Renewable electricity is set to become the clear economic winner over natural gas by 2028 to 2029, according to new analysis from the Renewable Energy Association.

The findings, published in the Renewable Cost Analysis Report 2025, show that even after accounting for grid upgrades, transmission, storage and balancing costs, scaling up renewables under a Clean Power 2030 pathway delivers stronger long-term value than continued reliance on gas.

Unlike traditional Levelised Cost of Energy comparisons, the REA model incorporates full system costs to reflect real world conditions.

Two scenarios were examined.

The Clean Power 2030 pathway assumes annual investment of around £40 billion to expand solar, wind, storage and networks while cutting unabated gas use to below five per cent.

The alternative No New Renewables scenario keeps wind and solar capacity flat and relies on natural gas to meet additional demand, resulting in lower upfront capital costs but higher ongoing spending on fuel imports.

The analysis concludes that from 2028 onwards renewables become the net economic winner, even before factoring in improved energy security, reduced exposure to volatile international gas markets, cleaner air and lower carbon emissions. When employment impacts are included, the economic case strengthens further.

Between 2024 and 2030 the Clean Power 2030 pathway is projected to create nearly 145,000 net new jobs, particularly in engineering, electrical installation and maintenance.

The REA says these roles will reinforce domestic supply chains and redirect spending away from imported liquified natural gas into UK industries and communities.

The modelling assumes flat wholesale gas prices over the next five years. Even in a scenario where gas prices fall by 25% between 2025 and 2030, the economic advantage of renewables is delayed by only one year when excluding job benefits.

The REA is calling for continued policy stability and investor confidence to maintain momentum, alongside interim measures to ease electricity bills until the wider economic benefits of renewable investment are fully realised.