UK government forecast that renewables will reduce electricity bills

» By | Published 29 May 2012

Forecasting how much households will be paying for their electricity in the coming years is never an easy task and no government, especially in these austerity times, wants to tell the electorate that its policies will lead to increased prices. But the UK government this week published its draft energy bill, offering support for renewables, including wind power, and saying these measures will reduce consumer energy bills.

The energy bill should lead on average to a net saving on household energy bills from around 2013, former UK secretary of state for energy Chris Huhne said last year. By 2020, households will therefore spend “on average 7% less to heat and power their homes compared to what they would be paying in the absence of [these] policies,” he insisted. This would translate to a saving of £94 (€116) a year per household.

The Scottish government, which is aiming to meet the equivalent of 100% of gross annual electricity demand from renewables by 2020, welcomed the bill’s plans to strengthen market support for renewable electricity. Scottish energy minister Fergus Ewing says it is “essential” that “reforms send the right market signals for renewables and carbon capture and storage technologies so that industry has clarity over the form of support it will receive”. He also insists that “clean, green renewables must not lose out from increased support for nuclear”.

Incumbent UK secretary of state for energy Ed Davey said that “leaving the electricity market as it is would not be in the national interest. If we don’t secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiralling energy prices and dangerous climate change. These reforms will ensure we can keep the lights on, bills down and the air clean”.

As the debate goes on, the renewables industry needs to make sure its voice is heard loud and clear so that the real price of wind power is publicised. EWEA has developed a tool that allows you to compare the costs of wind power with fossil fuels and nuclear both today and in the future.

By choosing to compare, for example, onshore wind and coal for the year 2010 and projected costs for 2020, the tool shows that in 2010, wind cost €65.7 per megawatt hour (MWh) compared to coal’s €69.4, and by 2020 the gap should be even wider – €82.5 for coal and €58.2 for wind. Try the tool for yourself.

Meanwhile, another study in the US found that electricity from wind energy and other renewables is close to one-third cheaper than electricity from a new coal-fired plant. The report, published by the Michigan Public Service Commission, said that average costs over the life cycle of renewable energy systems equalled €69.5 per megawatt-hour (MWh) while the cost for a new coal fired power totalled €101 per MWh.

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Categories: Wind energy