Energy UK has urged Dieter Helm to acknowledge the cheapest forms of renewable electricity generation in his ongoing cost of energy review.
Last month the government confirmed that it had asked renowned energy academic Helm to lead the review, pencilled in to be published next month.
But the review has proven contentious in its scope and lead time, and this morning Energy UK chief Lawrence Slade has stressed in an open letter a number of points which he says must be addressed for the review to be successful.
Addressing Helm, Slade writes that the new review provides an opportunity to consider “each aspect” of consumer energy bills and has stressed the need for the entire energy industry to be represented within it.
“Ensuring transparency and honesty about the benefits of various government policies, and what these are contributing to energy bills will be essential in helping consumers understand what they are paying for and why, and where the key drivers of increased bill amounts originate from,” he writes.
But in a ten-point list of priorities for the UK energy industry, Energy UK has said that any review of the costs associated with decarbonisation of the power sector and tax payer-funded support for renewables would need to acknowledge how the cheapest forms of renewable generation have found themselves locked out of competitive tenders.
The Contracts for Difference scheme, designed specifically to replace the now-defunct Renewables Obligation, originally allocated funding to established technologies such as utility-scale solar PV, resulting in two projects being supported to completion.
However both solar and onshore wind then found themselves barred from participating in further rounds following decisions made by the then-Amber Rudd-led Department of Energy and Climate Change, a decision which has so far not been reversed or discussed.
Energy UK has seemingly taken a dim view of the decision and subsequent radio silence from the government, especially given the need for the country to decarbonise at the lowest cost to the consumer.
“We would seriously question the findings of the Cost of Energy Review if it did not acknowledge that exempting the cheapest technologies from participating will increase costs to consumers,” Energy UK has said.
The calls are nothing new, however. In February last year the Committee on Climate Change told Solar Power Portal that if the government was to continue to block pot one technologies from competing in auctions it would have to be upfront regarding the added costs incurred in doing so.
The second CfD round awarded support to more than 3GW of offshore wind projects earlier this month at record-low prices – which, at £57.50/MWh for delivery in 2022/23, were far lower than anticipated – a result that industry professionals said was proof of the competitive process’ ability to help the industry drive down costs.
Meanwhile, Energy UK has also reiterated calls for the government to develop a delivery plan for post-2020 investment in renewables while simultaneously establishing fit for purpose controls to support the costs of decarbonisation, indicating the need for an adequate replacement of the much maligned Levy Control Framework to be forthcoming.