Renewable Energy Association
Press Release
18th January 2012
Immediate Release

REA responds to Policy Exchange: Growing evidence suggests renewables no more expensive than fossil generation in long term

REA [1] responds to Policy Exchange’s misleading report on the costs of renewable energy policies; Chief Executive Gaynor Hartnell comments

Policy Exchange accuses DECC in its latest report [2] of “obscuring” and “hiding” the truth about the costs of its energy policies, despite a growing body of evidence to the contrary, and an “open source” approach from DECC.

Developed by Prof. David MacKay, DECC’s Chief Scientific Advisor, the 2050 Pathways Calculator [3], which anyone can interrogate, indicates that not decarbonising the energy sector costs just as much, if not more, than a high renewables/medium nuclear and gas plant scenario, even before accounting for the economic costs of climate change. This cost assessment supports a growing range of assessments, including Ofgem's Project Discovery and the McKinsey EU 2050 Roadmap, which all show that renewables can offer a cheaper pathway than business as usual.

The International Energy Agency have warned recently that the window of opportunity for preventing dangerous climate change will be closed by 2017. Their recent World Energy Outlook [4]. IEA states:

“Delaying action is a false economy: for every $1 of investment avoided in the power sector before 2020, an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions.”

The IEA also estimates that fossil fuels are currently subsidised globally to the tune of $500 billion. This subsidy, which dwarfs renewables subsidies, is set to grow to $660 billion in 2020, or 0.7% global GDP, without reform.

Around a third of UK generation capacity is nearing the end of its life and requiring replacement, therefore the UK renewable energy target presents a timely and cost effective opportunity to avoid 'lock-in' to fossil fuel infrastructure.

REA Chief Executive Gaynor Hartnell comments:

"It is bizarre to read reports like this Policy Exchange paper when renewables are the fastest growing energy sector in the world and the UK is trailing so far behind other EU countries. When authorities as mainstream as the IEA say urgent action on renewables is absolutely essential, it is disturbing to see people still trying to undermine the investment case."

Policy Exchange also present a false dichotomy between emissions trading schemes and renewable energy policies, presenting them as competing strategies for reducing carbon emissions, when they should be seen as complementary. The EU ETS, while less than perfect, seeks to put a price on carbon and better internalise costs that are currently externalised on societies and environmental around the world. One of its main functions is to drive investment in low carbon technology.

Gaynor Hartnell concludes:

“Reports such as this pop up every now and then, and their aim is to ultimately distract from the very serious business of decarbonising the UK energy supply. What Policy Exchange fails outright to acknowledge is that the costs of fossil fuels are on a long-term upward trajectory, while the costs of renewable energy are only going to come down.”

.
ENDS


For further information or to request an interview, please contact:

REA switchboard: 020 7925 3570, or

Name: Leonie Greene
Title: Head of External Affairs, REA
Tel: 07932 720091

Notes to Editors

1. The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable trade association in the UK, with 960 members, ranging from major multinationals to sole traders.
2. The Full Cost to Households of Renewable Energy Policies: Analysis of government’s annual energy policy statement, Simon Less/Policy Exchange, 18/01/2012
3. 2050 Pathways Calculator, Prof. David MacKay/DECC, 01/12/2011
4. World Energy Outlook 2011, IEA, 09/11/2011

 

Further Information:

• 120118PolicyExchangeResponse (0.20 MB)