The next year is crucial in maintaining the lowest-cost approach to decarbonising the economy, the Committee on Climate Change said in its annual progress report. Government must learn the lessons of the last decade, it said, and it had four main messages:
- Support simple, low-cost options
- Commit to effective regulation and strict enforcement
- End the chopping and changing of policy
- Act now to keep long-term options open
The committee said consumers were being penalised because the government had choked off low-cost options. “There is no route to market for cheap onshore wind; withdrawal of incentives has cut home insulation installations to 5% of their 2012 level; woodland creation falls short of stated government ambition in every part of the UK. Worries over the short-term cost of these options are misguided. The whole economy cost of meeting the legally-binding targets will be higher without cost-effective measures in every sector.”
It said changes in policy had been equally costly: “A number of important programmes have been cancelled in recent years at short notice, including Zero Carbon Homes and the Carbon Capture and Storage (CCS) Commercialisation Programme. This has led to uncertainty, which carries a real cost. A consistent policy environment keeps investor risk low, reduces the cost of capital, provides clear signals to the consumer and gives businesses the confidence to build UK-based supply chains.”
The industry responds:
Emma Pinchbeck, executive director, RenewableUK: ”Onshore wind is the cheapest source of electricity, beating every other technology on cost, including gas and nuclear. Any politician who blocks onshore wind has to explain to voters why they’re being denied the lowest-cost power source.
“Denying new projects the chance to compete against other technologies on a level playing field is out of step with the public opinion; the Government’s most recent opinion polls show an all-time high of 76% of people support onshore wind. Denying hard-press bill payers cheap electricity makes no sense. Onshore wind also brings industrial benefits to the UK”.
STA chief executive Chris Hewett: ”For three years now the Committee on Climate Change has been urging the government to get behind the most popular and cheapest renewables. With investment in renewables dropping alarmingly & the UK off track on it’s carbon budgets, the government must now surely listen & act. There is no justification for holding back solar in the UK. Not only is solar the British public’s favourite energy technology, rooftop solar on businesses and factories doesn’t even need any public subsidy. All it needs is for government to reverse recent nonsensical taxes and to urgently clarify the policy framework for local renewables going forwards. The same applies to large-scale solar. Again, all government needs to do is provide access to long-term contracts for the development of solar farms which can be delivered effectively without subsidy from the consumer.
“A failure to promptly remove self-defeating barriers to solar power will leave the UK falling even further on behind in what is already the biggest clean energy market in the world.”
Nick Molho, executive director, Aldersgate Group: “Despite the positive progress delivered in the power sector and ambition coming out of government, the UK is not on course to deliver its carbon budgets on time or cost effectively. Private sector investment and supply chain growth in areas such as onshore wind and energy efficiency is being hampered by a lack of clear regulations (such as binding EPC targets), fiscal incentives (such as stamp duty rebates) and market mechanisms (such as subsidy free CfDs for onshore wind).
…“In the power sector, providing a route to market for onshore wind through a new competitive auction round and providing more clarity on the timing and size of future offshore wind auction rounds would do much to cut power prices for UK heavy industry and support continued cost reductions in renewable technologies.”
Oliver Hayes, climate campaigner, Friends of the Earth: “This report highlights the government’s dangerously inadequate approach to tackling climate change. Confirmation that the UK is off course for meeting its climate targets makes this week’s decisions to expand Heathrow and scrap the tidal lagoon at Swansea Bay even less justifiable.
“The climate committee is clear that urgent action is not only essential, but also low-cost. Delaying action will increase the human and financial costs for everyone. There are huge opportunities here, but the government is dropping the ball.”