Renewable Strike Price Assumptions In Fifth Carbon Budget
By Paul Homewood
As I mentioned the other day, the Committee on Climate Change have sent me their detailed costings for the Fifth Carbon Budget.
Part of these are the projected strike prices for various forms of renewable energy between now and 2030. By comparing these with the predicted wholesale electricity prices, the CCC is able to work out how much extra renewable energy will cost the country.
Of particular interest are the prices for wind and solar power. We are regularly told that technology is driving down costs so quickly that wind and solar will soon be cheaper than conventional sources, such as CCGT.
The CCC’s projections suggest otherwise!
Below are the projected prices for onshore, offshore wind and solar power. Note that these are all at constant 2014 prices. Also note that the figures refer to prices awarded to new developments commissioned in each year.
- Onshore wind is assumed to stay unchanged at £83.40/MWh throughout the period.
- Offshore wind gradually gets cheaper, but still costs £94.69/MWh for new windfarms commissioned in 2030.
- Solar power starts at £82.63/MWh for plants commissioned this year. By 2030, new solar farms will still be paid £59.61/MWh
A lot of detailed analysis has gone into the CCC’s numbers, and they are certainly not plucked out of the air. It is fair, I think, to assume that they would have wanted to put renewable technology into the best possible light.
Given that the present wholesale price is below £50/MWh, and their central projection for 2030 is still well below £60/MWh, it is clear that renewable energy is still a long way away from becoming competitive.
Perhaps Ambrose Evans Pritchard might like to take notice!
The spreadsheet the CCC sent me is a bit of a jumble, but a couple of screenshots below show the numbers for offshore and solar.