A new report on the future of Britain’s electricity supply from the government spending watchdog has highlighted the falling costs of renewables compared with nuclear, with figures projecting onshore wind and solar will be the cheapest ways of generating electricity by 2025. The report examines how new sources of electricity can be used to meet the looming capacity gap the UK faces over the coming decade while supporting emissions targets and keeping energy bills affordable. Its findings show that renewables may be a cheaper option than conventional energy sources, with Department of Energy and Climate Change (DECC) forecasts for the levelised cost of energy of wind and solar in 2025 having decreased since 2010. The cost forecast for nuclear during the same time period has increased while it has remained constant for gas. “Supporting early new nuclear projects could lead to higher costs in the short term than continuing to support wind and solar,” the report concludes. “The cost competitiveness of nuclear power is weakening as wind and solar become more established.” However, the NAO also said the projections for electricity costs do not reflect other factors such as the intermittency of wind and solar, which it said could require additional investment in new ways of distributing electricity compared with traditional fossil-fuelled sources. It therefore concludes that the decision to support nuclear relies “more on strategic than financial grounds” as it could complement the intermittent nature of wind and solar, while also being highly scaleable. “For wind and solar to generate the same amount of electricity as a nuclear power plant would mean covering large areas of sea or land, which could cause public opposition and technical challenges,” the report reads.
Business Green 14th July 2016 read more »
NAO Report 13th July 2016 read more »