Solar set to beat nuclear on strike price alone

Solar set to become cheapest low carbon technology from 2018

The strike price agreed by the Government for nuclear power of £92.50/MWh [1] for 35 years is set to be beaten by solar power. This is before the additional costs of nuclear waste management are considered. The UK anticipates nuclear going live in the 2020s – assuming it doesn't suffer the same delays and cost increases as other reactors across Europe – by which time solar power will be cheaper.

Whereas nuclear is set to receive £92.50 for 35 years, which ‘could be subject to adjustments downwards or upwards in relation to operational and certain other costs', the STA anticipates solar is set to require around £86/MWh for 15 years in the year 2019/20 (based on 2012 prices). If, like nuclear, solar's support was spread over 35 years instead of 15, then the strike price would be even lower.

STA CEO Paul Barwell said:

"Renewables must be treated on a level playing field. Solar power has already achieved unprecedented cost reductions over the last three years and is projected to continue to reduce costs in real terms over the next decade. Solar power risks being unfairly constrained in the UK even when it will be cheaper than other low carbon technologies."

Bizarrely the Government still insists it is providing no subsidy for nuclear power. The definition of no subsidy provided in a written Ministerial Statement by former Secretary of State Chris Huhne is that "that there will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation" [2]. Under this definition all renewable power sources will receive the same subsidy as nuclear power. The STA finds this position and its implications difficult to understand.

International cost reductions

The STA anticipates further significant cost reductions in solar power when the UK again has access to world pricing from 2016. The STA's best estimates of solar panels world pricing will be around €0.30/W by 2018/19. Forecasting future prices is notoriously difficult, but the solar market is now expanding rapidly across Asia and Africa, driving further cost reductions. Demand is set to more than double by the end of this decade.

The extraordinary cost reductions in solar power have been noted by Sir David King and The Royal Society recently. Even Shell's New Lens Scenario sees solar power as the world's largest source of energy by 2070 [3].

Comparing apples and oranges

However, comparing solar and nuclear strike prices is only part of the picture. The annual government grant given to the Nuclear Decommissioning Authority to deal with nuclear waste is £2.3 billion [4], giving an average cost per UK household of £87, considerably higher than the current support given to all renewable power sources to deliver 11% of electricity.

Unlike nuclear power, a highly centralised technology that is often state owned, solar power is characterised by hundreds of companies in fierce competition enabling everyday people and businesses to take direct control of their power supply.

Paul Barwell said:

"There are nearly 500,000 solar electricity generators in the UK and this is set to double by 2015. These homeowners are taking back control of their supply and their costs and relying less on the Big Six. This technology is truly revolutionary because it turns the electricity system on its head and puts the power to generate directly in people's hands. That also means very high levels of competition and innovation in the solar industry, which has got to be good for consumers."

Solar is the most popular technology

Solar power is the most popular power generation technology scoring 86% in DECC's recent opinion tracker [5]. A YouGov poll for the STA showed over 70% support for good quality solar farms [6]. The STA is pressing the solar farm industry to pursue best practice through its ‘10 Commitments' in which solar can actively support British biodiversity and continued agricultural use [7].

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