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Report looks at financial benefits of renewables
1 June 2006
Renewable energy offers a range of advantages to the UK electricity generating sector -- not just environmental benefits and increased security of supply; it makes financial sense too. This is the finding of a report by the Renewables Advisory Board (RAB) that will feed into the UK government's ongoing energy review. The report compares the costs of wind and gas, taking into account the cost of carbon. It states that wind reduces fuel costs to customers, with savings increasing as the cost of fossil fuel rises. At 2005 gas and carbon prices, if wind were meeting 20% of the UK's electricity demand, customers would save around £2 billion each year compared with an all gas scenario. Renewables also add value to generation portfolios, says the report. They hedge against fossil fuel price volatility, provide diversity, which creates a more robust generation mix, and with their lower financial risk profile, bring down the overall cost of electricity in the portfolio. Moreover, the renewables industry could support between 17,000 and 35,000 jobs by 2020, the report concludes. The RAB was set up by the Department of Trade and Industry to provide advice to government on the key issues and barriers facing renewables. Its report draws on research from Oxford and Cambridge universities and a range of analysts.
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