Policy Exchange

Government could meanwhile save £12.5bn by scaling back future offshore wind schemes

A new report from leading think tank Policy Exchange says Britain should renegotiate its commitment to the European Union’s 2020 renewable energy target. The study says the renewable target is unnecessarily expensive and damages the prospects for reducing carbon emissions over the coming decades by wasting money that could be better used to fund research and demonstration of a wide range of new, low carbon technologies. 

The report – 2020 Hindsight: Does The Renewable Energy Target Help The UK Decarbonise? – examines 16 different plans for achieving the UK target of an 80% cut in carbon emissions by 2050. None of the models showed that the UK’s commitment to producing 35% of its electricity from renewable sources by 2020 was needed to reach its carbon target. The report says that if the UK is to set a leading example to other countries around the world in tackling climate change, then policies need to be both effective in cutting carbon and economically affordable.

The report’s author, Simon Moore, said: “The 2020 EU renewable energy target is hugely and unnecessarily expensive.  The target diverts current and future resources away from measures that could save the same amount of carbon at a lower cost, such as energy efficiency, nuclear and carbon capture-and-storage.

“The UK’s commitment to meeting the EU’s renewable energy target is actually damaging the goal of global carbon reduction.  If the UK is to set a compelling carbon reduction example to other countries we need to show that emissions can be cut at a reasonable cost. The renewable energy target fails to do this.”

The study says that even if the government was not able to renegotiate the renewable target soon, then £12.5 billion – equivalent to almost £500 for every household in the UK – could still be saved by scaling back offshore wind deployment, a hugely expensive technology the government is spending large sums of public money supporting in order to hit its short-term renewable energy target.

Instead the UK should:

• Reform planning rules to facilitate more cost-effective onshore wind  and energy from waste by compensating local communities
• Making it easier to burn larger amounts of “biomass” like renewably-sourced wood pellets in conventional power stations
• Making a greater commitment to energy efficiency, which costs less, saves more carbon and reduces the amount of renewable generation
• Trading with other European countries which are able to produce renewable energy more cheaply than the UK.

Simon Less, Head of Policy Exchange’s Environment & Energy Unit, said: “While the government renegotiates the renewable target, the UK could still save up to £12.5billion – enough money to insulate every UK household’s roof twice over – by spending money on technologies that will still hit the EU’s target.”