Scaling back on renewable energy ambitions would be an own goal
10 Nov 2011 09:58 AM
According to the Sunday Times and the BBC (see the Sunday Times, “Ditching expensive wind farms would save £34bn”), a forthcoming report from KPMG will suggest that scaling down ambitions on renewable energy could save the UK up to £34bn by 2020. WWF-UK believes that scaling back renewable energy ambitions would be a backward step and pending viewing the KPMG report, has warned that a greater reliance on gas coupled with unrealistic nuclear ambitions will fail both business and consumers in the UK.
In October, WWF-UK launched its Positive Energy report, arguing that an environmentally sustainable and affordable power sector is achievable by prioritising energy efficiency measures in all sectors of the economy, providing stable and proportionate support to the renewables industry to accelerate cost reductions and improving connection routes with Europe. Report available here.
Gas and poor energy efficiency are key culprits of recent bill rises
Recent increases in energy bills are first and foremost linked to the UK’s over-reliance on gas for both electricity and heating. The UK already relies on gas for 46% of its electricity consumption and 80% of its domestic heating. Nick Molho, head of energy policy at WWF-UK said:
“It’s deeply concerning to see gas and nuclear being trumpeted as a way to bring energy bills down. Considering that the key driver of the 63% increase in electricity bills between 2004 and 2009 was the massive 84% increase in the price of gas over the same time period, we think it’s pretty clear that the main culprit is our continued reliance on this fossil fuel.”
“In the UK, we’re already hugely exposed to international gas prices, and it would seem particularly unwise to increase our dependence on gas even further. A greater reliance on gas is also incompatible with the need for the UK power sector to be near-decarbonised by 2030, which is key to honouring the UK’s climate change commitments.”
This over-reliance on gas comes in addition to the UK’s poor track record in energy efficiency, which is key to mitigating impacts on consumers. The UK Energy Research Centre found that ambitious energy efficiency measures in the UK’s homes and transport sector could reduce the cost of decarbonising the UK’s power sector by up to £70bn by 2050, whilst the Committee on Climate Change recently stated that energy demand in households could be reduced on average by up to 14% by 2020. Nick Molho, head of energy policy at WWF-UK said:
“Considering the potential for energy efficiency measures to reduce costs for consumers, surely this is the time to move towards an energy efficient economy and diversified energy mix? We must not remain locked into an ageing, inefficient and fossil fuel dependent energy system.”
Investment certainty holds the key to reducing costs and creating jobs
As made clear by industry reactions to WWF’s Positive Energy report, the key to reducing the costs of renewable technologies and maximise economic benefits for the UK in terms of job creation is to provide stable investment certainty to the sector. Nick Molho, head of energy policy at WWF-UK said:
“It’s by providing a stable investment climate for the renewables sector, that we can lower the cost of capital, encourage companies like Vestas and Siemens to build factories in the UK and mass-produce renewable technologies, all of which will reduce costs and create great employment opportunities in the UK.”
“Arguing for a dilution of our renewable energy ambitions would be an own goal as it will only serve to increase uncertainty, increase costs and give up on the opportunity of becoming industrial leaders in the sector. That would be a shame given that Renewable UK estimate that up to 115,000 jobs could be created in the marine and offshore wind sector by 2021. ”
“Providing support to the renewables industry is not about giving a blank cheque to the sector. It’s about supporting these technologies in a way that is proportionate to their degree of maturity and which gradually declines and eventually ceases as the technologies improve and become cheaper.”
Notes to editors
2. WWF’s UK energy report, Positive Energy: how renewable electricity can transform the UK by 2030, is available here. The report has been welcomed by a range of organisations, including: Siemens; Unilever; Procter & Gamble; National Grid; Conservative Environment Network; National Energy Action; Consumer Focus; Crown Estate; SSE; Triodos Bank; Renewable UK; Vestas; RSA; Renewable Energy Systems; Interface Flor; Ecotricity; Good Energy; Carbon Trust; G Cube Insurance; Caroline Lucas MP; Alan Whitehead MP; Tessa Munt MP, Sir Graham Watson MEP, PRASEG; RSPB; and Friends of the Earth (for a full list see here).
3. The CCC's Renewable Energy Review estimated that the costs of meeting the 2020 Renewable Energy Target would result in a 4% increase in household energy bills, all of which could be offset by the 14% reduction in energy demand in households by 2020. The UK Energy Research Centre (UKERC) say that demand could be cut by 50% by 2050 in homes and transport and energy efficiency measures could reduce decarbonisation costs by up to £70bn by 2050 (http://www.ukerc.ac.uk/Downloads/PDF/U/UKERCEnergy2050/0906UKERC2050.pdf). The European Climate Foundation (ECF) Roadmap 2050 says that energy efficiency measures could save the construction of 440 mid-sized coal power stations in Europe by 2050.
4. The Government's Offshore Valuation Report shows that the levelised costs of offshore wind could decrease to around £70-£80/MWh by 2030 (compared to £140-£150/MWh today), whilst Siemens recently stated that offshore wind could be fully cost competitive globally between 2020 and 2025. The Offshore Valuation Report also found that using just one third of the UK's wind, wave and tidal resource could: unlock the electricity equivalent of 1 billion barrels of oil a year (matching North Sea oil and gas production); give CO2 reductions of 1.1 billion tonnes by 2050; and create 145,000 new UK jobs.
5. The potential for job creation in the UK’s renewable sector is enormous: Renewable UK believes that the offshore wind and marine renewable sectors alone could create from 44,000 to 115,000 jobs in the UK by 2021 link; a Carbon Trust report on marine renewables found that the UK could capture 22% of the global accessible market in wave and tidal stream technologies which could create 68,000 jobs in the UK link; and the European Renewable Energy Council have said that, if the EU was to aim for a 45% renewable energy target by 2030, this could create up to 4.4 million jobs in the EU’s renewable energy sector by that date link.