UK: Renewables brought down wholesale cost of electricity by GBP 1.55bn in 2014

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The increased role of wind and solar power in the U.K. energy mix has served to lower wholesale electricity prices by more than the overall net cost of subsidizing clean energy, a new report by independent energy company Good Energy has found.

According to the Good Energy report, which has been rubber-stamped by experts at the University of Sheffield, the wholesale cost of electricity in the U.K. in 2014 was lowered by £1.55 billion ($2.4 billion) thanks to the growing presence of solar PV and wind power feeding the grid.

That figure exceeds the £1.1 billion ($1.7 billion) in overall net support spent on solar and wind in 2014, which worked out at 58% less than the costs earmarked in the Levy Control Framework for green subsidies. Hence, money skimmed from customers’ bills to support clean energy was not fully spent by solar and wind.

"This analysis puts the bill payer at the center of the debate around renewable energy subsidies," said Good Energy chief executive Juliet Davenport. “Let’s give them the full picture and not just half of it."

The report comes just weeks after the government’s Department of Energy and Climate Change (DECC) argued that subsidies to solar had to be slashed in order to keep energy bills as low as possible for ‘hardworking’ families and businesses.

However, the analysis backs up previous reports that show how DECC’s rhetoric is on shaky economic ground. "The bill payer money invested into supporting renewables yields significant benefits, let’s be very clear about that," explained Davenport.

The Solar Trade Association’s (STA) chief executive Paul Barwell added: "With the government’s consultation on the FIT closing this week [23 October], this report is very timely. This analysis shows that the net effect on bills of supporting new rooftop solar – under the STA’s £1 plan – is zero. The £100 million we need added to consumer bills over three years will be completely offset by the savings from solar lowering the wholesale price. This is just the evidence that the government needs."

Further details of the £1 plan are set to be announced by the STA later this week. The scheme would add just £1 annually to consumer electricity bills by 2019, adding to the £9 per year that bill payers currently pay towards clean energy subsidies.