Over the past 18 months, renewable energy has often been the subject of regular attacks in the media, on often shaky grounds, arguing that renewables are and will always be too expensive, they don't work and people don't like renewable energy anyway. However, these attacks are at odds with what's actually happening on the ground.
Not only do the results of the Global Consumer Wind Survey show that an increasing number of consumers want renewable energy, there have also been some very positive developments of late on the costs of these technologies. Whilst the cost of many renewable technologies are still high, several technologies like onshore wind and solar PV are rapidly reducing in costs (by 50% alone in 2011 for solar PV according to the Pew Centre) and many other less mature technologies like offshore wind could soon follow this trend.
The chaotic manner in which the solar PV feed-in tariffs were reviewed last autumn and the way in which the 10% cut to onshore wind support was finally negotiated over the summer were very detrimental to the UK, not only because it damaged investment certainty in its renewables sector but also because it over-shadowed a more positive story. What unfortunately missed the headlines during these periods of turmoil was the fact that a drop in technology costs in both onshore wind and solar PV had allowed for their financial support levels to be reduced, with more promising cost reductions possible in the future. The costs of both technologies is heading in the right direction and that's surely good news whether you look at this from the consumer or environmental angle.
The key to continuing these costs reductions and delivering the 30% cost reduction in offshore wind which the Crown Estate says is achievable in the UK by 2020 is investment certainty. Having been through two difficult support level reviews over the last year and now awaiting the introduction of a new Energy Bill this autumn, this is a crucial time for the future of the UK's renewables industry.
To provide genuine investment certainty to the sector, the Energy Bill needs to do two key things. First, it needs to provide a clear sense of direction for investors. A decarbonisation target for 2030, the date by which the UK power sector should be near-decarbonised according to the Committee on Climate Change, would be a start. Whist not as helpful as a renewables target, it would have the merit of providing a clear signal as to how much low-carbon generation is required in the UK by 2030, a date which is only one investment cycle away.
Second, the Government's feed-in tariff contract proposals need to be properly tailored to the wide range of renewable energy technologies and project sizes available, not just in terms of the financial support being provided but also in terms of the clarity surrounding the amount of contracts that will be available in coming years for the renewables sector, the steps that need to be taken to obtain these contracts and their level of complexity.
If the Bill can get these two aspects right, this will not only allow for a greater deployment of renewable energy and help make these technologies cheaper faster, it could also be an important step in allowing the UK to make the most of the economic growth opportunities the renewables sector has to offer. At a time where the UK ponders how to re-energise its economy, that is surely something worth pursuing.
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