Question

To ask the Secretary of State for Energy and Climate Change, when he expects (a) solar photovoltaic and (b) onshore wind generation in the UK to be free of government subsidy.

The levelised cost of onshore wind and large scale solar photovoltaics (solar PV) are expected to fall over time. These estimated cost reductions are reflected in the administrative strike prices for solar PV and onshore wind in the EMR Delivery Plan, which shows support for these technologies falling over the coming years. Under the CfD auction, it is likely that established technologies will compete on price in order to secure a contract for support. This support will be within the budgetary constraints set through the Levy Control Framework (LCF).

It’s difficult to be certain when subsidies will no longer be required. Taking account of uncertainty, some projects may reach parity with wholesale electricity prices in the latter half of this decade or 2020s in the case of most ‘established’ technologies, such as onshore wind and solar PV, and post-2030 in the case of most ‘less established’ technologies, depending on the electricity price scenario used and the speed of cost reductions. The longer term aim is that renewables will be cost-competitive with other forms of energy generation and subsidies will no longer be required.

Published estimates of levelised costs are available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/269888/131217_Electricity_Generation_costs_report_December_2013_Final.pdf