Eight things you need to know about renewables ahead of the Budget

1. Renewables are a UK success story. They have rapidly increased as a proportion of UK electricity supply since 2010.1_crop

2. Investment in renewable electricity has been growing, with the offshore wind sector alone attracting an estimated £9.5 billion between 2010 and 2014.2_crop

3. Renewables are a source of jobs. There are now more than 77,000 direct jobs in the industry, with many in former industrial areas.3_crop

4. The costs are coming down: many technologies could be cheaper than gas by the mid 2020s, given the right policy framework. Graph shows cost per MWh (unit of electricity generated).4_crop

“Wind is now the cheapest technology in the UK and this means that old rules of thumb, such as ‘renewables are expensive’ or ‘unreliable’ need to be updated.” Seb Henbest, head of Europe for BNEF

5. Opinion polls show a steady, high level of public support for renewables. Support has remained above 75 per cent, despite extensive negative media coverage.5_crop

6. The climate for investment in all forms of power generation is uncertain.

“To unlock investment, we need a clear long term framework – so companies can plan for construction projects that will last into the next decade.” Open letter from Carolyn Fairbairn, director-general of the CBI, co-signed by 18 major companies, January 2016

7. It’s forecast that UK investment in renewable electricity will fall. By September 2015, 23 large scale projects, representing around 2.7 GW of energy, had been abandoned.6_crop

8. The 2016 Budget needs to confirm support for renewables into the next decade:

Why?

  • Renewables boost energy security because they are quick to deploy, have a proven track delivery record, and do not rely on fossil fuel imports.
  • They can leverage billions of pounds worth of investment in cleantech and vital infrastructure. Danish developer DONG announced in January 2016 it would spend an additional £6 billion in the UK by 2020, following the government’s commitment to 10GW of new offshore wind in the 2020s.
  • A broader technology mix and steady deployment will bring costs down and improve competition.

How?

  • Determine the level of support available beyond 2020, and set expectations for private sector investment during this parliament.
  • Provide £2.7 billion extra investment to upgrade and decarbonise the UK’s electricity system. Of this, the subsidy for low carbon generation compared to new gas plants would be only £0.53 billion, falling to £0.23 billion by 2025. (See Green Alliance report, Beyond subsidy)
  • Continue to support more expensive renewables so they can become subsidy free, but protect consumers by setting fair cost reduction expectations.
  • Give the most competitive renewables (onshore wind and large scale solar) subsidy free contracts, so they can be built where communities support them.

This information comes from Renewables investment: building on UK strengths at the 2016 Budget, published by Green Alliance

 

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