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Report shows why UK's low-carbon support costs jumped

Principal changes to the Department’s forecasts between January 2015 and June 2015. Source: National Audit Office (www.nao.org.uk).

October 18 (SeeNews) - Between February and June 2015 the UK’s forecast for Levy Control Framework (LCF) costs in 2020-21 jumped to GBP 9.1 billion (USD 11bn/EUR 10bn) from GBP 7.1 billion, and a report out today shows which technologies contributed to that increase.

The forecast changed due to new assumptions on deployment, load factors and wholesale prices. For example, an increase in the assumed load factor for offshore wind capacity has contributed about GBP 610 million towards the GBP 2.03 billion change in the LCF projections, the report by the National Audit Office (NAO) shows. Meanwhile, solar deployment has contributed just GBP 130 million.

The LCF covers the now-ended Renewables Obligation (RO), the much-reduced Feed-in Tariffs (FiTs) and the newer Contracts for Difference (CfDs). The reasons for the apparent overspend on the LCF, broken down by the NAO, are shown in the table. Figures are in GBP.

Impact on 2020-21 costs Explanation Scheme
320 million Increase in assumed load
factors for offshore wind
RO
320 million Change to lower forecast
wholesale price of electricity
CfD
290 million Increase in assumed load
factors for offshore wind
CfD
250 million Increase in expected deployment
of offshore wind
RO
190 million Increase in expected deployment
of onshore wind
FiT
140 million Increase in expected deployment
of anaerobic digestion
FiT
130 million Increase in expected deployment
of onshore wind
RO
100 million Increase in expected deployment
of hydro
FiT
90 million Increase in expected deployment
of solar
RO
90 million Increase in expected deployment of advanced waste-to-energy tech RO
50 million Increase in assumed load factors for onshore wind RO
40 million Increase in expected deployment
of solar
FiT
20 million Increase in assumed load factors for onshore wind CfD

“The unexpected growth in solar power was repeatedly fingered as a key reason for the overspend on renewables. In fact NAO analysis shows solar accounts for only 6% of the overspend – but solar has borne the brunt of corrective measures,” Paul Barwell, CEO of the Solar Trade Association (STA), said in a statement commenting on the NAO report. The organisation is calling for a new CfD round for established technologies, which includes solar, and some changes to the “troubled FIT scheme”.

(GBP 1 = USD 1.22/EUR 1.11)

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Browse all articles from Tsvetomira Tsanova

Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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