Policy frameworks for renewables

Analysis on policy frameworks to drive future investment in near and long-term renewable power in the UK

Publication date: July 2006 - Information in this report was correct at the time of publication

This report examines the case for renewable energy both in the near-term and the long-term in the light of the Energy Review. It then analyses the expected outcome of the current renewable policy framework and the implications of new potential policy frameworks for three renewable technologies at different lifecycle stages: onshore wind, offshore wind, and marine.

The report concludes that the UK could both get significantly closer to achieving its renewable and carbon reduction targets and do so at a lower cost per unit of generated renewable electricity, by replacing the Renewable Obligation (RO) with a Renewable Development Premium (a fixed tariff on top of the wholesale electricity price to each technology depending on their state of development).

In fact all the potential new policy alternatives considered were more effective than the current framework, demonstrating a real and urgent case for change. The Renewable Development Premium could also be used to support marine and low carbon technologies in general, to create a market pull once they move beyond the initial demonstration phase.

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