Wednesday, September 13, 2017

The cost of clean electricity falls

A system of auctions for low carbon electricity generation, introduced by the Liberal Democrats as part of the Coalition, has helped to bring the cost of offshore wind energy down to below that of nuclear. In the auctions, low carbon power generators bid for a price to be paid them for each megawatt of electricity. The company bidding the lowest price wins.

The system has reduced the bid price from £120 in 2015 to £57.50 in the recent auction. This compares with the new Hinkley Point C nuclear plant securing a price of £92.50 per megawatt hour.

The bid price is paid by electricity distribution companies which pass on the costs to customers. The higher the bid price, the higher the retail price of electricity. The auction system has helped drive down costs by forcing the pace of innovation to save costs for example through bigger turbines, higher voltage cables and lower cost foundations.

Remember - this is what the Conservatives in the Coalition called the Lib Dems' "green crap".

1 comment:

Nigel Hunter said...

I remember them calling it green crap and throwing it out in 2015.Look at it now. Can bet the media will not mention the Lib Dem were involved. However this fact should be put on social media whenever possible.