CHAPTER 7: RECOMMENDATIONS AND CONCLUSIONS
232. We cannot consider renewable energy in isolation from the rest of the UK energy system and we support measures to include nuclear plants as an essential element of the UK's energy mix (paragraph 74).
233. The cost of electricity from onshore wind farms at good locations would only be comparable with that from fossil fuel generators when the prices of oil, gas and coal are very high or allowance is made for the price imposed for carbon emissions permits (effectively a tax). It is more expensive than nuclear generated poweróbase cost 7 pence per kWh, as opposed to around 4 pence per kWh for the other technologies. Offshore wind, biomass, wave and tidal power are even more expensive.
And these estimates exclude the additional costs of integrating more renewable generation into Britain's electricity grid (paragraph 74).
234. Future developments depend upon many variable factors But it seems clear that the base costs of generation of electricity from onshore wind are likely to remain considerably higher than those of fossil or nuclear generation and that costs of generation of marine or solar renewable electricity are higher still (paragraph 85). We hope that the Energy Technologies Institute's work will yield technological advance and lower costs. The Government should consider, perhaps in collaboration with others, offering a substantial annual prize for the best technological contribution to renewable energy development (paragraph 93).
235. Although their declared purpose is to improve the environment, it is clear that renewable energy installations can also have adverse environmental impacts which the Government should bear in mind as it weighs the benefits and costs of expansion of renewable generation (paragraph 96).
236. Fluctuations in wind speed lead to short term changes in electricity output from wind farms. Greater use of wind power and other intermittent renewable sources therefore requires more backup generation capacity to respond very quickly to, for example, reductions in the output of wind turbines when the wind drops. But the technical challenges and costs of backup generation on a scale large enough to balance an electricity system with a high proportion of intermittent renewable generation are still uncertain. Whereas the highest share of intermittent renewable electricity now being generated in Europe is 15% in Denmark, the UK is expected to reach a share of some 30%-40%. We recommend that the Government should ensure that further work is carried out to clarify the costs and encourage development of technical solutions to deal with intermittency (paragraph 104).