RENEWABLE sources of energy are bringing down the wholesale cost of electricity, reducing the impact of clean power subsidies on consumer bills, research has shown.
The UK government recently moved to cut support for onshore wind and solar power, warning that the subsidies which are added to household and business energy bills need to be brought under control.
But there are calls for consumers to be given the “full picture” about the costs of backing renewables, as the research suggests their inclusion in the energy mix can bring down bills.
A report by renewables company Good Energy said that while supporting the development of clean power adds cost to consumer bills, the electricity generated by them is cheaper as their energy sources – the wind or the Sun – are free.
This means that when wind or solar power is available, they are first in line to meet demand, reducing the amount of power that needs to be bought from more expensive generation sources, and bringing down costs overall.
The study calculates that wind and solar generators brought down the wholesale cost of electricity by £1.55 billion in 2014.
This means the “net” overall price tag for supporting the two renewable sources last year was £1.1bn, 58 per cent less than the cost reflected in the capped budget set for green subsidies, known as the levy control framework, the report said.
The government has warned that by 2020-21, the levy control framework budget will have been breached by around £1.5bn a year – but the latest research suggests it will not have been exceeded if the benefits of solar and wind in lowering prices are taken into account.
With 25 per cent of the UK’s power generated by renewables this spring and with more schemes such as wind farms planned, clean energy could in the future deliver a net benefit to the consumer – if the wholesale price savings are passed on to consumers.
The findings of the study are backed by separate research from the University of Sheffield, which has not yet been published, but which suggests that the costs of onshore and offshore wind power are being offset by the savings.
Dr Lisa Clark, from Sheffield’s department of physics and astronomy, said her research showed there was a “net zero effect” for wind subsidies.
A Department of Energy and Climate Change spokesman said: “Our priority is to keep bills as low as possible … while reducing our emissions in the most cost-effective way.
“Government support has driven down the cost of renewable energy significantly and we will continue to press energy suppliers to deliver on the energy price cuts we have asked for.”