APPENDIX 3: CALL FOR EVIDENCE
The Economic Affairs Committee has decided to conduct
an inquiry into 'The Economics of Renewable Energy'.
Evidence is invited by 16 June 2008. The Committee
will welcome written submissions on any or all of the issues set
out below.
Amid concerns over climate change the Government
aims to increase the use of renewable energy sources, such as
wind, tidal, biomass, biofuels and solar power, alongside other
measures to reduce greenhouse gas emissions such as promoting
greater energy efficiency.
Under EU targets, 15% of energy consumed in the UK
should come from renewable sources by 2020. Yet Government figures
show only 1.8% of Britain's energy came from renewables in 2006.
Electricity generation, as opposed to heating and transport, is
widely thought to have the most potential for greater use of renewable
sources. But while the share of renewables in electricity generation
has been growing, it was still only 4.5% in 2006.
This inquiry aims to set out the costs and benefits
of renewable energy and establish how they compare with other
sources of energy. It will also examine the Government's policy
towards renewable energy.
Among the issues being examined in the inquiry are:
(1) How do and should renewables fit into
Britain's overall energy policy? How does the UK's policy compare
with the United States, Australia, Canada, and other EU countries?
(2) What are the barriers to greater deployment
of renewable energy? Are there technical limits to the amount
of renewable energy that the UK can absorb?
(3) Are there likely to be technological advances
that would make renewable energy cheaper and viable without Government
support in the future? Should, and how could, policy be designed
to promote such technological advances?
(4) Has Government support been effective in
leading to more renewable energy? What have been the most cost-effective
forms of support in the UK and other countries and what should
the balance be between subsidies, guaranteed prices, quotas, carbon
taxes and other forms of support? Should such support favour any
particular form of renewable energy over the others? For instance,
what are the relative merits of feed-in tariffs versus the UK's
present Renewables Obligation Certificate (ROC) regime?
(5) On top of the costs of building and running
the different types of electricity generators, how much investment
in Britain's transmission and distribution networks will different
renewable energy sources require compared to other forms of generation?
Are the current transmission and distribution systems capable
of managing a large share of intermittent renewable electricity
generation and, if not, how should they be changed? Are the rules
about how we connect capacity to the grid supportive of renewables?
(6) How do the external costs of renewable generation
of electricity—such as concerns in many affected rural areas
that wind farms and extra pylons spoil areas of natural beauty—compare
with those of fossil fuels and nuclear power? How should these
be measured and compared? Is the planning system striking the
right balance between all the different considerations?
(7) How do the costs of generating electricity
from renewables compare to fossil fuel and nuclear generation?
What are the current estimates for the costs of "greener"
fossil fuel generation with carbon capture and storage and how
do these costs compare to renewable generation? What impact do
these various forms of electricity generation have on carbon emissions?
(8) How do the costs and benefits of renewable
electricity generation compare to renewables in the other key
forms of energy consumption—transport and heating?
(9) If the UK is to meet the EU target that by
2020 15% of energy consumed will come from renewables, will most
of this come from greater use of renewable sources in electricity
generation? If so, why? Should British support for renewables
in other countries be allowed to contribute towards meeting the
target for the UK?
(10)How would changes in the cost of carbon—under
the European emissions trading scheme—affect the relative
costs of renewables and other sources of energy? Would a more
effective carbon emissions trading scheme remove the need for
special support of renewable energy?
(11)What are the costs and benefits of the present
generation of biofuels? Will there be a second generation of biofuels
and, if so, what are the estimated costs? What are, or are likely
to be, the carbon emission impacts of first and second generation
biofuels, and what are the other relevant environmental effects?
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