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The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?

Jing Shao Orcid Logo, Jinke Li, Guy Liu

Renewable and Sustainable Energy Reviews, Volume: 183, Start page: 113498

Swansea University Authors: Jing Shao Orcid Logo, Jinke Li

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DOI (Published version): 10.1016/j.rser.2023.113498

Abstract

Increased renewable electricity reduced electricity prices but the costs of consumer-funded support schemes were added to utility bills. Previous studies compared these two components to understand the impacts on consumers. This paper constructs a framework for the electricity sector and provides a...

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Published in: Renewable and Sustainable Energy Reviews
ISSN: 1364-0321 1879-0690
Published: Elsevier BV 2023
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URI: https://cronfa.swan.ac.uk/Record/cronfa63696
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spelling v2 63696 2023-06-23 The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector? 4957a0af8a9dd429738c64c124c3f8e8 0000-0003-0587-317X Jing Shao Jing Shao true false 1d12dcf12aad73117a2a5f43cf233aae Jinke Li Jinke Li true false 2023-06-23 ECON Increased renewable electricity reduced electricity prices but the costs of consumer-funded support schemes were added to utility bills. Previous studies compared these two components to understand the impacts on consumers. This paper constructs a framework for the electricity sector and provides a new angle to examine the impacts of renewable support schemes on consumers and the sector, respectively. Any negative gain to consumers was offset by the positive gain received by renewable generators (and suppliers), leaving the sector unaffected. In contrast, the increase in renewable electricity brought positive gain to the sector as a whole through reduced fossil fuels imports and greenhouse gas (GHG) emissions. We examine the structural change in the generation mix from 2006 to 2020 in the UK and suggest that wind generation replaced coal-fired generation rather than gas-fired generation on the longer horizon. Therefore, using coal-related coefficients and a contribution share of 38.6% for renewable subsidies, we suggest that wind generation supported by the RO scheme brought positive net gain to the sector, exceeding £800 million per annum in 2018–19 and 2019–20. Therefore, the discrepancy in payoffs from the perspective of consumers and the sector imposed a difficult challenge for policymakers, as criticism would be raised if the analysis was done on consumers only. Journal Article Renewable and Sustainable Energy Reviews 183 113498 Elsevier BV 1364-0321 1879-0690 Electricity sector, Imports of fossil fuels, Greenhouse gas emissions, Coal-fired generation, Wind generation, Renewables obligation, EU ETS 1 9 2023 2023-09-01 10.1016/j.rser.2023.113498 http://dx.doi.org/10.1016/j.rser.2023.113498 COLLEGE NANME Economics COLLEGE CODE ECON Swansea University SU Library paid the OA fee (TA Institutional Deal) Swansea University 2023-07-12T16:16:31.0664115 2023-06-23T10:42:32.5964597 Faculty of Humanities and Social Sciences School of Social Sciences - Economics Jing Shao 0000-0003-0587-317X 1 Jinke Li 2 Guy Liu 3 63696__28008__3e6498c9f594409399d98bd19c0f6b85.pdf 63696.VOR.pdf 2023-06-29T14:19:20.6989702 Output 1269588 application/pdf Version of Record true © 2023 The Authors. Published by Elsevier Ltd. Distributed under the terms of a Creative Commons Attribution 4.0 License (CC BY 4.0). true eng https://creativecommons.org/licenses/by/4.0/
title The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
spellingShingle The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
Jing Shao
Jinke Li
title_short The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
title_full The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
title_fullStr The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
title_full_unstemmed The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
title_sort The impacts of consumer-funded renewable support schemes in the UK: From the perspective of consumers or the electricity sector?
author_id_str_mv 4957a0af8a9dd429738c64c124c3f8e8
1d12dcf12aad73117a2a5f43cf233aae
author_id_fullname_str_mv 4957a0af8a9dd429738c64c124c3f8e8_***_Jing Shao
1d12dcf12aad73117a2a5f43cf233aae_***_Jinke Li
author Jing Shao
Jinke Li
author2 Jing Shao
Jinke Li
Guy Liu
format Journal article
container_title Renewable and Sustainable Energy Reviews
container_volume 183
container_start_page 113498
publishDate 2023
institution Swansea University
issn 1364-0321
1879-0690
doi_str_mv 10.1016/j.rser.2023.113498
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Social Sciences - Economics{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Social Sciences - Economics
url http://dx.doi.org/10.1016/j.rser.2023.113498
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description Increased renewable electricity reduced electricity prices but the costs of consumer-funded support schemes were added to utility bills. Previous studies compared these two components to understand the impacts on consumers. This paper constructs a framework for the electricity sector and provides a new angle to examine the impacts of renewable support schemes on consumers and the sector, respectively. Any negative gain to consumers was offset by the positive gain received by renewable generators (and suppliers), leaving the sector unaffected. In contrast, the increase in renewable electricity brought positive gain to the sector as a whole through reduced fossil fuels imports and greenhouse gas (GHG) emissions. We examine the structural change in the generation mix from 2006 to 2020 in the UK and suggest that wind generation replaced coal-fired generation rather than gas-fired generation on the longer horizon. Therefore, using coal-related coefficients and a contribution share of 38.6% for renewable subsidies, we suggest that wind generation supported by the RO scheme brought positive net gain to the sector, exceeding £800 million per annum in 2018–19 and 2019–20. Therefore, the discrepancy in payoffs from the perspective of consumers and the sector imposed a difficult challenge for policymakers, as criticism would be raised if the analysis was done on consumers only.
published_date 2023-09-01T16:16:26Z
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