Green subsidies should be cut to reduce bills, report says

A new report by the thinktank Policy Exchange has suggested that the government should act “ruthlessly” in its efforts to reduce energy bills, by cutting back state support for some renewable energy sources.

The report, Going, Going, Gone: Auctions for renewable energy, says that offshore wind should be held to account over claims that it can help reduce bills by the end of the decade through a process that would see the industry lose its subsidies if it did not bring down energy costs in a stipulated timeframe.

The report also suggests that plans for auctioning, which are expected to be implemented by around 2020, should be brought forward to at least 2017. In Brazil, a similar process brought down the cost of onshore wind to a record world low, at £27 per megawatt hour (MWh) of electricity produced, compared to £95 per MWh in the UK.

Simon Moore, author of the report said, “The government needs to act more ruthlessly to reduce household energy bills by cutting state support for renewable technologies that do not come down in price.”

He added, “Offshore wind may play an important role in our future energy mix. But it shouldn’t be given favourable treatment at the expense of other low carbon technologies which could reduce our carbon emissions at a much cheaper price.”

The report adds that mature energy production, such as onshore wind, biomass and energy from waste, should be able to compete in an auction process by as early as next year. It also suggests to government should abandon the EU Renewable Energy Target, which it says imposes unnecessary costs on attempts to decarbonise.

Further reading:

Government accused of putting ‘sticking plasters’ on energy bills

Energy bills to be cut by £50 after government shake-up

Politicians urged to focus on energy efficiency measures

British energy consumers deserve more than political football

The Guide to Limitless Clean Energy 2013