Back in 2008 the then French president Nicholas Sarkozy used his country’s presidency of the EU to secure agreement for 20% of Europe’s energy to come from renewables by 2020. It was a move that kickstarted the mass deployment of renewable technologies across our continent.
So what should we make of the European commission’s latest proposals for 2030? These proposals have a stated aim of increasing the share of renewables across the EU as a whole to 27%, but at the same time remove the central tenet and driving force of the current arrangements – specific legally-binding targets for each and every EU country.
Many commentators and industry groups are far from satisfied. “The commission’s proposal for 2030 is a lame-duck”, according to Frauke Thies of the European solar association. “The lack of ambition in not ensuring there are national binding targets is a disappointment”, said Maria McCaffery from the UK wind trade body. The fear is that governments may focus on traditional or as-yet-unproven technologies like nuclear or Carbon Capture and Storage to try to reduce carbon emissions, rather than drive forward our renewables transition.
But are such concerns justified, and is there really a risk that renewables could be sidelined in the UK after 2020?
Renewable energy up to 2020
Providing all goes to plan, the UK will see a massive increase in renewable energy in the next six years. In 2012 just over 4% of the energy we used came from renewable sources. By 2020 the government estimates this will reach 15%, meaning the UK meets its binding share of the EU’s overall 20% target.
If this doesn’t sound like much, remember that it is a percentage of all energy – not only electricity but heat and transport too. Looking at solely electricity, we currently get around 11% from renewables, and this is due to rise to 33% by 2020. According to National Grid, this is will mean more than a doubling of current levels of wind power and a four-fold increase in solar power in just six years.
The EU 2020 target is playing a critical role in this transformation. In a period where the UK is already close to near-term carbon reduction goals due to deindustrialisation and a long-term trend of reduced coal use, it is unlikely our government would have put in place the necessary measures to support emerging renewable technologies without a binding obligation to do so. The rapid cost reductions that we have witnessed over recent years may never have materalised.
Such measures include the feed-in-tariff which guarantees a fixed income for electricity from small-scale renewables, and the Levy Control Framework which provides £2.5 billion in support for renewables this year, rising to £7 billion in 2020. As long as these remain in place with investment continuing to flow, we should meet our 2020 target. This will be a genuine achievement if it comes to pass.
The ‘big hairy’ carbon target for 2030
Looking further ahead to 2030, whilst it looks unlikely we’ll have the same kind of binding renewable target, the European Commission is proposing a meaningful carbon reduction target of 40% below 1990 levels. Of all the top-down objectives the EU could set, the carbon target is considered the big one, or the “big hairy” one as it’s recently been called. It will be a driving force behind increasing amounts of renewables after 2020.
Enough to maintain the UK’s existing climate change goals
The way EU carbon reduction targets work is that each country contributes differently according to its circumstances. Under the new plans, some countries will reduce emissions by more than 40% by 2030, others by less. The UK will be in the first group – expected to continue the impressive reductions we’ve already made over the last two decades.
And critically, this should be sufficient for Britain’s pre-existing climate change targets to be maintained in the face of political pressure.
The UK’s fourth carbon budget – agreed by parliament under the Climate Change Act – requires our greenhouse gas emissions to be cut by 50% by 2025. According to the Committee on Climate Change, this cut was calculated on the assumption of EU-wide action at the level that is now being proposed, meaning there is “no legal or economic basis to change it”. This matters, because the coalition government has previously threatened to water down our domestic ambitions if European action failed to materialise.
The need to decarbonise our electricity grid
So what will a 50% cut in greenhouse gases require?
Every serious analysis which has looked at how the UK can achieve these kinds of cuts concludes that our electricity sector must come first and go furthest. It is the easiest part of our economy to decarbonise, and we already have the technologies we need.
In 2013 each unit of electricity from the National Grid (kilowatt hour, kWh) resulted in an average of445g of carbon dioxide being emitted into the atmosphere. This figure irons out some big differences between coal power which emits a lot more, and wind power which emits no CO2, but it gives a sense of the overall picture.
By 2020, thanks to more renewables and less coal, this will be down to around 210g CO2 per kWh. By 2030, in order to meet our 50% economy-wide carbon target, it will need to be 100g according to the government, or 50g according Committee on Climate Change.
Renewable energy between 2020 and 2030
And what do we need to do to get our electricity emissions down to 100g CO2 per kWh by 2030? Recent detailed economic and power system analysis by the government (here and here) and National Grid (here) gives a one-word answer to this question – renewables.
It’s impossible to predict exactly what quantities of different types of generation will be in the mix in 16 years time but the government’s modelling shows that to meet our Climate Change Act targets, we’ll need the equivalent of at least 12 gigawatts (GW) of offshore wind and 6GW of smaller renewables like solar to be built in the 2020s. This is on top of the doubling of wind and quadrupling of solar that we’ll already have seen by 2020.
To put this in context, just 1GW of offshore wind turbines produces enough power each year to meet the average electricity demand of over 700,000 homes.
But even these impressive figures are probably undercooked. 12GW of offshore wind between 2020 and 2030 represents the extra renewables we’ll need if we also stop using coal, build 7 new nuclear reactors (10GW) and put carbon capture and storage on five 1 megawatt (MW) coal plants. Yet you only have to consider the recently announced inquiry the government’s approach to supporting Hinkley C to see that the chances of seven new nuclear reactors being built anytime soon are diminishing by the day.
And if nuclear and CCS don’t get built by 2030 in the quantities the government hopes? Then renewables will be the only technologies that can fill the gap and be built in ever bigger amounts, at ever increasing costs, whilst ensuring we play our part in tackling climate change too.
The EU’s proposed 2030 targets may not be perfect, but they go just far enough.
Sam Friggens is a writer for renewable energy funding platform Abundance Generation. You can follow him on Twitter: @Sam_Friggens. This article originally appeared on Abundance’s blog, where you can also find details of the assumptions Sam used for this article.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
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