have been agreed for offshore wind projects, which has led to an assumption that there has been an equivalent reduction in the underlying costs. Due to the structure of the contract for difference arrangements wind generators pay the government when power prices exceed the strike price. Wholesale power prices averaged £57/MWh in 2018 and £113/MWh in 2021 before spiking above £400/MWh in 2022. Offshore wind has historically been more expensive than onshore wind, but in 2016 it was predicted that it would have the lowest levelised cost of electricity in the United Kingdom in 2020 when a carbon cost was applied to generating technologies. In the 2022 AR4 CFD auction, offshore wind cleared at an average price of £37.35/MWh versus onshore winds average price of £42.47/MWh (both 2012 prices). Historically, wind power had raised costs of electricity slightly. In 2015, it was estimated that the use of wind power in the UK had added £18 to the average yearly electricity bill. This was the additional cost to consumers of using wind to generate about 9.3% of the annual total (see table below) – about £2 for each 1%. Actual cost performance A statistical and econometric analysis of a majority of onshore and offshore windfarms built in the United Kingdom since 2002 with a capacity of more than 10MW has been performed by a former professor of the School of Economics at the University of Edinburgh on behalf of an anti wind power organisation. It finds that the actual cost of onshore and offshore wind generation has not fallen significantly. Rather, capital and operating costs per MW have increased, the latter driven by higher than expected frequency of equipment failure and preventative maintenance associated with new generations of larger turbines. The study concludes that, after current contracts guaranteeing above-market prices expire, expected revenues from generation will be less than operating cost. If confirmed, this would require financial regulators to impose heavy risk weightings on loans to offshore wind farm operators, effectively making them too risky for pension funds and small investors. Variability and related issues Wind-generated power is a variable resource, and the amount of electricity produced at any given point in time by a given plant will depend on wind speeds, air density and turbine characteristics (among other factors). If wind speed is too low (less than about 2.5m/s) then the wind turbines will not be able to make electricity,