Last updated: May 23, 2013 11:05 pm

Climate committee urges UK commitment to green power until 2030

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The benefits of UK investment in renewable power that will add £100 a year to household energy bills are in jeopardy and should be bolstered with an approach that would add a further £20, the government’s climate watchdog has said.

Assuming the UK remains legally bound to cut its greenhouse gas emissions to 20 per cent of 1990 levels by 2050, this would still be up to £100bn cheaper than increasing reliance on new gas-fired power plants, according to a report by the Committee on Climate Change.

The government has already committed to spending nearly £8bn a year by 2020 to support new nuclear power stations and wind farms. These developments are expected to add about £100 a year to bills.

But there is a “high degree of uncertainty” about what will happen after 2020 according to the climate change committee, a statutory body set up to advise the government on meeting its climate targets.

The government should, therefore, agree to extend its funding commitments so they total £10bn by 2030, the committee says.

It should also – in the energy bill that is now moving through parliament – set a 2030 target for sharply cutting the carbon intensity of power generating plants. Some rebel government MPs are already saying they would support such an amendment.

These additional measures would add a further £20 to power bills between 2020 and 2030 but would help save consumers from £25bn to £45bn and up to £100bn, if gas and prices for emitting carbon soared, the committee says.

The committee’s 74-page report amounts to a stout rejection of the view in some parts of Whitehall that it would be cheaper for the UK to defer building new nuclear plants and offshore wind farms until closer to 2050, especially if shale exploration opens up new national sources of natural gas.

To invest in low-carbon technologies to 2020, then to [change] focus on investment in gas in the 2020s and to move back to investment in low-carbon generation in the 2030s simply doesn’t stand up

- Lord Deben, committee chair

David Kennedy, the chief executive of the committee, said such views are incorrect, in part because delaying the building of low carbon power plants would greatly add to their expense.

That is because investment in relatively immature technology, such as offshore wind farms, to get them up and running, helps drive technical advances. It also lowers the cost of capital, as lenders see proof that such projects can provide financial returns.

“To invest in low-carbon technologies to 2020, then to [change] focus on investment in gas in the 2020s and to move back to investment in low-carbon generation in the 2030s simply doesn’t stand up,” said the Lord Deben, the committee chair and Conservative peer.

“Such an approach is likely to drive up costs, by up to £100bn in some scenarios.”

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