Rishi Sunak explains why energy rebate is paid per household
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As UK households suffer from the worst impacts of the global fossil fuel energy crisis, the green campaign group has said the UK will face higher energy bills than necessary this winter because of decisions made by the Government. The UK has given the green light to about 12GW of new renewable energy generation projects, in the form of wind farms and solar panels. These projects will begin construction this year, with most of them expected to be ready by next autumn.
Last week, the Department for Business, Energy and Industrial Strategy unveiled plans for an auction for 5GW of renewable energy generation, set to take place in July.
While the companies can bid to secure contracts to generate renewable energy, under the system of “contracts for difference”, the UK can set a limit on how much capacity it wants, and how much money is it willing to offer as incentives for the generators.
In this auction, onshore wind and solar farms will compete for buying a share of the 5GW capacity allotted by the Government, with both sides being able to purchase no more than 3.5GW each.
While the Government has not set a price cap on offshore wind generation, Greenpeace has warned that the limited incentive “pot” of £200million effectively places a cap at 7GW for new offshore wind.
Industry experts have called this move a “missed opportunity,” with Andy Willis, the founder of Kona Energy calling for an increase in price cap, which could end the UK’s reliance on Russian fossil fuels.
Speaking to Express.co.uk, he said: “Every KWh of green electricity we produce domestically moves our reliance away from Russian hydrocarbons and so the Government should increase the cap and allow these low-cost renewables to be constructed.”
While this 12GW auction is the largest allotment of green energy capacity so far, industry experts estimate that the UK could harness a further 8.5GW of offshore wind farms, along with about 3.9GW of onshore wind and about 5GW of solar farms, all of which are “shovel ready” and could be built quickly.
The Government has faced pressure from various groups, including unions, the CBI employers’ organisation, the National Farmers’ Union, and green and consumer groups to increase the amount of renewable energy generation.
Renewable energy generation is far cheaper than fossil fuels, as research has shown that if the proposed 12GW generation had begun a year earlier, UK households would have been able to shave £100 off their bills.
Ed Miliband, the shadow climate change and net zero secretary, said: “Once again, families are paying higher energy bills as a direct result of Conservative failure.
“The government is intentionally blocking access to the quickest, cheapest, cleanest forms of new power, stopping enough onshore wind and solar energy to power three million homes.
“These are shovel-ready projects, with planning permission, that could be generating energy for our country at a quarter of the price of gas by the end of next year.”
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Andy Willis, however, highlighted that a lot more needs to be done, than simply building new renewable energy generation projects.
He said: “Crucially, Government needs to do more to incentivise flexible energy storage to complement our growing fleet of renewables.
“Whilst driving down wholesale energy costs, a significant penetration of renewables leads to increasing constraint costs, this can be quickly solved through the delivery of large scale energy storage projects.”
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