13 November 2015

UK unlikely to meet EU mandated renewables target by 2020

Earlier this week The Ecologist magazine published a leaked letter from Environment Secretary Amber Rudd to a number of other senior Government ministers on the topic of the UK’s progress towards meeting its EU mandated renewables targets by 2020. As a reminder the targets are to deliver 15% of overall UK energy from renewable sources, meaning 30% of electricity from renewable sources and 10% of heating and transport sources. While the letter notes that the UK looks to be on track at the moment it is unlikely to meet its targets by 2020, saying that after 2017/18:

The trajectory then increases substantially, and currently leads to a shortfall against the target in 2020 of around 50 TWh or 3.5% points (with a range of 2.1 – 4.5% points) in our internal central forecasts (which are not public).

In a report in October last year we warned of precisely this (even accurately predicting size of the shortfall):

The UK took on a huge task with its renewables target and recent forecasts suggest that, even if the UK implements all its planned investment in renewable energy, it will only hit a share of 11.5% in 2020 – compared to the target of 15%. Investment has severely lagged targets, suggesting the steep increase in renewable share needed over the next few years will not take place.

There are also a couple of other points in the letter that correspond with our report. Firstly, that the shortfall will largely come from the heating and transport targets rather than the electricity sector target to which the UK might at least get a bit closer. Secondly, that the UK is not the only country struggling to meet its target, although other large countries tend to be closer to doing so (partly because the UK had one of, if not the, highest targets relative to its starting position). Thirdly, that meeting the targets will impose further costs (specifically citing the increased fuel costs to try to meet the transport target).

What happens next?

The letter makes clear that the public line will be that the UK will continue to try to meet its targets. It also presents a few options for trying to actually get there:

  • Push for additional deployment on renewables, particularly in heating and transport.
  • Utilise the planned interconnector from Norway to import clean energy.
  • Support renewables elsewhere to contribute to the EU’s overall target.
  • Create a new market to buy ‘credits’ from states which will overachieve in terms of their renewables target.
  • Build consensus to gain flexibility in the targets.

However, as the letter notes, all of these come with drawbacks. There are limited options for boosting heating and transport renewable sources, with the drawbacks of biofuels well known and the impact likely to be higher costs for consumers. The Norwegian interconnector is yet to even be built and is unlikely to be operational in time. Out-sourcing the target would require significant negotiation and creation of new mechanisms as currently there is not real leeway for this in the EU targets.

The best option would be some flexibility in the targets, not least because the framework changes after 2020 and up to 2030 with headline emissions targets taking precedence and national renewable targets being dropped.

There is a separate consideration here as well. Clearly the government and the European Commission (both of whom have insisted the UK is on course to meet its targets) have been misleading the public on this issue. Surely rather than simply sticking to their guns to save face over what is clearly a failing framework, it would make sense to have a wider discussion about how to progress in this area.

But as we noted in the report, this looks unlikely and would require a significant change of stance from many states. Although, with the election of the new Polish government, pressure on the environment policy will increase from other areas as well.

What if the UK does not meet its targets?

As the letter notes, the UK could face infringement proceedings if it does not meet its targets.  But as we noted in the report:

Ultimately the UK would have to decide if the financial benefits of ignoring EU climate legislation outweighed the economic and political costs of non-compliance. Given the range of potential savings presented above – £16bn to £21bn – the size of potential fines seems to pale in comparison to the potential savings, although there are of course other factors to take into account.

Furthermore, with the framework changing after 2020 it is not clear how vigorously those that don’t meet targets will be pursued. With all this in mind then, it looks as if the approach hinted at between the lines in the letter will continue. The UK will work towards its targets on the current path, but will not go out of its way to heavily subsidise and drive the increase in renewables needed in the final few years. At some point then, a further clash between the UK and the EU on this issue may materialise (if it is still an EU member that is).

Download PDF