  This paper studies the impact of wind generation on market prices and system
costs in the UK between 2013 and 2014. The wider effects and implications of
wind generation is of direct relevance and importance to policy makers, as well
as the grid operator and market traders. We compare electricity generation from
Coal, Gas and wind, on both the wholesale and imbalance market. We calculate
the system cost of wind generation (government subsidies and curtailment costs)
and the total energy costs. For the first time in the UK, we calculate the
Merit Order Effect on spot price due to the wind component and show a $1.67\%$
price decrease for every percentage point of wind generation (compared to the
``zero-wind'' price). The net result of total costs and price savings is
roughly zero (slight positive gain). We also consider the effect of not having
either an onshore or an offshore wind component. We show that the Merit-Order
Effect savings are heavily reduced, leading to an outgoing cost of wind
generation in both cases. It is therefore important to have a significant total
percentage of wind generation, from both onshore and offshore farms.
