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Powerful targets: exploring the relative cost of meeting decarbonisation and renewables targets in the British power sector  

Author:  | Economics, Emissions, U.K.


This paper contributes to our understanding of how to achieve the UK’s climate change targets in the power sector, and of the costs of taking different paths to do this.

It does not prescribe or recommend policy. Rather it looks at the lowest cost way of getting to the targets the UK has accepted for reducing its total greenhouse gas emissions by 80% by 2050.

In many ways the results are encouraging. Our modelling indicates that in order to meet our 2050 target for carbon reduction emissions for power we need to spend around 25% more than we would if we had no such target. To achieve exactly the same amount of carbon reduction – but with the renewable targets as well – would add around another 15%, or about 40% extra overall costs compared to no targets.

Without carbon dioxide reduction targets there would be no renewable or new nuclear. This illustrates the obvious point that carbon credits or other government policies are required to achieve power generation that is less carbon intensive.

If our only policy driver is to reduce carbon emissions, then the lowest cost way of meeting our emissions targets requires a mixture of gas and nuclear new build. Coal has no place in this least cost scenario – because of its emissions. Nor has wind, either onshore or offshore – because of its additional cost. To meet the UK’s targets does require some offsetting by carbon capture and storage. This is a technology that is still in its infancy and is unproven.

It is only when we require renewables for their own sake – and not only to reduce carbon emissions – that wind, both offshore and onshore, becomes part of the generation mix. Even in this scenario solar power has no role because of its additional cost.

These are interesting conclusions. If we are concerned about cost, then renewables have no part to play in reducing greenhouse gas emissions by 80% before 2050. Rather it is gas and nuclear alone that creates the least cost mix.

What is clear is that current policies, under DECC’s own central projections, are not delivering emissions reductions using the lowest cost means. Indeed according to this analysis, current policy is set on a relatively high cost path.

The model shows that the cost of having a renewables target over and above an emissions target alone is high. It is often not clear whether the aim of that policy is to reduce carbon dioxide emissions, or to deliver renewables for their own sake. Understanding the difference is key to understanding the costs to the British economy.

Given the economic impact, it is important that the case for renewables is made independently and cogently. There may be valid policy reasons to go for a costlier mix, but if this is the case, it needs to be articulated openly and honestly, giving stakeholders robust forecasts of the costs and benefits.

We hope that this paper encourages debate and sheds light in this important area of our lives.

Download original document: “Powerful targets: exploring the relative cost of meeting decarbonisation and renewables targets in the British power sector

This material is the work of the author(s) indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this material resides with the author(s). As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Queries e-mail.

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