Delays to renewables investment ‘could cost £2.6bn’

Consumers could have to pay an extra £2.6 billion for energy by 2025 if the UK Government continues to hold back the ability for renewables to bid for contracts under the CfD auction system, according to a new report.

The Green Alliance environmental think tank said the saving could be made compared to the cost of building more gas-fired power stations.

Its report said 65TWh of renewable power was ready to be developed, which could meet 20% of the UK’s electricity consumption and could be built at less than the cost of gas plants.

The Green Alliance said investment in renewables had fallen by 95% between 2017 and 2020 following changes in UK Government policy.

The think tank added that ministers need to “change course” and hold auctions for additional clean power contracts on top of the latest CfD auction which saw offshore wind a big winner.

The report points out that onshore wind is currently banned from taking part and solar power was last allowed to compete in early 2015.

Cheaper than nuclear

The report said the falling cost of renewables will also become a challenge for the nuclear industry by the late 2020s.

It predicted that Great Britain could “easily” meet its carbon budgets with only two additional nuclear plants and could manage without any further stations being built in the 2020s once Hinkley C is completed.

Under current plans, spending on nuclear will rise to five times the amount invested in offshore wind by 2025, followed by a steep rise in costs to 2030.

The alliance estimated that the cost of nuclear power would need to fall to below £65/MWh if it was to compete with renewables, even given the system of cost of integrating alternative energy into the grid.

Energy efficiency

The Green Alliance said: “Our analysis shows the government should commit to continued support for renewables, along with energy efficiency measures, to cut carbon faster and keep consumer energy bills down.

“This strategy would meet energy demand without the need for additional nuclear capacity.

“The report also highlights that nuclear costs would have to come down by almost a third to be competitive with renewables.”

> Download the report