Leaders of the UK's solar industry say they are concerned by the new Gas Strategy published today which includes a 'dash-for-gas' scenario and does not reiterate the binding 2020 renewable energy targets.
The Solar Trade Association has highlighted the message from the Committee on Climate Change that said by including a dash-for-gas scenario the Government “exacerbates” its habit of sending mixed signals to investors.
The Chancellor and the Prime Minister both claimed today that the Energy Bill had given the renewable energy industry the certainty it needs.
But the STA argues this is not the case, particularly for independent generators and on-site investors, including in solar.
The organisation claims the delay to the decision on Renewables Obligation (RO) banding levels for solar PV is leading to an investment hiatus in the industry. There is also confusion about mid-sized solar, which risks falling through the policy framework.
STA Head of External Affairs Leonie Greene said: “The Chancellor and the Prime Minister are wrong to claim that renewable energy has a 'very clear and stable framework'. We are still seeking stability under both the Renewables Obligation and Electricity Market Reform for solar power.
“Clarity is urgently needed – not least because solar power is set to be a lot cheaper than gas with CCS in the 2020s.”
The Government today announced it will be setting up a cross-departmental 'Office for Unconventional Gas and Oil'. The Government's Gas Strategy today anticipates up to 37GW of new gas by 2030, yet their modelling shows that only 13GW by 2030 is compatible with the Committee on Climate Change recommendation of a 50g/kWh CO2 target, a target the STA supports.
Furthermore with the Government’s push for new nuclear in the 2020s the STA says it is difficult to see how the Government envisages the UK's renewables industry expanding into the next decade.
It points out that the Government's apparently preferred 'Diversified Energy Mix' scenario graph in the Gas Strategy shows the contribution from renewable power barely increasing in the 2020s.
A recent YouGov poll shows more than half of the public back investment in renewable energy and less than a third oppose it. Solar power has achieved the greatest cost reductions of any energy generation technology (70%) over the past two years.
With investment today, the solar industry is confident of being competitive with all forms of energy generation within the decade. IPCC research shows solar power could be the biggest source of electricity in the world by 2050 and the global market was worth $136 billion last year.
STA Solar Specialist Ray Noble said: “The Treasury is fixating on the wrong technologies. The UK needs a dedicated Solar Power Strategy. If the Government is serious about tackling climate change, answering the looming energy crunch and seizing huge economic opportunities, it needs to vigorously back solar technology.
“It is particularly disturbing to have this unconventional gas push announced as nations struggle to hammer out a desperately needed global agreement on preventing dangerous climate change.”
Solar can be deployed quickly. It is already competitive with other forms of low-carbon generation at the mid-size and larger scale, requiring less than 2 ROCs of support. The Government Gas Strategy anticipates CCS gas costing £100/MWh in the 2020s, which is the same price anticipated for offshore wind. Solar power is likely to be competitive without subsidy with the retail prices of electricity in the 2020s.
Leonie Greene added: “Whatever the Chancellor's plan for gas, solar will come into its own in the next decade as households increasingly choose to supply themselves with solar power without subsidy.
“It is ironic that the Treasury has a poor grasp on the relative cost of energy generation technologies in the next decade. It makes no sense whatsoever for the public to invest in building a strong renewable power industry this decade only for the Government to plan for precious little growth in renewables in the next.
“We hoped the Gas Strategy would leave no room for doubt that Government will ensure investment in gas must complement the delivery of the binding 2020 renewable energy targets. That is not the case and it begs the question if Government is running two parallel energy strategies, and the extent to which they are in competition.
“With the loss of the Renewables Obligation and no emission performance standards for unabated gas for decades, there is no reason why utilities should invest in renewables rather than gas.
“The Government should urgently prioritise sorting out the policy framework for renewables, because investment is floundering. Instead it seems to be putting huge resources into promoting fossil fuels, while solar is subject to repeated policy delays.”