Delays to the UK's transition to a cleaner power sector and the deployment of new renewable capacity could cost consumers as much as £2.6 billion, a new report has claimed.
Think tank Green Alliance has set out the claims in a new report - Closing the clean power gap - published today on the back of Monday’s second Contracts for Difference auction round results, which saw offshore wind projects win support at strike prices significantly lower than forecast.
The auction procured more than 3GW of offshore wind capacity at strike prices as low as £57.50/MWh, however Green Alliance has today said that current policy is failing to fully exploit the potential for renewables at similar - or even lower - prices, potentially raising costs for consumers.
The report goes on to suggest that without faster and more significant uptake of renewables consumers could be paying up to £2.6 billion per year more for their electricity by 2025 as the government would be forced to procure power from more expensive sources, particularly nuclear.
What’s more, given the rate at which the cost of renewables is expected to decrease further, Green Alliance has argued that consumers could save more than £5 billion per year by 2030 provided the government embraced renewables more completely.
For new nuclear plants to compete with offshore wind, developers would have to realise cost reductions of at least 30% by 2025, a figure which would only increase when measured against the cheaper onshore wind and solar technologies.
Chaitanya Kumar, senior policy advisor at Green Alliance, said that the UK has been cutting back on renewables since 2015 to the detriment of consumers.
“A smarter strategy would be to follow through on the earlier investment and buy more of this cheaper, clean energy, which would keep energy bills down and support new jobs in the renewables industry across the country,” he added.