Renewables projects could be £1.6bn over Government budget

The UK is spending billions of pounds of taxpayer money on 'generous' subsidies for renewable energy which is resulting in a 'significant oversupply' relative to EU renewable targets.


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That’s the conclusion of a new report published on Tuesday by the Renewable Energy Foundation (REF)- a charity which aims to “promote sustainable development for the benefit of the public”.

However the accusations were summarily dismissed by the renewables industry.

The REF report claims the UK has 49 GW of consented renewable capacity, either already built or awaiting construction, which would generate 147.7 TWh of electricity. This is 34% more than is necessary under EU 2020 targets.

And the subsidies required to fund this oversupply would cost £9.1bn – £1.5bn more than the Treasury’s Levy Control Framework limit.

The report authors wrote: “The scale of this prospective overshoot is all the more remarkable when it is recalled that the UK faced the largest incremental increase in renewable energy of any of the EU countries, with the exception of Malta and Luxembourg, and that between 25% and 40% of the EU-wide costs of the target would fall on the UK alone

It adds: “Even allowing for some attrition of consented sites, if all capacity in the pipeline were refused immediately, the electricity component of the 2020 target would still be exceeded.

“We infer that decision makers should now be giving greater weight to negative local impacts and less weight to the achievement of the European Union targets, which are in principle met.”

Reaction

The renewable industry was quick to respond, with Richard Black, director of the Energy and Climate Intelligence Unit saying: “I don’t agree with REF’s analysis, because it assumes that most if not all projects in the planning process will get built, which clearly isn’t tenable, especially as we move to a regime of competitive tendering.”

In fact, both solar projects that were scheduled to go ahead in 2015/16 under the Contracts for Difference scheme were cancelled when the developers admitted they could not produce electricity at the strike price they had bid for.

Black continued: “If the REF were right [about the oversupply], I’d think it would be a welcome boost for a Government that’s committed to decarbonising the UK economy along the pathway put forward by its statutory advisor, the Committee on Climate Change.

“As the Committee notes, we’re doing worse than we ought to be in areas such as energy efficiency, renewable heat and transport, so being somewhat ahead on renewable electricity would give the government some wiggle room, as well as providing a buffer in case of further delays with the proposed new nuclear power station at Hinkley Point.”

Around 35% of the UK’s electricity came from low-carbon sources in 2014.

Brad Allen

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