Consumers in the UK will miss out on cheaper electricity following clean energy subsidy cuts, according to a new research conducted by Imperial College of London (ICL).
The study, published in the Nature Materials journal, shows that as solar and wind increased its contributions to the UK’s electricity supply Britain was on track to deliver the same kind of reductions to wholesale electricity prices witnessed in Germany over the last four years.
Since 2011 Germany’s wholesale price has fallen 37% and Britain was on track to reap the same scale of dividends, but cuts to government support has now seen that progress flatline. The study reveals that renewables were being deployed quickly enough so that the UK would catch-up with Germany between 2018 and 2020.
“If Britain carried on building wind and solar at the rate we’ve seen over the last few years, the fall in the wholesale electricity price would continue,” Keith Barnham, emeritus professor of physics at ICL and lead author on the study, said. “Unfortunately, policy changes mean the rate of solar and onshore wind power build is going to plummet, so UK companies will miss out on the dividends that their German competitors are starting to enjoy,” he added.
The study contravenes the Department of Energy and Climate Change’s policy line that drastic cuts to renewable energy subsidies, including both the RO and the feed-in tariff, have been conducted in order to protect consumers from high electricity bills caused by an overspend in the Levy Control Framework.
Commenting on the study, Exeter University’s professor of energy policy Catherine Mitchell said it was “somewhat baffling” that the Treasury is either not aware of this renewables dividend to the energy price of is not “inclined to take advantage of it”.
In September this year figures released by DECC showed that soaring renewable energy generation, which amounted to more than 19TWh in Q2 2015, had had little to no effect on the average consumer energy price indices, which had not risen since Q4 2013 and had even steadily declined since then.