The public should be made aware of the cost associated with locking out the cheapest forms of electricity generation from government support according to the chairman of the UK's independent Committee on Climate Change (CCC).
Speaking at last week’s Energy Storage and Connected Systems event, hosted by the Renewable Energy Association (REA), Lord Deben pointed to a lack of transparency around the inherent costs of decarbonising the energy system without so-called ‘pot 1’ technologies, namely solar and onshore wind.
“I think if you stop the cheapest way of moving towards a carbon free [environment] you have to tell the public how much you are charging them for that choice,” he said.
“I've always thought it's quite wrong for government to say 'we're not going to have onshore wind' without saying to the public 'that means your cost of decarbonising the electricity system is increased by so much'. Otherwise people don't make a choice between two real things.”
Lord Deben’s comments echo those of the CCC’s head of carbon budgets Mike Thompson, who told Solar Power Portal in February 2016 that the government must be transparent about the additional costs incurred by backing more expensive generators.
Latest calls for zero subsidy solar CfDs
His comments followed confirmation by then energy secretary Amber Rudd that there were “no plans” for solar to be included in future CfD rounds.
Since then, calls have been made for a replacement mechanism to be introduced that offers the security of a long term government backed agreement but without the heavy subsidy judged to have been granted to solar – a zero subsidy Contracts for Difference (CfD).
Also speaking at the event was Ben Irons, executive director at Aurora Energy Research, who said the introduction of such a scheme would be game changing.
“If the government were offering what you might call a zero subsidy CfD that would be a major breakthrough for the opportunity to invest in a lot more renewables,” he stated.
“If the government were to guarantee revenue to solar and wind at the expected baseload power price, ie. an expectation the subsidy they are offering costs nothing but it de-risks the asset and the investment and therefore renewables allow capital to flow. That is a real game changer for renewables.”
He added that this would also create “a fantastic opportunity” to deploy battery storage, which would be able to manage the increased volatility on the energy system brought about by even higher penetration of renewables.
Lord Deben went further to suggest that solar and onshore wind should be able to bid into the existing auction mechanism below the level of subsidy to win the long-term security of a government-backed contract.
“You have a system whereby people can come in and bid then actually if they bid below where the subsidy is going to come then that's perfectly alright but let's let them all be part of the system,” he said.
However, Conservative MP James Heappey claimed that solar could now be deployed at scale without such measures having consulted with “people in green finance” who claimed there is a return available in the market.
He stated: “I would agree that solar and onshore wind are the cheapest forms of electricity generation…My view is that now we have reached a point where subsidy is probably no longer required.”