In a report today, Policy Exchange argued that the government should scrap 4GW of its planned 13GW target for offshore wind generation by 2020.
By building cheaper gas generation instead it could save £700-£900m a year in costs that would have been passed onto billpayers, it calculated.
These savings could be redeployed by insulating hundreds of thousands more homes and doubling public funding for research and development in key low-carbon technologies, it said.
That would still leave enough money to “buy and retire sufficient carbon permits each year to reduce emissions by six times as much as the 4GW of offshore wind”.
It argued: “To achieve maximum overall emissions reduction and low carbon innovation, the electricity market needs to be allowed to invest in gas as a transition fuel, subject to a long-term EU emissions cap.”
Even if gas-fired power plants had to be retired early because of the EU’s emissions cap, it would still be a “far cheaper” interim solution than building offshore wind while the costs remain so high, it said.
Jenny Banks, policy officer at WWF-UK, said: “It’s ridiculous to expect that a dash for gas at the expense of building renewable generation would somehow lead to bigger carbon cuts. This is based on a very idealistic view of the effectiveness of the EU emissions cap.”