Falling renewable energy auction prices ‘takes us much closer to a mature low carbon energy system’
Energy transition Economics, policy and regulatory advice Policy & regulation Climate change
Commenting on the results of the latest renewable energy auction, Chris Matson Partner at LCP, said:
“Today’s renewable strike prices are now expected to be close to ‘subsidy free’ as the contract price is below current market prices. The auction results represent a 31% decrease on the £57.50/MWh price set in 2017 (AR2), and a 67% decrease on the £119.89/MWh price in 2015 (AR1). This shows the cost of renewable generation is continuing to drop which is great news for customers and takes us much closer to a mature low carbon energy system.
With uncertainty around the future prices wind can achieve there is now more emphasis in the market on renewable generators looking to secure a Contracts for Difference (CfD) to stabilise revenue. Continuing on the path to net zero will require more innovation and deployment of a range of technologies if we are going to transition to a low carbon economy. The success of the GB renewables sector is a prime example of what can be achieved with government support and having the right mechanisms in place to grow an industry”