Despite tumbling prices and growing demand, further delays in the deployment of renewable energy in the UK could end up costing consumers £2.6 billion annually in 2025.
As we saw earlier this week with the announcement of the UK’s most recent Contracts for Difference competitive auction, in which offshore wind energy projects won contracts at record low strike prices, bringing costs below that of natural gas and nuclear, renewable energy projects now rank as not just cost competitive, but actively cheaper than traditional energy generation sources.
However, new analysis conducted by UK think-tank Green Alliance has found that without faster deployment of renewables, consumers could end up paying £2.6 billion extra annually in 2025. Specifically, the choice detailed in the new report, Closing the clean power gap, is between low-carbon renewable energy sources or natural gas sources. Green Alliance conclude that investing in and building low-carbon renewable energy sources like wind and solar will save consumers £1.8 billion per year in 2025, or £2.6 billion per year if energy efficiency is included (shown below as ‘Negawatts’ — a measurement of watts saved).
New build gas facing a carbon price versus renewables by 2025
Further, these savings will only double by 2030: Specifically, continuing to build renewables and increasing energy efficiency efforts will save UK consumers £3.7 billion per year by 2030, or £5.3 billion when including energy efficiency measures.
New build gas facing a carbon price versus renewables by 2030
But despite the increasingly obvious value in renewable energy and continued price declines, the UK Government has yet to properly commit to renewable energy deployment in a way that puts all doubts to rest and gives policy confidence to investors and developers. Despite promises to develop renewable energy and tough targets to increase renewable energy’s share of the country’s electricity mix, delays after delays have threatened the industry.
“Since 2015, the UK has been cutting back on renewables just as they’ve become cheap, having previously invested heavily to bring down their costs,” explained Chaitanya Kumar, senior policy adviser at Green Alliance. “A smarter strategy would be to follow through on the earlier investment and buy more of this cheaper, clean energy, which would keep energy bills down and support new jobs in the renewables industry across the country.”
Green Alliance analysis has determined that the UK Government has cut back on renewables so much that there is a queue of 65 terawatt-hours of renewable energy waiting to be developed — which would account for approximately 20% of the UK’s energy consumption. This pipeline could also be developed for much less than the comparable amount of natural gas.
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