The UK is unlikely to meet its commitment to generate 15 percent from renewable sources, according to the Government’s influential group of climate change advisors.
Lord Adair Turner, Chairman of the Committee on Climate Change (CCC), said the UK will likely miss the target unless there is massive and rapid investment in wind, wave and solar.
In a candid letter to Chris Huhne, the Energy and Climate Change Minister, he called for the Government to “ramp up” efforts to build both onshore and offshore turbines.
The CCC was asked to advise the Government on whether to increase or decrease the current target on renewables.
Lord Turner said it would be “unrealistic” to increase the target beyond 15 percent but at the same time it should not decreased while it is still possible to transform the energy sector over the next ten years by investing in renewable technologies.
However the CCC did advise the Government to reduce the current target to source 10 per cent of renewable energy for surface transport like cars from biofuels by 2020. Lord Turner said that the current target could cause food shortages and deforestation around the world as growing biofuels takes land away from other crops.
In a letter to the Secretary of State, Chris Huhne, the Committee said that the 15% target for 2020 should neither be reduced nor increased: the current ambition is desirable in that it would make an appropriate contribution towards meeting carbon budgets.
The CCC says that at the moment, only 3% of the energy that we use in the UK comes from renewable sources. It calls for a “step change in the rate of progress” and the focus for Government should “be on reducing delivery risks as a matter of urgency”.
Chief Executive of the Committee on Climate Change, David Kennedy said: “Ensuring that more of the energy we use is from renewable sources is vital for meeting carbon budgets. The current target is desirable, but there are significant risks around achieving it. We do not see any merit in raising this target further.
“Instead, Government should focus its efforts on meeting the current target, in particular by providing the right incentives to encourage investment in renewable energy projects in the UK”.
Secretary of State for Energy and Climate Change, Chris Huhne had requested that the Committee advise him on the level of the Government’s renewable energy ambition prior to publishing a broader review into renewable energy, which is due out in spring 2011.
The text of the letter to the Secretary of State in full:
Dear Chris,
Thank you for your letter of 29th July in which you requested that we write to you in September on the level of renewable energy ambition to 2020, as part of our broader renewable energy review.
This response does two main things:
* It summarises our analysis to date of renewable energy ambition in the period to 2020.
* It sets out our proposed approach to the renewable energy review.
It also highlights the need for the energy national policy statements to set the direction of travel for power sector development, phasing out investment in unabated gas generation in favour of investment in renewable and other forms of low-carbon generation, in order to support delivery of the renewable energy target.
Key messages on ambition to 2020
Analysis published in our previous advice to Government and Parliament suggests that the current renewable energy target is broadly desirable but has significant delivery risks. It should neither be reduced (which would increase risks for meeting future carbon budgets) nor increased (which could involve rapidly escalating costs or go beyond the limits of what is likely to be feasible). Rather, the focus should be on implementation, with a number of key risks that should now be addressed by the Government in order that the share of renewable energy can be increased rapidly.
* The current renewable energy target for 2020, and the share of ambition across the sectors (electricity, heat and transport) is broadly desirable in that it makes an appropriate contribution to meeting carbon budgets to 2020 and beyond:
- The envisaged contribution from renewable electricity (to account for around 30% of total generation by 2020, compared with 6.6% in 2009) is appropriate in the context of the need to substantially decarbonise the power sector by 2030, on the path to meeting the economy-wide target to reduce 2050 emissions by 80% relative to 1990 levels. Investment now in a broad range of renewable technologies, but predominantly onshore and offshore wind, will directly contribute to required decarbonisation, and in driving down costs due to learning will provide an additional option for cost-effective investment in the 2020s. It could also provide economic opportunities for UK-based firms.
- A significant increase in the share of renewable heat from current very low levels (around 1.6% in 2009) is necessary to meet future carbon budgets. We have suggested, however, that the costs of achieving the proposed 12% share by 2020 could be very expensive at the margin (for example, replacing gas water heating with solar thermal), and that a slightly lower level of ambition for heat may be appropriate.
- The Gallagher Review suggested that a target of around 8% biofuels in 2020 is sustainable. This ambition is desirable, both in terms of the cost-effective contribution it will make to meeting the first three carbon budgets, and given the need to develop sustainable biofuels for use through the 2020s and beyond (e.g. for plug-in hybrid vehicles, HGVs, aviation). However, the current transport target in the 2009 Renewable Energy Strategy is to achieve 10% of energy from renewable sources by 2020, which is likely to be met primarily through the use of biofuels. This target should be lowered unless new evidence shows that it can be achieved sustainably.
* Meeting the 2020 renewable energy target requires a step change in the rate of progress and entails significant delivery risks, which should be addressed as a matter of urgency:
- Our forward indicators for renewable electricity generation set out key actions that would deliver the 2020 target. A ramping-up in the pace of investment is required (around 1 GW of wind generation was added to the system in 2009, compared to over 3 GW required annually by the end of the decade). Failure to address the following key risks would limit scope for investment and imply a reduced share of renewable electricity in 2020:
* Finalise regulatory arrangements for offshore transmission,
* Agree investment to upgrade the onshore transmission network,
* Reduce the planning application period for new renewable projects and increase the planning approval rate,
* Address uncertainties around financial support mechanisms (e.g. banding of the Renewables Obligation), and ensure that new electricity market arrangements provide appropriate support to renewable generation,
* Consider whether there is a role for public sector financial intermediation, for example, through a Green Investment Bank to provide support for investment in offshore wind.
- Whilst technologies exist for increased renewable heat penetration, and there is potential for supply chain growth, the current level of renewable heat penetration is very low and investments will only be viable with financial support. In order to ensure viability, current uncertainties over the Renewable Heat Incentive (RHI) should be resolved, and complementary instruments introduced to address non-financial barriers (e.g. training and certification for installers, advice and technical support for consumers).
* Future ambition in the Renewable Transport Fuel Obligation should reflect the level of sustainable biofuels as set out in the Gallagher Review, unless there is new evidence suggesting increased availability of sustainable biofuels in the period to 2020.
* Energy efficiency improvement has an important role in supporting deployment of renewable heat technologies and delivering the renewable energy target (which is defined as a proportion of total energy demand). There is currently a high degree of uncertainty relating to energy efficiency policy across all sectors, and this should be resolved in order that potential can be unlocked.
* There is a question over whether an overall 15% renewable energy share could be achieved with a slightly lower level of renewable heat penetration than envisaged in the 2009 Renewable Energy Strategy, and with the slightly lower level of sustainable biofuels as set out in the Gallagher Review. The overall target could still be achievable, depending on the level of energy efficiency improvement and any ongoing impacts of the recession (see Table 1).
The Committee’s renewable energy review
Going forward, and in carrying out the broader review that you have requested, we will assess the scope for renewable energy in meeting carbon budgets and the 2050 emissions target.
Specifically, we will focus on six key areas:
* We will consider the economics of renewable technologies – current and future, including scope for cost reduction, and possible changes in costs due to changes in factor prices - and compare these with other low-carbon technologies (e.g. nuclear and CCS power generation).
* We will consider the extent to which technologies and infrastructure add to system flexibility (e.g. smart grids, interconnection, storage) and provide scope for addressing intermittency of renewable power generation.
* We will assess the scope for renewable energy uptake, given supply chain and stock turnover constraints.
* We will develop scenarios, with a range of renewable penetration across all sectors at different points in time (e.g. for 2030 and 2050), highlighting circumstances when higher levels of investment in renewable energy may be appropriate, and key decision points.
* We will build on our existing analysis of the path to 2020, drawing out any implications from the longer-term analysis for actions and ambition over the next ten years.
* We will undertake high level analysis of risks to delivering the 2020 target, and possible means for mitigating them (e.g. support under the Renewables Obligation, Feed-in Tariffs, and the Renewable Heat Incentive and new electricity market design to support investment in wind generation).
In addition, later in 2011 we will complement our review of renewable energy with a separate review of bioenergy availability, sustainability and economics. This bioenergy review will also feed into our broader advice on the approach to aviation and shipping required under the Climate Change Act and due in 2012.
The draft national policy statements on energy infrastructure
The wider context for the renewable energy target includes the publication of the draft national policy statements for energy, which will guide planning decisions relating to power sector investments, and for which we are a statutory consultee.
The national policy statements provide an opportunity to address the risk that continuing investment in unabated gas generation will displace investment in renewable and other forms of low-carbon generation:
* There is already a large amount of unabated gas generation that has received planning approval,
* A significant number of further approvals and investments would leave limited scope for investment in renewable and other forms of low-carbon generation through the 2020s, therefore putting at risk required sector decarbonisation,
* This risk would be mitigated through the inclusion of a clear direction of travel for power sector development in the Statements, moving away from near-term investment in unabated fossil fuel generation to investment predominantly in renewable and other forms of low-carbon generation.
We therefore recommend that the statements should clearly highlight the need for early sector decarbonisation, and the implications for investment. Investment in unabated gas should be very limited beyond 2020, with almost all investment flowing to renewable and other low-carbon forms of generation.
This would complement other levers to support power sector decarbonisation, including a possible Emissions Performance Standard, and market reforms to encourage investment in low-carbon generation, as discussed in our previous advice on gas CCS demonstration.
We will report on the renewable energy review in spring 2011. In the meantime, I would be happy to discuss this letter with you, the scope of work for the review, and our emerging analysis.
Yours ever
Adair Turner,
Chair, Committee on Climate Change
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