Solar could have reduced UK gas reliance, says Carbon Brief

The 10 GW of extra solar generating capacity that might have been installed in the United Kingdom if the government had not halted fixed feed-in tariffs would have reduced the nation's reliance on gas imports by 20 TWh this year, saving GBP 1.54 billion ($1.7 billion).

Carbon Brief has run the numbers and said an additional 10 GW of solar could have been expected between 2016 and 2021 if installations had continued at the same rate as in the first year of that period. The Dutch think tank said it used the 2016 installation rate, rather than the peak year for new solar in the United Kingdom, which occurred in 2017 as developers rushed to beat the closure of the Renewable Obligation Certificate (ROC) fixed tariff.

The GBP 1.54 billion figure was based on an average price for UK gas imports of GBP 77/MWh recorded by Carbon Brief in the year to date. The lobby group said a move made by former UK Prime Minister David Cameron in 2013 to “cut the green crap” of clean energy subsidies, home energy efficiency measures, and greener building codes had cost the nation the opportunity of reducing its imported gas demand by 65 TWh this year, for around GBP 5.01 billion of savings.

Cameron's government introduced a contracts-for-difference (CFD) incentive regime to replace ROCs in 2013, with the latter program wound down. Under CFDs, renewable energy generators bid a maximum tariff “strike price” they will accept from the government.

Generators receive the strike price – minus the day-ahead hourly wholesale price of electricity – as a bonus on top of any payments they receive separately from the commercial sale of the power they generate. When the wholesale price is higher than the agreed strike price, the generators refund the difference back to the government.

The CFD system excluded solar plants from national generation capacity auctions until last year, when they were readmitted under Boris Johnson's government.