Electric Insights – A landmark year for Britain’s power system, new Government AI plans and ‘Dunkelflaute’

Wind becomes Britain’s largest source of electricity in 2024

2024 was another landmark year for Britain’s power system. Wind became the largest source of electricity, the first time in its 120-year history that a fossil fuel was not the top spot.

Going right back to the foundation of our electricity system, coal was the largest source of generation each year until the 1984 miner’s strikes. Since then, either gas, oil or coal has been the largest source, until finally in 2024 a form of clean power became the single largest source.

Wind droughts show the need for low-carbon flexible generation

“Dunkelflaute” must surely be an early contender for the 2025 Oxford Dictionary word of the year. A German word meaning “dark doldrums”, it’s used in the energy world to describe a dark, cold, calm spell of weather during which very little energy can be generated with wind or solar power.

In December and January, Britain faced two spells of so-called Dunkelflaute. The first, hitting around 12 December, saw wind – the largest energy source in the UK last year overall – drop to 6% of total supply. In response, gas power stations ramped up to their highest output ever recorded, supplying more than 73% of Britain’s electricity and sending power prices soaring.

This winter has demonstrated some of the challenges we must address in reaching a clean power system over the next five years. Options for low-carbon flexibility are urgently needed – both investing in new technologies and maintaining existing sources – as electricity supply and demand become more dependent on the weather.

Why are Britain’s power prices the highest in the world?

The UK is currently stifled by electricity prices that are among the highest in the world. UK industry is spending 60% more per unit of electricity than any other European nation, but the reasons behind this are complex. Despite renewable energy expanding from 15% a decade ago to over 40% of the grid mix today, the structure of the electricity market means that fossil fuels, and particularly gas, continue to set power prices.

Several factors keep the UK’s electricity prices high. These include Britain’s infrastructure, policy costs, environmental costs and wholesale costs. Gas currently sets prices despite renewables providing most of the energy, sparking conversation on pricing reform.

The Government’s AI plans will supercharge electricity demand

A new industrial revolution is underway, with companies and countries competing for dominance in artificial intelligence (AI). Rather than factories and coal, this race needs data centres and lots of electricity. Worldwide, data centres consume more power than the UK and this is set to more than double by 2030.

The Government agreed to take forward all recommendations from the its recently commissioned AI Opportunities Action Plan, including to expand the UK’s sovereign compute capacity by at least 20x by 2030. A new AI Energy Council will be appointed to assess energy demands for this plan and accelerate investment in clean energy for data centres.

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