The Renewable Energy Foundation (REF) today expressed concern at the cost findings from the Electricity Networks Strategy Group, a government backed industry and stakeholder forum, who published their projection of electricity grid expansion needs for 2020.
This study estimates that expansion will cost ca. £4.7 billion, which relates to government’s own press release estimate of around 1,000 km of new grid.
REF is concerned that the ENSG remit was restricted to ensure consistency with previous government positions, and that as a consequence the extent and cost of grid expansion has been underestimated.
In concrete terms, ENSG assumes that renewable capacity will generate 147 TWh of electrical energy in 2020. This amounts to ca. 35% of the current demand (400 TWh).
More realistic estimates for meeting the EU Renewable Energy target suggest that renewables would have to contribute closer to 45% of a greater demand, approximately ca. 200 TWhs, with a much larger renewables fleet.
This larger quantity of electricity would require a much greater level of grid expansion, and very significantly enhanced interconnectivity with the European grid, with a 70 to 80% increase in cost (ca. £8 billion).
The cost of grid expansion (depreciation, return on capital, running and maintenance costs) is recovered through consumer bills, and, according to some estimates, for every £1 spent on grid expansion an annual charge of roughly 11.75p is made annually on the consumer.
Thus the ESNG's estimate of £4.7 billion would result in a standing charge on the UK's electricity bill of approximately £550 million a year and, if REF's estimate of likely grid expansion is correct, this annual charge rises to ca. £900 million a year.
Dr John Constable, Director of Policy and Research for REF said:
"The ENSG’s important and illuminating study has unfortunately been politically constrained, and thus shies away from facing the reality, which is that the scale and costs of current policies are very much higher than currently admitted, with consequent unforeseen risks to the economy and to the fuel poor."
For further information please contact Margareta Stanley on 020 7930 3636 or 07968 049 832 or email
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Notes for Editors
1. Renewable Energy Foundation is a UK registered charity supporting research into renewable and alternative energy. The Foundation is supported by private donation, and has no corporate membership or political affiliation.
2. Copies of the study can be obtained from http://www.ensg.gov.uk/
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