Ahead of the results of the latest auction for financial supports contracts in the energy sector due to be announced tomorrow (September 8), campaigners including Greenpeace have raised concerns that renewables could loose out in a blow to the UK’s climate goals.
“Owing to rising cost pressures, but also inflexible government policy, it is now ‘highly likely’, according to Renewable UK, that there will be very few bids for offshore wind and onshore wind and solar could well be hit hard too,” said Greenpeace UK policy director Doug Parr.
“This would result in this year’s auction being a complete flop, and represent the biggest failure for clean energy policy since 2015,” he continued.
“The failure arises from an effort to save consumers pennies that will actually cost them pounds. Wind and solar remain vastly cheaper than the alternative for generating electricity (fossil gas) and are now unlikely to come forward for construction within this auction round”.
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He went on to explain that whilst contracts for fixed prices are an effective tool for keeping energy prices low and attracting private investment into renewables, renewable energy supply chains have been hit by “inflation running above 20 -40%”.
“The risk to clean energy expansion in the current auction is that the cap prices are set too low and either no or very few renewables will be able to come forward, meaning consumers will continue to pay the (higher) price of gas,” Parr continued.
He added: “Therefore, despite offshore wind remaining far cheaper than the default alternative (fossil gas generation), it’s unlikely that developers will be able to bid at prices under the cap price -resulting in no bids”.
Speaking to The Guardian newspaper about fears the offshore wind industry will loose out in the bids, Renewable UK executive director Ana Musat said: “We can’t have a ‘boom and bust’ cycle and expect to maintain investor confidence in the UK and grow our supply chains”.
She added that financial constraints on the wind industry could risk losing the UK’s position at the helm of the sector.
