Natural renewables electricity acts as a buffer against gas volatility

Updated on 13 May 2026 by:

Vander Caceres, Senior Market and Competitor Insight Manager

 

Natural renewable electricity generated in the UK by wind and solar assets reached a new quarterly record in Q1 2026, helping to buffer the impact of gas price volatility.

Wind (28TWh) and solar (2.5TWh) generated a combined 30.6TWh of electricity - more than in any previous quarter - and accounted for 39% of the UK power mix (including imports).¹

When other renewable sources are included, namely biomass and hydro, renewables contributed 47% of total electricity generation in Q1 2026.

This marks a continued shift in the UK generation mix, with low-carbon sources playing an increasingly central role in meeting demand and reducing exposure to international fuel markets.

UK electricity generation by source¹

Wholesale prices rise following escalation of Middle East conflict

UK business gas and electricity (baseload) prices for Summer 2026 remained below 80 p/th and £80/MWh for much of Q1 2026, before rising sharply in early March following an escalation of the Middle East conflict.

By the end of March, UK gas and electricity (baseload) prices for Summer 2026 had increased by 106% (to 137 p/th) and 43% (to £102.7/MWh) respectively compared to the start of the year.²

This highlights the continued sensitivity of UK energy prices to global geopolitical events, particularly in gas markets, which remain a key price-setting fuel for electricity.

UK Summer 26 forward gas and baseload electricity prices²

Why the impact could have been more severe

According to separate analyses by the Energy and Climate Intelligence Unit³, Carbon Brief⁴ and Ember⁵, the increase in wholesale prices could have been more severe without the contribution of renewable generation.

In particular:

• Higher renewable output reduced the need for Liquefied Natural Gas (LNG) imports, which saw significant price increases in global markets.
• Increased volumes of lower-cost renewable generation helped limit the extent to which rising gas prices fed through into electricity prices.

While electricity prices are still often set by gas under the current market structure, the growing share of renewables is reducing reliance on gas and moderating the impact of price spikes.

Scale and momentum strengthen system resilience over time

The UK now has close to 55GW of installed wind and solar capacity (onshore, offshore and floating), with 15GW added over the past four years - around 37% of total capacity.⁶

This rapid build-out underpins the increasing role of renewables in shaping wholesale price dynamics.

UK cumulative installed wind and solar capacity⁶

As more renewable capacity is added, it is expected to further strengthen the UK’s resilience to global energy market volatility and support a more stable and predictable pricing environment for businesses over time.

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In this article

• Wholesale prices rise following escalation of Middle East conflict
• Why the impact could have been more severe
• Scale and momentum strengthen system resilience over time

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