means 2024 is likely to be the first ever year when a fossil fuel was not the largest source of power, and would make Britain only the sixth country in the world to be primarily powered by wind.

The energy price crisis has faded from the news headlines, but its effects are still being felt throughout the economy. Some aspects are beginning to improve though: household energy bills fell by 25% over the last year (meaning negative inflation). However, Ofgem’s price cap is set to increase 10% in October, and longer-term effects on commodity prices and interest rate rises mean that renewable energy could remain more expensive for years to come.

One way that electricity prices have come down is that Britain’s 9 GW of interconnectors are now importing cheaper power from abroad, whereas last year we were exporting to help France overcome capacity shortages. Over the last quarter, Britain imported a record 20% of its electricity demand, coming close to overtaking gas in the generation mix.

Gas-fired power generation fell sharply to its lowest level in over 15 years. Just 13 TWh of electricity came from gas over the quarter, 25% less than the previous minimum on record. Britain’s solar PV panels produced more than 10 GW for the first time ever, and fossil fuels fell to a record low of supplying less than 1 GW for the first time ever. These changes signal that National Grid is getting closer to its 2025 ambition of being capable of running with zero carbon emissions.

Altogether, the increase in renewables, clean imports and nuclear meant that the electricity produced last quarter was cleaner than ever. Carbon emissions reached averaged below 90 g/kWh in April – a sign of positive things to come.