Where does the ‘energy transition’ end?
Director's column
24 Mar 2025
Written By Andrew Montford
This post attempts to explain what happens when you take an electricity grid powered exclusively by gas turbines, and progressively add windfarms. Will you save money?
The answer is, ‘It depends’.
At least at first, it depends mostly on the gas price. You add the (very large) fixed capital and operating costs of a windfarm, but you save some fuel costs in the gas units. The capex and fixed opex of the gas units are not saved because you can’t close any power stations down, just in case the wind doesn’t blow.
This means:
If gas prices are low, it’s unlikely there will be a net saving, so every windfarm you add simply increases the overall cost of the system. Since demand is unchanged, unit costs (and therefore selling prices) have to increase.
If gas prices are high, however, you will indeed make a saving. In these circumstances, for every windfarm you add, the overall system cost goes down.
https://www.netzerowatch.com/all-news/does-wind-power-save-money