Only Business Can Get UK to Meet 2020 Renewable Energy Target

September 14, 2016

Mark Wakeford, Managing Director of EvoEnergy, comments on the recent news that the UK is unlikely to meet its 2020 renewable energy target and adds his thoughts on how businesses all over the country must be the catalyst to help us get over the line.

Mark Wakeford comments;

“MP’s have spoken out that the Government looks set to miss its legally binding commitment to provide 15% of total energy usage from renewable sources by 2020. The UK agreed to these targets and committed themselves to EU legislation in 2008, with the Climate Change Act (2008) passed by parliament into British law to establish longer term decarbonisation targets.

With Britain heading for Brexit, there is some uncertainty about the future of these targets, which could result in financial penalty. However, I believe that the UK Government is unlikely to vary these targets as it would send an unedifying message to the rest of the World that the UK is neither focussed on meeting pre-agreed environmental targets or those agreed in Paris at the COP21 conference last December. This would destroy UK industry’s remaining reputation and any chance of influence in the rest of the world.

The 15% target requires renewable energy to provide 30% of electricity, 12% of heat and 10% of transport fuels. With the heat and transport targets not even half way to being met, the one positive is renewable electricity generation has – until recently – been on track to meeting and potentially exceeding its target, currently standing at over 22%.

Nevertheless, the Government’s failure to properly incentivise all three areas has contributed to the shortfall in the 2020 targets. The National Grid have projected that the initial 2020 target is now likely to be hit in 2022 at the very earliest. The reasons for this failure include the deep cuts to the feed in tariff in January and, more recently, abolishing the Department of Energy and Climate Change, which have unnerved potential customers.

If government needs to promote renewable energy generation then what are the options?

  • A ‘carrot’ to incentivise installations through renewed tariffs appears highly unlikely when an indirect tax on consumers will only increase energy affordability problems and the Treasury is unable to fund further incentives.
  • A ‘stick’ therefore looks more likely for businesses in the form of ‘encouragement’ to reduce consumption or the production of carbon dioxide through the ESOS legislation.
  • Higher energy bills for both commodity and non-commodity elements of your energy bill will be seen as an incentive. A Government that believes in free market principles is unlikely to control energy prices.
  • The time left to achieve these targets is limited and our Government may choose to back the most successful technology that can be deployed with the minimum of fuss, which is PV on large rooftops. Many customers of Evoenergy recognise the inherent value to their businesses of installing green, renewable generation and they are taking advantage of the small remaining subsidy provided through the feed-In tariff. EvoEnergy’s customers and others may yet enable the Government to meet its PV target, but it will be unlikely to achieve the full renewable target without some active engagement with businesses.”

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