Renewable Energy: Costs

Lord Browne of Madingley Excerpts

Thursday 14th November 2024 Lords Chamber

[Lord Browne of Madingley (CB)]

My Lords, I refer the House to my relevant interests as set out in the register.

I would like to make four related points on this topic and its wider context. First, in the UK, the cost of supplying electricity from renewable sources such as wind and solar is far below the cost of supplying it from generators using oil, coal, gas or nuclear fission. However, there are many assumptions in these average calculations, notably for financing, location and risk. In my long experience, these will cause different analysts to come up with different estimates, but in almost all cases the results are the same: namely, that renewable energy sources are the cheapest today.

Secondly, the cost of renewable power has come down by at least 60% over the last decade. That is a result of economies of manufacturing scale and improvements in technology. Both these effects will continue. There is no reason why, for example, the efficiency of solar cells could not improve by 50%. The cost of battery capacity has shrunk by over 80% and it will continue to decline. That is important because it now makes it possible to have long duration storage of electricity supply, removing the uncertainty of sunshine and wind.

Renewables will be a significant contributor to the transition to clean energy sources. Their continued cost-effective deployment is vital to avoid the impacts of climate change. They are not the only source of climate mitigation, but they tell a story which needs to be repeated in other technologies. Their continued improvement and deployment in the UK give us credibility in the energy transition industry. We must not let go of this position.

Thirdly, no improvement or deployment can happen automatically. It requires research and development, from fundamental science to the engineering of how to grow an innovation to a commercial scale. The UK’s grip on many of the needed intellectual and practical scientific components is strong. If continued to be aggressively developed, this could become the source of significant growth, both domestically and as a source of export earnings.

Fourthly, the UK will need to pull together all its resources to compete in the areas likely to have the highest commercial impact and the lowest cost deployment. It will need to demonstrate that our innovations are scalable. That will best be done if the UK creates a national energy institute. It must consolidate in one place the best minds to work on problems that need access to many different scientific, engineering and economics disciplines. It must attract the best of the best, because it is a centre of excellence, much as has happened in the life sciences at the Francis Crick Institute and the Laboratory of Molecular Biology. It will need to be based in a city which already attracts the best people and has an appropriate platform of scientific and technical support. Given its track record in energy, Cambridge must come high, if not top, of the list of those candidates.

I make these four points to make a single overarching comment: that we need access to the best, lowest-cost and highest-impact technologies, not just now but in the future. We have low-cost renewables; we must not throw away the chance of having other low-cost technologies here in the UK to have low-cost, secure and clean sources of energy for generations to come.