Upcoming wind farms slated for construction by the end of this decade are expected to contribute less than £5 to household energy bills, while also helping to stabilize price fluctuations, according to a prominent energy analyst.

A historic number of renewable energy initiatives have successfully secured contracts in the recent annual auction, with 131 projects approved to provide clean power.

Developers of these projects have established a “strike price,” ensuring a baseline payment for the electricity they produce. Should future wholesale market prices dip below this agreed amount, developers will receive a supplementary payment. Conversely, if prices exceed the strike price, the excess will be returned to consumers as a savings.

Nine offshore wind projects achieved a guaranteed price of £54.23 per megawatt hour, which is 19% lower than the maximum allowed price of £73, adjusted to 2012 rates, and an increase from £44 in the previous year.

According to forecasts from Cornwall Insights, payments to renewable energy producers are projected to add just 68p annually to consumer energy bills by 2027-28, rising to approximately £4.59 by the end of the decade.

These estimates are based on an anticipated wholesale energy price of £82 per MWh in 2027-28, with a gradual decrease to around £72 per MWh by 2030.

However, as additional larger offshore wind projects are activated in subsequent years, the cost impacts may become more significant.

Lee Drummee, a senior analyst at Cornwall Insight, commented that any anticipated rise in bills would be “relatively minimal,” emphasizing the long-term benefits of enhancing renewable energy sources.

“Although any rise in household bills is unwelcome, especially for families already facing financial strain, it is essential to recognize the broader advantages of transitioning to a renewable-focused energy landscape,” he stated.

Drummee also noted, “The recent energy crisis has highlighted the dangers of depending too heavily on international energy markets, which can significantly affect household energy costs. By increasing our own domestic energy production, we lessen our vulnerability to price volatility spurred by global events.”