Energy price crisis ‘fuelled by UK dragging feet on renewables’

‘It would still be bad, but it wouldn’t be as bad,’ think tank economist says

Zoe Tidman
Wednesday 12 January 2022 18:25
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<p>Subsidies for onshore wind farms were banned for a number of years</p>

Subsidies for onshore wind farms were banned for a number of years

Britain’s energy crisis has been exacerbated by the government dragging its feet on renewables, experts have told The Independent.

Households are once again facing a rise in gas and electricity bills, with another increase in the price cap expected in spring – and suggestions this could rise by as much as 50 per cent to set limits just below £2,000.

The energy crisis has been sparked by soaring gas prices, which are in turn fuelling a sharp rise in the cost of living.

Economists and climate policy experts said the UK could have softened the blow of the crisis with a greater focus on renewable energy over the years.

“It would still be bad, but it wouldn’t be as bad,” Jonathan Marshall, an economist from Resolution Foundation think tank, told The Independent.

He added: “We, as a nation, would be using less gas. So the accumulative [energy] bill would be lower.”

The Conservative government banned subsidies for onshore wind farms from 2016, before reversing the decision in 2020.

The ban led to a sharp drop in this onshore wind development. Without it, Mr Marshall said: “There would be a lot more wind turbines up and down the country that would – over the course of months and years – mean we burned less gas to generate electricity.” He said if this were the case, the UK could be “less exposed to the price of gas”.

The economist, who leads the Resolution Foundation’s work on net-zero, said there was a “long-term push to renewables” now underway. “But it could have happened sooner, it could have happened quicker.”

Caterina Brandmayr, the head of climate policy at Green Alliance, told The Independent: “Ultimately, the current crisis is a gas crisis.”

She said: “If had we reduced our reliance on gas, both in the heating system and electricity, then it certainly would have made us more resilient to the current circumstances.”

Last month, the government announced there would be £285m available every year for green energy projects, with onshore wind able to apply for subsidies for the first time since its ban.

Applications for the scheme opened in December, with the Department for Business, Energy & Industrial Strategy (BEIS) saying the funding for low-carbon technology would move the UK “away from volatile foreign fossil fuels”.

But Mr Marshall from the Resolution Foundation said: “These things won’t be built for a number of years.”

On Wednesday, Chris O’Shea, the boss of Britain’s biggest energy supplier Centrica, which owns British Gas, warned that soaring gas prices could remain for as long as two years.

A government spokesperson said it rejected claims the current energy crisis had been made worse by it dragging its feet over renewables.

They said: “Since 2010 we have delivered a 500 per cent increase in the amount of renewable energy capacity connected to the grid – more than any other government in British history. To further reduce our reliance on volatile fossil fuels, just last month we launched the biggest renewable energy auction to accelerate deployment.”

The spokesperson said the energy price cap and other support - such as the warm home discount - was in place to support people facing pressures with the cost of living.

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