The Lords’ Economic Affairs Committee’s report on the economics of renewable energy, published on Tuesday, said the UK will need to get one third of its electricity from renewables in 2020 to meet the EU target. This will have to come largely from wind power, which only generates power intermittently. Significant investment will be needed in coal or gas-fired back-up generation to prevent power outages.
When this is taken into account, the costs of jumping from 6% renewable electricity now to 34% are £6.8 billion a year, according to the committee. This translates to an increase in electricity prices from 4.7 pence per kilowatt hour to 6.7 pence – some 42%. The government’s renewable energy strategy said electricity prices would only increase by 10-13% due to renewables.
“This implies that the additional cost is about £130 per tonne of CO2 emissions avoided,” the report says. Meeting the target “may lead to over-emphasis on short-term options, simply because they are available rather than because they offer the most effective and economical means of reducing carbon dioxide emission over the longer term,” it adds.
The report calls for the government to redouble its efforts on providing a stable investment framework for nuclear power, which offers more reliable energy generation than wind and, it says, more economical carbon savings.
The government should also finance research into energy storage technologies. These could mitigate many of the problems associated with wind power. However, “no evidence we received persuaded us that advances in storage technology would become available in time…to affect the UK’s generating requirements up to 2020.”
The report was welcomed by the Renewable Energy Foundation, seen by many as an anti-windfarm group.