Solar and wind will match gas on cost by 2020, finds UK government body

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The gathering arguments undermining the Conservative’s proposal to strip away subsidies for solar support grew more convincing today, with evidence emerging from the government’s own Committee on Climate Change suggesting that solar and wind power will be as cheap as gas as early as 2020.

The chief executive of the Committee, Matthew Bell, has said that the expectation that large-scale solar farms and onshore wind will reach cost-parity with gas is predicated on gas continuing to pay its fair share through a carbon price, and investors continuing to put money into all low carbon sectors – with the government giving the correct policy signals in order to convince them to do so.

Those policy signals have wavered alarmingly in the past few months, with yesterday’s Hinkley Point C deal further proof that the current government holds little love for renewables, even admitting in its official text that it will back subsidies for nuclear power.

"The government confirms that it is not continuing the ‘no public subsidy policy’ of the previous administration," ran the footnote in relation to nuclear power. There are no such qualms with clean energy, however, with energy minister Andrea Leadsom recently stating: "It is vital that industries over time stand on their own two feet. I don’t think anyone would advocate an industry that only survives because of a subsidy paid by a billpayer."

But nuclear power, 60 year in the making, is a special case, it would seem. The study by the Committee on Climate Change is likely to do little to reverse this line of thinking, despite showing that wind and ground-mounted solar projects are under contract to deliver power at £83/MWh from 2016-17, and are scheduled to fall every year from then on. Hinkley will deliver nuclear energy at £92.5/MWh, with gas currently costing £85/MWh, rising to £95/MWh by 2025.

"The 2020s are crucial in setting the direction for U.K. power generation, and to ensure the country can meet its 2050 climate change commitments cost-effectively," said chair of the committee Lord Deben, who also echoed a call made by the REA urging the government to clarify how it views renewables.

"The government must now urgently clarify the direction of future policy to ensure the power sector can decarbonize at lowest cost to businesses and households," Deben said.