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Low carbon electricity better than gas, says government panel

Low-carbon electricity, not gas, is the cheapest way to keep lights on and meet carbon targets, says the government's climate advisory panel.

The Committee on Climate Change says onshore wind and solar are already price-competitive if you factor in the cost imposed on society by carbon emissions from gas.

Ministers have recently imposed major cuts on renewables.

But the committee says wind and solar offer value for money.

The committee has pleaded for an end to the current turmoil over energy policy since the Treasury slashed subsidy for renewables because the budget was overspent.

Back up

The government has commissioned a report into the full system costs of renewables, which is expected to show that wind and solar power are dearer than they appear because they need back-up generating capacity when it's not windy or sunny.

The climate committee says its own report takes that back-up into account - and still concludes that onshore wind and solar are a good value way of meeting energy targets. It says the costs including back-up are on a cost par with nuclear and environmentalists will point out that renewables have no problems with waste disposal either.

The report says there will still be a charge to bill-payers from low-carbon investments; it estimates in the 2020s these will swell the typical electricity bill by about £15 a year.

Assumption

The committee says this is relatively low because the first big tranche of clean energy investment is already in train and current subsidies have brought down the price of future investments.

The committee says other technologies - such as carbon capture and storage (CCS) and offshore wind, will need continuing subsidy - but will be able to stand on their own feet in the 2020s.

The document assumes that the government will keep to its promise to stick to its climate targets, which have set the UK on course for 80% CO2 cuts by 2050. The committee's jobs is to advise the government of the cheapest and most effective way to stay on track.

'Crucial'

The Prime Minister promised before the election to abide by the Climate Change Act. Since then the government has said there will be a "reset" of energy policy, without specifying a date.

Lord Deben, the committee chair, said: "The 2020s are crucial in setting the direction for UK power generation. The government must urgently clarify the direction of future policy to ensure the power sector can decarbonise at lowest cost to businesses and households."

The committee's head of carbon budgets Mike Thompson told BBC News that the extra cost to the grid of accommodating wind and solar was about £10 per MWhour.

He said this was the first time the CCC had properly projected the full system costs of renewables. "The system costs are important but not dominant."

Hinkley

Solar and onshore wind, for instance, both signed contracts to provide power at around £80/MWh in recent subsidy auctions. The system costs will add around 10-15% to this figure - making solar and onshore wind comparable with new nuclear at Hinkley.

A previous report for the climate contrarian group GWPF concluded that the hidden costs of wind power were so great as to make the technology unaffordable compared with gas.

The climate committee disagrees. It says the price of gas to the consumer will have to rise, as carbon charges increase to £78/tonne in 2030. This would push the costs of gas-fired generation above the level of mature low-carbon options in the 2020s.

It warns that to keep system costs down as renewables increase, the government must increase the flexibility of the power system through interconnection to existing markets, demand response, electricity storage and deployment of flexible gas capacity.

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