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The Europe 2020 climate change targets are not fit for purpose. The assumptions underlying the policies – particularly the renewables target – have proven flawed. Open Europe recommends an urgent reassessment is necessary to provide the EU with a more flexible energy system that is able to respond to geopolitical and economic competitiveness concerns.
23 October 2014
Under the Europe 2020 climate change and energy targets, the UK has committed itself to the largest increase in renewable energy consumption of any EU member. Currently 4% of the UK’s energy consumption comes from renewables, but by 2020 this must almost quadruple to 15%. In terms of electricity generation, this means increasing the share of renewables from 11.3% in 2012 to over 30% in 2020. 
According to the UK government’s impact assessments, energy-related regulations linked to the EU impose a recurring cost of around £8.4bn per year on Britain, compared to £1.3bn a year for UK-derived regulations. Over their life, EU regulations will cost the UK £96bn. The EU’s proposed benefit of £162bn under Europe 2020 is heavily reliant on some flawed assumptions.
Open Europe estimates that, in 2013, the average household’s dual gas and electricity bill was increased by £59 (5%) due to EU regulations or UK implementation of EU defined targets.  By 2020, EU-related regulations or targets will increase annual household bills by £149 (11%). 
The impact on medium sized businesses is particularly troubling. Open Europe estimates that in 2013 the average medium-sized business bill was increased by 9% (£130,000) due to EU regulations or UK implementation of EU defined targets. By 2020, EU-related regulations or targets will increase medium-sized firms’ bills by 23% (£350,000).
To reduce these costs, Open Europe recommends that the UK:
In the long-term, Open Europe recommends that the EU suspends its micromanaging energy policy-prescriptions and instead moves to overall targets with each country free to meet the target in whatever way is deemed the most cost effective.
Open Europe is not taking a position in the climate change debate. Our focus in this paper is to assess the practical policy implications of the EU’s Europe 2020 targets. Specifically, we will accept the broad parameters of the policies to see if they achieve the goals they set for themselves and whether the assumptions and predictions inherent to such policies have proved correct in reality. We acknowledge that there is significant amount of discussion around these broader topics, however, we have not addressed them in this paper.
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 DECC, Renewable Electricity 2012, September 2013 & DECC, Dukes Chapter 5, September 2013
 This is supposed to be offset by £45 in projected savings in efficiency. However, there is no reason why these efficiency savings could not be achieved without the EU’s climate and renewables targets.
 Of the overall regulatory impact on bills, the EU accounted for 43% in 2013, rising to 53% in 2020.