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Industry queries carbon cost claims

UPDATE: R-UK rejects Taxpayers' Alliance criticism of wind subsidies

Industry queries carbon cost claims image

Industry bodies have questioned claims by the Taxpayers' Alliance that the low carbon impact on consumer energy bills will more than double before the end of the decade.

The campaign group for lower taxes claims total support for green energy through the Renewables Obligation and Contracts for Difference will rise from £1.99bn in 2012-13 to £5.32bn in 2018-19.

The organisation said in a report that subsidies “have failed to deliver reductions in cost”, adding that offshore wind is likely to miss the government’s £100/MWh by 2020 price target.

Trade association RenewableUK dismissed the report as "a classic example of cherry-picking facts".

Director of policy Gordon Edge said: "Investment is required in new generating capacity due to retiring coal and nuclear plants, and all such plants – even gas-fired – need a higher wholesale price than current levels, so TPA's baseline is wrong."

Edge dismissed TPA's call to curb offshore wind deployment until costs come down as a "classic delaying tactic by opponents of renewables".

"The only way to bring costs down effectively is to get real-world experience by deploying at scale," he said.

The TPA report conclued that “the Energy Bill has failed”.

“The greater certainty provided by CfDs was supposed to reduce the cost of renewable energy. But despite the transfer of energy price risk from investors to the public, the government has still felt it necessary to offer a similar level of subsidy with only modest reductions in future years," it added.

Chief executive Matthew Sinclair called for a reversal of “dysfunctional and painfully expensive energy policies” to help households struggling with the high cost of living.

Image: TPA said offshore wind deployment should be curtailed until costs are reduced (The Crown Estate)

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