Renewable Energy: Costs

Baroness Whitaker Excerpts

Thursday 14th November 2024 Lords Chamber

[Baroness Whitaker (Lab)]

My Lords, it is an education to follow the noble Lord, Lord Moynihan. It is an obvious truth that we should note the costs of any national policy and we are grateful to the noble Lord, Lord Frost, for giving us the opportunity to debate it. I congratulate him on his timing. COP 29 provides an international context for what is manifestly an international problem: the climate change emergency.

We must also factor in to the national calculation the benefits of the policy and the costs of not adopting it, as has been mentioned. We should do this for the long term as well as the short term. I shall focus on the long term, but it is unarguable that there will be short-term costs—whatever they are—in moving to reliance on renewables. A key issue is who is to bear them. We shall need to consider the split between public funds and consumer and upfront private sector expenditure.

Industry thinks long term, and the chief executive of CorPower, which has pioneered the first commercial wave energy device in Portugal, said:

“I believe that there are, today, several key trends in renewable energy which can be considered megatrends. One of them is … cost reduction”.


He describes this trend in solar energy as being

“even in places where the solar irradiation is quite low”.

I think the UK might find itself here, and in wind energy and eventually marine energy.

NESO, referred to by my noble friend Lord Hain, considers that the economies it mentions, after the shift to a clean-power system, come from offsetting benefits from the eventual fall in the price of electricity, the cessation of dependence on volatile international gas prices, and improved efficiency measures. I regret that there simply is not time in four minutes to break down the figures. We should also find a way to include the so far unquantified but clear gains in energy security and health which will come with renewables.

If we can ensure that our national strategy invests fairly and equitably in short-term costs, the profits of the companies involved will yield tax, as will the jobs that they provide, together with more consumer spending power. There is already an example in the joint venture project to supply decarbonised heat to buildings across Westminster from the Thames, the Underground and the sewer networks. It will cost £1 billion: an investment that is certainly a significant short-term cost but a measurable long-term significant gain in reducing energy bills.

We must put into our equation the likely costs of unimpeded climate change from the overuse of fossil fuels: extensive floods in the UK, homes abandoned from rising sea levels in the UK, lives lost from extreme heat—probably also in the UK—and the international disruption caused by the effects of climate change on people fleeing ruined habitats.

Finally, I put one request to my noble friend the Minister. Wave energy is the Cinderella of renewable energy, but it has huge potential, especially when combined with offshore wind, not least for reducing battery storage costs. The contracts for difference scheme does not give it a fair chance at present, because it has not yet achieved the scale-up reductions of the more established tidal energy schemes. Will he consider giving it its own ring-fence, so that all the research now producing results can be speeded up?