Gas-fired power output in Great Britain has fallen to its lowest level in two decades, according to a new report from Montel Analytics.
The study revealed that gas-fired generation totalled 72.6TWh in 2024, a steep decline from the 86.8TWh recorded in the previous year and significantly lower than the 111.4TWh generated in 2022.
Montel Analytics found that the main factor behind the drop was the continued growth of renewable energy, which delivered 118.1TWh in 2024 – up from the 116.9TWh recorded in 2023. Overall, renewables, including biomass, contributed around 45% to the generation mix, with an average output of 13.5GW.
Wind proved to be the biggest contributor, accounting for 70% of renewables and achieving a record average of 9.43GW, although constraints on transmission capacity meant some wind output had to be curtailed.
Interconnectors providing more electricity than before
Another key element in the reduced reliance on gas-fired generation was a sharp rise in electricity imports. Average net imports via Great Britain’s interconnectors reached 3.8GW last year – a 40% increase compared to 2023 – with France (2.2GW) and Norway (1.1GW) being the two largest sources.
The amount of electricity imported and exported through interconnectors is likely to rise in the coming years, with eight more interconnectors already in the planning or proposal stages. That includes a new interconnector between Ireland and Great Britain, dubbed Greenlink, which is due to come online later this month.
If all eight interconnectors are built, it would double the number of interconnectors that are available to the UK, and would give us greater leverage to export our renewable energy, as well as import renewables from other nations. It’s already worth noting that of the eight interconnectors currently operational, four of them became operational within the last four years. That includes the Viking Link, which was powered up around this time last year.
Continued volatility in gas prices
Montel Analytics’ figures also suggest that the gas market saw varied price movements throughout 2024. While gas prices initially fell in January and February, they trended upwards later in the year due to factors such as intermittent production outages in Norway, geopolitical tensions in the Middle East, disruptions caused by the ongoing war in Ukraine, and cold winter snaps.
Despite the fluctuations, average gas prices for 2024 dropped by 16% compared with 2023 levels, down to £28.63/MWh. Meanwhile, day-ahead electricity prices followed a similar overall pattern but fell more sharply, ending 2024 at an average of £72.58/MWh, a 23% year-on-year reduction.
The report highlighted a notable increase in negative pricing events, with 139 hours of negative prices during 2024 – the highest since such occurrences were first recorded in 2019. This figure is significantly higher than the 86 hours noted in 2023. That showcases an increasing need to either export our clean electricity, or at least harness it at a later time with more widespread deployment of energy storage.
Phil Hewitt, Director at Montel Analytics, commented, “Last year gas prices were lower on average than in 2023, despite rising again from March onwards. These increases were recorded despite reduced demand for gas-fired generation, with total output at its lowest level for at least 20 years as a result of very high levels of renewable generation and a significant rise in electricity imports through the interconnectors, particularly from France and Norway.
“Renewable output would have been higher because almost 10% of potential wind output could not be used because of transmission system constraints. Meanwhile, the importance of electricity transfer through the interconnectors has been accentuated following Ofgem’s recent approval of five major new undersea energy links, which will further strengthen connections between Britain and Germany, Belgium, the Netherlands and Ireland.
“The initial decline in gas prices was driven by elevated wind generation as a consequence of storms Isha and Jocelyn in the early part of 2024, although prices generally rose during the rest of the year. At this time of year, gas price spikes are not uncommon as additional gas reserves are often needed to meet higher-than-usual demand during periods of cold, calm weather. The recent cold snap sparked a media frenzy recently when British Gas owner Centrica announced that the UK had less than a week of gas reserves in store although National Gas, which owns the UK gas network, has insisted that storage levels remain healthy.”
With coal gone, what does the future hold?
Montel Analytics noted that 2024 saw the end of coal-fired generation in Britain, as the final coal station at Ratcliffe-on-Soar closed in September after 142 years. That’s a major milestone for cleaning up our electricity system, which is why it’s important to look at what the future will hold for our electricity system – and many have pointed to not only increasing renewables’ share of the pie, but also a growing role for nuclear power.
Unfortunately, 2024 saw a slight decline in nuclear output, reaching a historic low of 38.2 TWh, but that can largely be attributed to outages and delayed restarts of reactors. That’s why the completion of Sizewell C could not come soon enough, even though costs have doubled since 2020, with it now estimated to cost £40 billion.
Overall for 2024, renewables dominated the generation mix, contributing 44.8% of total output. Gas accounted for 27.5%, followed by nuclear (14.5%), imports (12.6%), and coal (0.6%).