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The U.K.

should hold competitive auctions for most renewable power contracts to bring down technology costs and lower the impact on consumer electricity bills, an analyst linked to the ruling Conservative Party said.

Biomass, onshore wind power and energy from waste could all compete against each other for electricity generation contracts from as early as ne!t year, Policy "!change said today in a report. #olar power may also be able to compete, while a technology specific auction with a fi!ed budget should be held for offshore wind power, it said.

"nergy prices have been a political flash point in Britain, with the opposition $abour party pledging to free%e bills should it win the ne!t election in &'(). That spurred measures by the ruling Conservatives and $iberal *emocrats to cut some charges. The government estimates support for renewables will add (+& pounds ,-&(). to typical a household/s bill by &'&'.

0uctioning 1should be preferred to administrative price setting because of its ability to reveal price information2 and encourage cheaper bids, the Policy "!change said. 1The government should accelerate the planned timetable for introducing auctions.2

The government is trying to spur ((' billion pounds of investment to replace aging power plants by &'&', while still meeting binding emissions and renewable energy targets. To that end, Parliament last week passed a law reforming the electricity market and setting prices for power from different low carbon generation technologies through &'(3.

4ffshore 5ind Cap

5hile the government has said it intends to eventually move to competitive auctions, the transition is 1ill defined,2 Policy "!change said. 6t pointed to fast falling wind power costs in Bra%il as evidence of the benefits auctions can bring.

7or offshore wind, it suggested the government should set a cap on &'&' prices, using an industry goal of ('' pounds per megawatt hour as a 1starting point.2

That/s 8' pounds lower than the price the government has set for offshore wind for pro9ects that start during the ta! year ending :arch +(, &'(3.

Policy "!change also recommended the government should push to scrap its "uropean Union target of getting () percent of all energy including heat and transportation from renewables by &'(). The goal, it said, implies deriving as much as +) percent of power from clean sources.

Policy "!change was set up in &''&, when its first chairman was :ichael ;ove, now the education secretary. 6ts first director was <ick Boles, another current Conservative Party lawmaker, and a third, 7rancis :aude, was also a founder member.