Coalition drops plan to raise renewables target

Deliverability issues are behind the government’s decision not to raise its renewables target beyond 15% by 2020.

The government has dropped plans to raise the UK’s renewables target after the Committee on Climate Change (CCC) warned it would be infeasible or lead to “rapidly escalating costs”.

In a statement issued in September, the energy and climate change secretary Chris Huhne blamed “the legacy inherited by the coalition” for making a higher target unrealistic.

The coalition made a commitment to go beyond the current target of 15% renewable energy by 2020, in its programme for government (ENDS Report 424, p 5). The target, set by the EU Renewable Energy Directive, is legally binding.

Mr Huhne’s party, the Liberal Democrats, drove the agreement. Its election manifesto pledged to get 40% of the UK’s electricity from renewables by 2020 – up from the 30% needed to meet the existing target (ENDS Report 423, pp 30-34).

However, the coalition’s pledge was subject to advice from the CCC. In early September it wrote to the government counselling against any increase.1  “The target should neither be reduced nor increased,” it said. “Rather, the focus should be on implementation.”

Delivery issues need to be addressed “as a matter of urgency” if the UK is to meet the target, it added. These include long planning times and the low approval rate for onshore wind, and uncertainties around the future of the Renewables Obligation (RO). The coalition has said it wants to extend feed-in tariffs to large-scale renewables and the implications of this for the RO are unclear.

The CCC also questioned if there is enough finance to develop the 12 gigawatts of peak capacity offshore wind needed to meet the target. It points to a recent report by PricewaterhouseCoopers (PWC), which said banks are unwilling to lend to developers because of the high level of construction risk.2

Some £10bn is needed to finance projects, yet the planned ‘green investment bank’ may only have a £2bn fund (ENDS Report 426, pp 12-13). PWC suggested the government underwrite construction risks using a consumer levy. The CCC did not limit its comments to renewable electricity generation. The government may have to lower its ambitions on renewable heat and biofuels, it added.

Government modelling assumes 12% of the UK’s heat supply will come from renewables in 2020, but the committee said the costs “could be very expensive at the margin” as more solar thermal systems have to be installed. The cost of meeting a target of 11% renewable heat would be £120 per tonne of carbon saved, but the extra percentage point would cost £172/t.

The government has said 10% of transport fuels will be biofuels in 2020, but the committee said the objective should be reduced to 8% “unless new evidence shows that [a higher level] can be achieved sustainably”. The government should focus on reducing energy demand to compensate for these changes, it adds.

The Renewable Energy Association reacted positively to the letter, while saying cuts to the biofuels target would be illegal. Under the Renewable Energy Directive 10% of road transport fuels must come from renewables by 2020, although the commission will have a review in 2014 amid concerns over biofuel sustainability.

The CCC will report in more detail on the future of renewables next year. This will include an analysis of feasible levels of renewable energy generation in 2030 and 2050. It is also undertaking a review of bioenergy looking at available supplies of biomass, and whether they can be economically and sustainably exploited.

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