More RE could save UK £420m

UK government energy policy will need to spend £420m more than necessary in low-carbon subsidies between 2020 and 2025 unless it commits to supporting a wider range of renewable energy, according to the think tank Green Alliance

The think tank said in a new report – Beyond subsidy: how the next levy control framework can get us there – that the UK Chancellor can fix the problem in his 2016 Budget by supporting more renewables technologies in the early 2020s and creating conditions that will allow most technologies to be subsidy free after 2025.

The study said that the Levy Control Framework – the government’s cap on low carbon generation – “risks exaggerating by over six times the 2025 subsidy for low carbon generation, because the calculations incorporate the cost of building any generation, whether low or high carbon”

It also claimed that current government policy is heading for a “low carbon generation gap” of at least 20TWh, because it is slowing down the delivery of renewable energy projects.

Green Alliance said new nuclear power stations will replace retired nuclear plant and so only offshore and onshore wind, tidal and solar power can achieve the necessary level of low carbon power by 2025

The report’s lowest carbon scenario also has the lowest subsidy costs – falling to £0.23bn in 2025, compared with £0.33bn with current policy.

“This is because the low-carbon scenario is achieved with a package including cheaper onshore wind, solar and electricity saving,” the think tank said.

Lead author of the study Dustin Benton said: “Subsidy free renewables are within sight, but their cost is exaggerated by current policy.

“To meet carbon targets and protect consumers from higher costs, we should focus on how to make all renewables cheaper than other forms of power, which is already the case for the best solar and wind projects.

“The Chancellor should use the 2016 Budget to correct this imbalance in UK energy policy and, by doing so, can reduce the cost of low carbon subsidy. Our research suggests that this can be largely eliminated by 2025 if policy backs the cheapest and most scalable projects.”

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