Sir David King: UK should shift renewable energy subsidy focus to offshore wind

The Department of Energy and Climate Change (Decc) should concentrate its limited renewable energy subsidy budget on offshore wind, in an effort to drive down costs and increase investor demand, according to the UK's chief climate envoy Sir David King.

King, the Foreign Secretary’s Special Representative for Climate Change, told Utility Week’s sister title edie he believes the level of financial support available for renewable technologies – which is capped via the Levy Control Framework (LCF) – should be pooled towards the UK’s world-leading offshore wind market, following recent subsidy cuts for solar and other low-carbon technologies.

Speaking to edie during the launch of a new sustainable development networking organisation in London yesterday (25 April), King said: “Since 2008, we’ve seen [solar] prices fall by up to 80 per cent. That price collapse has been due to the regulatory systems that we put in place – feed-in tariffs, for example.

“Of course, when the prices begin to challenge the fossil fuel industry, you can lift the feed-in tariffs and use that money better elsewhere.

“Right now, we still have to pay above the market price for offshore wind. If we’ve got a limited pot of money, it’s quite a good idea to shift it into offshore wind at this time. I believe we’ll then see the same thing happen as we saw for other technologies – prices for offshore wind will continue to fall as we create the demand through subsidies.”

King’s comments come as pressure is mounting on Decc to provide more clarity on the LCF beyond 2020. Last summer, the Department withdrew and reduced subsidies for some forms of renewable energy generation, following revelations it had overspent its £7.6 billion LCF budget by £1.5 billion. The energy industry has since called for an “urgent review” of the Framework, to encourage investment across a range of technologies.

Energy Secretary Amber Rudd has already told MPs that the Government’s next three auctions under its Contracts for Difference (CfD) scheme – one of the subsidy mechanisms covered by the LCF – will be aimed at offshore wind, leaving major developers convinced that the UK is serious about supporting wind power, but less so about the likes of solar PV, biomass and onshore wind.

Paris Agreement

During his keynote speech today, King also provided a global outlook on the transition to a low-carbon economy. Despite an ever-growing international demand for renewable energy, King believes it will be “extraordinarily difficult” for the world to meet the ambitious 2C target set out in the legally-binding Paris Agreement, which was signed by 175 global heads of state on Friday – including Under Secretary of State for Energy Lord Nick Bourne.

“We are on a pathway – even post-Paris – of a 3C-4C world by the end of this century,” King said. “That pathway itself contains massive risks, and we have to manage those risks down. We need to move on quickly from a linear economy to a circular economy, and Britain needs to take the lead.

“I am very pleased [with the Paris Agreement]. We now have 195 nationally-determined contributions (NDCs), which are all critically important – they have created a massive surge in market demand for renewable energy. And that new market demand is going to be a self-accelerating process – when renewables become cheaper than fossil fuels, then we’ve won the battle.”

Carbon price

The climate envoy, who previously acted as the Government’s Chief Scientific Advisor and was instrumental in creating the Energy Technologies Institute, also gave mention of carbon pricing as a method to drive down global emissions – as called for by the likes of  UN climate chief Christiana Figueres and French President François Hollande

Whilst a great idea in principle, the international expansion of carbon pricing activities – such as the emissions trading system currently being pursued by China –. is “too sluggish a weapon” in the fight to mitigate global warming and will take “too many years” to roll out into the market, King said.

King was speaking at the launch of the UK Stakeholders For Sustainable Development (UKSSD) network – a new multi-stakeholder network aimed at driving implementation of the internationally agreed Sustainable Development Goals (SDGs) within the UK.

This article first appeared on edie.net