Sep 10, 2013 - The Committee on Climate Change (CCC) is calling on the UK government to cut the proposed degression rate for offshore wind strike prices under the Electricity Market Reform (EMR) Delivery Plan and provide more clarity on post-2020 goals.
In a letter on Monday the CCC pointed out that the proposed rate of degression of GBP 15 (USD 23.6/EUR 17.8) per MWh was faster than achievable. According to the independent, statutory body, the price degression should reflect the evidence on achievable cost reduction under current market conditions. CCC believes it is more appropriate to fix the degression closer to GBP 5.00 per MWh between 2016/17 and 2018/19.
Furthermore, the organisation noted that points in the EMR plan are resulting in significant uncertainty for the offshore wind power sector in Britain. The Delivery Plan has a number of scenarios for power industry investment in the 2020s and CCC believes that the range of scenarios should be narrowed and that the government should clarify conditions under which such scenarios are appropriate. Also it calls for the publishing of commercialisation strategies for less mature technologies, levels of investment in the 2020s included. Last but not least, the statutory body is asking for a 2030 decarbonisation target.
“Industry has been very clear that more certainty is required to support supply chain investment, which is a necessary condition for competition, innovation and cost reduction,” the CCC says. It noted that “compelling evidence” is showing that a plan directed at low-carbon investment through the 2020s is a “low-regrets option” that would bring significant cost savings in a world that is carbon-constrained.
The above-mentioned issues are aggravated by a reduction in 2020 offshore wind ambitions to between 8 GW and 10 GW of total installed capacity. The CCC says that this would not have been a concern if the government offered clear expectation for investment in the 2020s. “Reduced 2020 ambition together with the lack of a post-2020 commitment and strike prices that fall more quickly than expected costs jeopardises the commercialisation of this key low-carbon technology,” the CCC concluded.
(GBP 1 = USD 1.570/EUR 1.184)
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