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Press Releases

The Economic Prospects for Solar Generation in the UK are Poor

Renewable Energy Foundation is today publishing a substantial study of the economics of large-scale solar in the United Kingdom.

The author, Professor Hughes of the University of Edinburgh, and a former World Bank economist, finds that while there were some declines in the cost of solar plant construction in the period 2011 to 2020, these were explained by the falling prices for solar panels and inverters. Other costs increased over the decade and are often affected by a scarcity of equipment and skilled labour. Since total costs are now dominated by items other than solar panels, further falls in the cost of solar panels will have a limited impact on total capex costs. A surge in public support will push up non-panel costs – and thus total capex costs.

Moreover, the average annual level of opex costs per MW of capacity for solar plants is three to four times the official assumptions at about £36,500 for a plant in the size category of 10-20 MW. Opex costs are highly variable over time and across plants because of equipment failures and other factors, but the pooled data suggests that they tend to increase with the age of the plant. The estimated rate of increase over time was about 5% per year in real terms. That rate of increase may fall as the industry matures but it would be prudent to assume that opex costs will increase by 2.5% to 3% per year in real terms.

The study also finds that there is extremely strong evidence from both the UK and the US that the output of solar plants falls at 1% to 2% per year after age 3 years, after controlling for the level of solar radiation.

The combination of rising opex costs and declining performance means that existing solar plants are unlikely to cover their operating costs once their period of eligibility for subsidy comes to an end after 20 years and they move to operating as merchant generators.

Professor Hughes, author of the study, said:
“Spending public money to promote solar generation in the UK seems to have been and still is a very poor use of limited budgetary resources.”

Last Updated on Wednesday, 01 March 2023

Scottish Wind Constraint Payments in Jan/Feb total £69m, over £1m a day

The UK charity REF is today publishing a brief analytic review of the extreme spike in constraint payments to Scottish wind farms during the first two months of the year, when £69 million was put on to consumer bills at an average rate of more than £1 million a day. This is four times greater than the previous most expensive January-February period on record, which was in 2016. The study can be read here.

Constraint payments, which began in 2010, arise when wind power in Scotland exceeds local demand but cannot be exported to England due to insufficient grid infrastructure. A new 2.2 GW subsea cable, The Western Link, running from Hunterston to Deeside was expected to mitigate these problems, and was scheduled to come into service at the end of 2015, but due to construction delays only became operational at the end of 2018.

In 2017 Ofgem reported National Grid’s prediction that the addition of the Western Link would reduce annual wind constraint costs to zero. In fact, payments amounted to a record £130m in 2019, and it seems probable that 2020 will be another record year.

High constraint costs in January and February 2020 were caused in part by the failure of the Western Link, which was out of operation from the 10th of January to the 7th of February, the most recent of several failures since it entered service. However, even after the link was repaired, constraint costs remained as high during the latter part of February as they were during the outage. This was partly because of strong winds, but also because wider network reinforcement is unable to keep pace with wind sector growth in Scotland where government continues to approve wind farms in spite of the constraints.

Specifically, considerations affecting the crucial substation at Harker, near Carlisle, exacerbated by further complications arising from the growth of wind and solar farms near to the Scotland-England boundary, have meant that the transfer capacity over the border to England has been capped, offsetting by fifty per cent the contribution of the Western Link. The Link was expected to increase transfer capacity from 4.4 GW to 6.6 GW, but due to the Harker problems the actual capacity is limited to 5.6 GW, contributing to high constraint payments and falsifying National Grid’s prediction of zero costs.

This mistaken forecast not only throws an unflattering spotlight on the cost-effectiveness of the £1.3 billion Western Link as compared to alternative courses of action, but also raises doubts as to the quality of National Grid’s planning function. This is of acute relevance since Grid is now proposing a further three interconnectors, this time on the East coast, at a cost of £8.5 billion to consumers.

Dr John Constable, director of REF, said: “In spite of expenditure on grid reinforcement and new lines such as the Western Link, the electricity system is failing to keep up with the development of wind in Scotland, resulting in very high costs to consumers. Government both at Holyrood and Westminster must share the blame. Meanwhile, heads or tails, the energy companies win handsomely.”

Last Updated on Friday, 13 March 2020

How Green was 2016?

Renewable energy generation fell in 2016 but thanks to gas, greenhouse gas emissions declined dramatically.

Carbon dioxide emissions arising from electricity generation in Great Britain dropped very significantly in 2016, not because of the continuing deployment of subsidised renewable energy generation capacity, but because of a large-scale switch from coal to gas fired power. In fact, in spite of rising capacities, the share of electricity generation from wind and hydro actually decreased in 2016 compared to 2015.

The installed capacity of large-scale, grid-connected wind generators increased by about 800 MW in 2016, but wind speeds over the year were lower than 2015 resulting in wind generated electricity being 10% lower than the 2015 figure. Lower annual wind speeds tend to be accompanied by reduced rainfall, and it is therefore unsurprising that hydro generation was also 18% lower in 2016 compared with 2015.

However,electricity generation from biomass increased by 25%, which offset the reduced output from hydro and wind, resulting in an overall minor decrease in renewable generation of about 0.5% in 2016 compared with 2015.

The big success story for 2016 was the very significant decrease in carbon dioxide emissions per unit of electricity (MWh). This fell from around 0.33 tonnes of CO2 per MWh of electricity supplied in 2015 to approximately 0.26 tonnes of CO2 per MWh. This large decrease is almost entirely due to switching from coal to gas in fossil-fuelled generation. The overall proportion of GB electricity supplied by coal and gas was steady at 56% but whereas coal supplied about half of that share in 2015, it dropped to less than a fifth in 2016, with gas making up the shortfall. Coal emits nearly two and a half times the amount of greenhouse gases per unit of electricity compared with gas, so the switch from coal to gas-fired generation resulted in the saving of more than 24 million tonnes of CO2

To put this figure into context, this is about one quarter of the total emissions from electricity generation in 2015.

The overall demand for electricity in GB continued the downward trend of recent years with 2% less being supplied in 2016 compared with 2015. This reduction also contributed to a saving of approximately 1.6 million tonnes of CO2. A reduction in demand will doubtless be claimed as a victory for energy efficiency leading to conservation, and some part of the fall may be the result of that effect, but we remain concerned that the fall may in fact reflect fundamental economic problems.

The reduced output of wind and hydro stations in 2016, and decrease in emissions from power generation means that both wind and hydro power stations saved less greenhouse gas in 2016 than the year before; wind generation saved roughly 2.5 million tonnes less in 2016 than in 2015 and hydro, about 0.5 million tonnes less. The increase in biomass generation helped biomass to offset the fall in average grid emissions.

As we noted in a previous blog, a reduction in emission factor for the GB electricity grid means that renewables become a more expensive means of cutting emissions. To put this differently, subsidy to renewables needs to decrease rapidly for emission savings to be cost-effective. The 2016 figures reveal that reducing emissions by onshore wind costs consumers around £169 per tonne of CO2, while offshore wind costs approximately double that amount, and the roof-mounted solar panels receiving the first Feed-in Tariffs about ten times that amount. These costs are very much in excess of the EUR 30 that the OECD estimates is the cost of the climate change damage arising from emitting a tonne of carbon dioxide. As we have stated in previous publications, such figures mean that, bizarre as it seems, it would be rational for the general public to prefer the damage of climate change to the economic harms they are exposed to in meeting the current subsidy costs of reducing emissions through renewable energy. Government surely did not intend this outcome.

Last Updated on Sunday, 01 January 2017

Renewable Electricity Subsidies Still Likely to Break Treasury Budget Limits

In the policy reset speech of 18 November 2015, the Secretary of State for Energy and Climate Change, the Rt Hon Amber Rudd, MP, made it clear that she intends to protect the consumer against excessive subsidy costs, which are in principle limited by the Treasury’s Levy Control Framework (LCF) to £7.6bn per year in 2020 [1].

The scale of the difficulties that government faces in achieving this goal is made clear in a new website page published today by the Renewable Energy Foundation, a UK charity that has been critical of overly expensive and ineffective renewable energy policies.

The REF web page [2] is based on information derived from the government’s own Renewable Energy Planning Database (REPD), the latest version of which was published on the 14th of December. REF’s calculations estimate the generation from the consented capacities of the various technologies, and thus measures progress towards the electricity component of the 2020 renewables targets specified by the European Union’s Renewables Directive of 2009. 

Last Updated on Tuesday, 15 December 2015

New REF Data Source shows Unsubsidised Renewable Energy Growth has Stalled

The Renewable Energy Foundation is today releasing a new and fully searchable website application and database of performance and other information relating to all UK generators of renewable electricity for which there is public-domain data, totaling approximately 21 GW of capacity spread over half a million sites.

One striking general conclusion from the data is that while there is continuing growth in the subsidized renewable electricity sector, growth in the unsubsidized sector has stalled.

Over the lifetime of the Feed-in Tariff (FiT), 2010-2014, capacity under the FiT itself has increased by 2,000% (0.1 GW to 2.6 GW); and capacity under the Renewables Obligation subsidy has increased by 100% (8.3 GW to 16.7 GW); but capacity in the unsubsidized sector has been stagnant at ca. 2 GW), with a marginal 6% increase.

Last Updated on Thursday, 16 October 2014

New Wind Farm Noise Guidance is Inadequate and Increases Risk of Harm to Neighbours

Renewable Energy Foundation [1] today condemned the new wind turbine noise guidance produced at the Government's request by the Institute of Acoustics. [2]

The IOA wind turbine noise guide, which is published tomorrow, not only fails to address the major problems of current regulations (the notorious ETSU-R-97) but actually makes things worse.

Last Updated on Monday, 20 May 2013

High Court Ruling Supports Wind Turbine Exclusion Distances

The Renewable Energy Foundation (REF) regrets the misreporting of the High Court ruling on the RWE Judicial Review of Milton Keynes Borough Council’s attempt to set a minimum separation distance between wind turbines and residential dwellings.

Milton Keynes Borough Council is to be congratulated on the judgment reached in the High Court case on their Wind Turbine Supplementary Planning Document (SPD) on Monday 15 April 2013. The judgment confirms that local authorities can set exclusion zones to protect local people from inappropriate development. Press reports and press statements from the wind industry suggesting that the judgment prevents local authorities from doing so are incorrect.

Download this file (ref pr 16 04 13.pdf)REF on MK Judgment
Last Updated on Tuesday, 16 April 2013

REF Calls for Renewables Subsidy Cuts to offset the "Carbon Price Support” Windfall

In yesterday's Sunday Telegraph ("Green tax boost for wind farm proifts", 17.03.14)it was revealed that wind power investors are expecting a 40% increase in subsidies to existing wind farms (and those built before 2017) due to the effects of the Carbon Price Support (sometimes called the Carbon Price Floor) that will be introduced in April.1

The Renewable Energy Foundation (REF)2 has seen the leaked Barclays investor briefing reported by the Sunday Telegraph. This document predicts the effect of the Carbon Price Support will be to boost renewables subsidies by an extra £20/MWh within a matter of years. This is an increase of more than 40% on the index-linked subsidy under the Renewables Obligation which is currently about £45/MWh.

REF calculates that the extra subsidy paid to operational wind farms and those likely to be built before 2017, when the Renewables Obligation closes, will reach £1 billion a year around 2016/2017, with about half this going to onshore wind farms. 

It is important to realise that onshore wind farms will receive a much larger proportional additional subsidy (up by 45%) than offshore (up by 22%). Thus the Carbon Price Support has had the unintended consequence of making onshore wind farms extremely attractive in the closing years of the Renewables Obligation as their subsidy will increase from £45/MWh to nearly £65/MWh. This is a long term increase since subsidies are guaranteed for twenty years from the date of construction of the generator.

REF estimates that this extra subsidy to all renewable generators built before 2017 will add a further £90 a year cost-of-living impact per household in 2020. This is in addition to the existing subsidies commitment predicted to cost households £300 a year in 2020. About 1/3 of that cost will appear directly in electricity bills, the rest hitting household budgets through the increased cost of goods and services.

There is now a clear, evidence-based case for retrospective reductions in the Renewables Obligation to offset the increase in subsidy via the wholesale price caused by the Carbon Price Support.

Dr John Constable, director of REF, said:

“These leaked documents show that investors are set to reap a major subsidy windfall on top of subsidies that are already thought to be excessive. As a matter of priority the Prime Minister and the Chancellor must step in to protect the consumer by making retrospective reductions in the Renewables Obligation to offset the effects of the Carbon Price Support tax.”

For further information contact the REF office (0207 637 4847), or John Constable (07867 592 085), This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Notes for Editors
1. The Carbon Price Support or Carbon Price Floor is described in this House of Commons Library briefing:
2. The Renewable Energy Foundation is a UK charity publishing data on the energy sector. It has no political affiliation and does not represent any industrial sector. See

Last Updated on Friday, 28 September 2018

Wear and Tear Hits Wind Farm Output and Economic Lifetime

The Renewable Energy Foundation [1] today published a new study, The Performance of Wind Farms in the United Kingdom and Denmark,[2] showing that the economic life of onshore wind turbines is between 10 and 15 years, not the 20 to 25 years projected by the wind industry itself, and used for government projections.  

The work has been conducted by one of the UK’s leading energy & environmental economists, Professor Gordon Hughes of the University of Edinburgh[3], and has been anonymously peer-reviewed.  This groundbreaking study applies rigorous statistical analysis to years of actual wind farm performance data from wind farms in both the UK and in Denmark.

Download this file (ref pr 19 12 12.pdf)ref pr 19 12 12.pdf
Last Updated on Wednesday, 19 December 2012

New REF Database Shows that Coal and Imported Electricity Keeps the Lights On

The Renewable Energy Foundation, a UK charity publishing data on the sector, today published a new freely accessible and user friendly web application allowing users to view and analyse the fuel mix generating Great Britain's electricity for every half hour since the 1st of January 2009.

Download this file (re pr 26 09 12 - Fuel Mix.pdf)Press Release 26/09/12
Last Updated on Wednesday, 26 September 2012

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