In other words when there isn't much wind, the average price that National Grid has to pay to buy electricity is higher (£54.50 per megawatt hour) than when the wind is strong (£49.90 per megawatt hour). Closer examination of the results also shows (not noted in the table above) that at the very highest levels of wind output the price tends to rise slightly.

When there is less than 500 MW of wind, the price averages £55.8, about £3.1 more than the average price in the table above. This contrasts with the £7 difference I estimate in the main body of the article

You can argue that this calculation is in fact too harsh for a reason that works in the opposite direction to 'jjk's hypothesis. High levels of wind output tend to occur in the winter, when the price of power is typically higher. So I think the table above probably sets a lower limit on the impact of wind on power prices.

On average, I think we can say, wind makes a difference to UK power prices for immediate delivery of somewhere between £3.1 and £7 per megawatt hour. Even at the lower level this washes away a large fraction of the consumer subsidy for wind.

Original article follows

You can argue that the subsidy for wind power in the UK costs the country almost nothing. The reason is that when the wind blows, wholesale electricity prices are lower than they would otherwise be. On the typical day when wind is producing about 7% of the UK’s electricity, the market price of power is about £7 per MWh less than when the air is completely still.

If, on average, wind power depresses the wholesale price of electricity by £7 for each megawatt hour consumed in the UK, the total impact over the year is about £2.3bn. [1] The total subsidy for renewable electricity paid by electricity consumers this year is capped at £3.3bn. This includes solar and other technologies such as landfill gas, not just wind. The subsidy cost for wind - about £2-£2.5bn - may well be less than the downward impact wind has on electricity prices. The net impact on consumers may therefore be close to zero. In effect, the whole burden of wind subsidy falls on the fossil fuel generators because they obtain lower prices than they otherwise would.

There's one obvious objection to this glib analysis: most electricity isn't traded just before it is needed. Much of the power that drives your home or office has been bought or sold months, or perhaps years, in advance. However, in the long run lower prices for immediate delivery seep through to the wider market. If you were an electricity retailer and noticed that power traded at perhaps £45/MWh just before it was needed, would you buy electricity months in advance at a higher level?

How do I get to the conclusion that wind depresses prices by an average of £7/MWh? Every half hour, National Grid has to balance the electricity market by buying or selling electricity. Total generation must match total demand, including losses in transmission, or otherwise the voltage on the UK network would move outside the strict limits that are set. The price that National Grid pays or the price it receives in the open market is recorded.[2]

Also recorded each half hour is the amount of wind power that is generated by the major wind farms as well as the output of all other power stations. We can easily calculate the percentage of total generation that is provided by wind farms, offshore and onshore. Then I drew a graph that compares the price the National Grid paid to buy electricity with the percentage of the UK’s power provided by turbines.

This is what the chart looks like for the period between June 2012 and 19th January 2015 (the middle of last week).

Chart 1