Renewable Energy and the Capacity Market Auction Fail


We need to talk about the capacity market.

Renewable energy has been in the news a lot of late. COP21 has obviously promoted that, but the government’s announcement to phase out coal powered stations was a key, positive moment – but one that also contradicted the majority its other policies such as the removal of EIS relief for community energy, the increase of VAT on solar panels and the removal of FiT.

The latest hit for renewables comes in the form of the capacity market auction, which closed today. Of the c. £830-million (46.353GWx£18 per kw), £650 million of subsidies have gone to fossil fuels, with the National Grid announcing 45GW of generation to keep the lights on during peak periods – using £155 million of subsidies to create diesel farms.

As the Guardian headline highlights, there are significant “pollution fears” associated with this. The article also points out that: “The government has been heavily criticised for allowing the involvement of diesel farms – and coal stations – at a time when ministers are in Paris promising to lower CO2 emissions as part of a new climate change treaty.”

The paper’s environmental editor, Damian Carrington, has described it as a fail.

After significant chasing, the Telegraph’s Emily Gosden was able to confirm that 650MW of this is for new diesel farms.

Business Green’s Madeleine Cuff, meanwhile, said that fossil fuels have won big.

Sandbag described it as “a shambles as expected: no new gas or interconnection, very little demand-response, and lots of new diesel funded by generous tax-breaks for the rich.” Download its report here.

FoE’s Alasdair Cameron highlighted that there would be 100x the spend on subsidising nuclear and fossil fuels than on roof-top solar:

All while Morgan Stanley points out, the UK is not significantly under supplied:

The government once campaigned on a message that it would be the greenest government ever. It still utters these words, but sadly doesn’t put its money where its mouth is.

The support we’ve seen in the month since EIS tax relief was ended shows there are hundreds, if not thousands, of businesses and individuals that would be willing to help create renewable projects that would add significantly to capacity – but these subsidies are being removed as they those for fossil fuels continue. And all this before COP21 finishes.