§ Mr. GibbTo ask the Secretary of State for Trade and Industry what her estimate is of the impact on the cost of electricity generation as a result of meeting her target of 20 per cent. of electricity from renewable sources by 2020. [99685]
§ Mr. WilsonWe expect industry to respond to the framework that we have established and demonstrate they can achieve our goals at an acceptable cost. On that basis, as set out in the Energy White Paper, our aspiration is by 2020 to double renewables' share of electricity generation from our 2010 target and we will pursue policies to achieve this.
The impact on the cost of generation of a 20 per cent. share of renewables in 2020 will depend on the generation costs of the renewables technologies and those of the alternative forms of generation. There would also be additional systems costs as a result of the increase in forms of intermittent generation such as onshore and offshore wind.
A renewables strategy for the decade to 2020 will be elaborated in 2005–06, in the light of progress on the current Renewables Obligation. But if—purely as a working assumption—support were to be provided on the basis of a buyout price of 3p/kWh, as for the current Renewables Obligation, the maximum annual cost to consumers of moving from a 10 per cent. share to 20 per cent. could by 2020 be between £900m and £1.1 billion (assuming additional generation required of between 30 and 35TWh). For a lower buyout price the cost to consumers would be commensurately reduced. Additional annual systems costs could amount to between £140 million and £400 million.