7 April 2016

In November, the Secretary of State for Energy, Amber Rudd, gave a speech setting out the government’s energy policy that concluded “We now have an electricity system where no form of power generation, not even gas-fired power stations, can be built without government intervention”.

The remarkable progress in reducing the costs of renewables means this statement is simply wrong.

Good Energy recently announced that they can develop “The Big Field” wind farm in Cornwall without any public subsidy. The announcement confirms a report from Bloomberg in October that wind power is now the cheapest form of electricity generation in the UK.

The policies adopted over the last twenty five years to provide support to the development of wind power, and to reduce that support as the technology developed, have proved highly successful. Competitive pressures have driven down costs, industry sources indicate that the cost of wind turbines have recently fallen from £1million to $1million dollars per MW. Competition from Chinese companies looks set to drive costs even further.

National electricity system operators are showing that interconnection, storage and shifting demand through smart technologies can enable high levels of renewable generation whilst maintaining secure and stable supplies. In the UK renewables provided 25% of our electricity in 2015. In the same year Denmark generated 42% of its total electricity consumption from wind.

Through far sighted policies and technological progress we now have available a form of low carbon electricity production that can be built without subsidy and whose only fuel is an endless resource.

However, just as we should be celebrating this technological breakthrough, and the public policies that have enabled it, instead we have a government that is ideologically opposed to wind power onshore and has used the planning system to effectively ban it in England.

The government’s policy instead is for bill payers to provide hefty subsidies to enable new gas fired and nuclear power stations to be built. EDF, for example, is being guaranteed UK bill payers will pay it nearly three times the current market price for power from Hinkley C nuclear power station, index linked, for 35 years.

Rather than back room deals with French and Chinese companies a sensible policy approach would be to put all mature electricity generation technology on a level playing field where the government sets out what it wants in terms of generation, secure capacity and low carbon – and lets the market meet that at the lowest cost. There is no doubt renewable energy would be the clear winner from a genuine level playing field.