According to a report by the Department for Energy Security and Net Zero (DESNZ), offshore and onshore wind is set to be 61.4% cheaper than gas in 2025.
The Electricity Generation Costs report disclosed that gas prices are estimated to rise to £114/MWh by 2025, compared to 2021 prices. Both offshore and onshore wind prices are predicted to stand at £44/MWh whereas large-scale solar could be £41/MWh.
The figures for renewables have decreased since the previous edition of the report, released in 2020, with offshore wind touted to cost £57/MWh, onshore wind to cost £46/MWh and large-scale solar expected to cost £44/MWh.
Gas has seen a sharp rise in cost in comparison to the 2020 edition with the Department for Business, Energy & Industrial Strategy (BEIS), which later became DESNZ, having predicted that the cost of gas would stand at £85/MWh. It is worth noting that this was taken from pricings prior to the COVID-19 pandemic in 2021 and the more recent energy crisis.
The increase in gas prices running parallel with a fall in renewable generation prices, is expected to continue this trend throughout the coming decades. In 2030, gas is predicted to cost £139/MWh whereas offshore wind could cost £39/MWh, onshore wind could cost £41/MWh and large-scale solar could see a reduction to £37/MWh.
Turning our attention to 2040, this trend persists. Gas is expected to cost £179/MWh, offshore and onshore wind are expected to hit the same levels as solar in 2025 standing at £41/MWh, whereas solar could become the cheapest renewable generator with it predicted to cost £30/MWh. This would mean that solar is 83% cheaper than gas in 2040.
