March 14 (SeeNews) - Green Alliance said today that current UK policy is unlikely to deliver the low-carbon power generation needed by 2025 and it proposed a strategy ahead of the government's budget 2016 to cut carbon at least cost.
The think tank warned in a report of a high risk of a significant low carbon gap due to constraints on the build rate for the few technologies selected by the government -- offshore wind, nuclear and possibly tidal lagoons.
To fill the gap at the lowest cost, the levy control framework (LCF), through which the government supports low-carbon power development, should allow the cheapest and most deliverable projects to deploy faster, via subsidy-free contracts and a feed-in tariff (FiT) for electricity efficiency, also known as negawatts. The LCF should also provide funding visibility to investors.
The report, Beyond subsidy: How the next levy control framework can cut carbon at least cost, says that it is likely that onshore wind and solar will provide cheaper power than gas plants by 2020, so constraining their deployment would push bills up. The route to subsidy-free offshore wind and perhaps tidal power, meanwhile, requires consistent funding.
It argues that because all new generation, including gas, requires support above the wholesale price, only the additional cost of low-carbon generation above that of new gas power stations facing a carbon price should be seen as subsidy.
Green Alliance makes several recommendations that include separating nuclear funding from LCF spending on renewables, and holding few, large auctions for offshore technology and many, smaller auctions for onshore technology.