Minister should move to technology-blind auctions to take advantage of the reduction in the cost of wind and solar, says Paul Massara

The government should prioritise cost effective renewable energy generation rather than nuclear and more experimental green technologies like wave power when it runs future subsidy auctions, according to Paul Massara.

The former Npower chief executive told a conference, organised by the Conservative think tank Bright Blue last week, that ministers had to stop trying to “pick winners” and move to technology blind auctions for low carbon generation in order to take advantage of the recent dramatic reductions in the cost of wind and solar energy.

“If you do that nuclear doesn’t win, wind and tidal don’t win,” he added.

He said that the cost of tidal wave power would only be competitive once the technology had been deployed at a much bigger scale than a single plant, like the proposed Swansea Bay tidal lagoon, by which point further savings could have been achieved by more established technologies.

“By the time you get to £60 (per MW hour), onshore wind will be at £40, offshore wind will be at £45 and solar will be £30 and they are known technologies.”

He said that the same economic rationale applied to nuclear subsidies.

“Nuclear is going to be phenomenally expensive and the 10,000 new jobs will come at a million and a half pounds each once you have taken account of the subsidies: tidal will be exactly the same.”

James Heappey, a Conservative MP whose Somerset constituency of Wells is located near to the Hinkley C plant, defended the nuclear programme.

Pointing to the upsurge in electricity demand that will result from the increasing electrification of heat and transport, he said:  “Even if this vision of a highly optimised energy system happens we are not in in a place to choose between nuclear and renewables. We need to build it all.”

But he said that wave and tidal needed to prove their cost effectiveness to justify receiving support.

“If tidal industry can’t put forward a vision of how their costs can come down on a similarly steep trajectory to offshore wind, they don’t deserve to be part of the industrial strategy and they don’t deserve subsidy. Given that the UK is an island surrounded by places where this technology could be deployed it’s worth consideration by government but not blindly at whatever cost.”

What to read next