Cheat sheet: UK renewable energy strategy

A strategy, now that's what we need.

And what a strategy it is. A tenfold increase in renewable energy capacity from 1.5 per cent of the UK energy mix to 15 per cent by 2020; a world in which renewables account for over 30 per cent of electricity supply, 14 per cent of heat supply and up to 10 per cent of transport fuels; 160,000 green collar jobs and another 100,000 from the nuclear industry; a reduction in UK carbon emissions of 20 million tonnes; a reduction in gas imports of up to 16 per cent.

Anything else?

Hold on, there's 289 pages of this thing. I haven't even mentioned the installation of seven million solar panels; a 90 per cent increase in the use of ground source heat pumps, 3,500 onshore wind turbines and 7,000 offshore generating around a third of the UK's electricity; biomass power plants fuelled by waste and timber capable of providing six per cent of electricity; and the goal of removing carbon from the power system altogether by 2050.

Sounds expensive.

Well, full blown industrial revolutions don't come cheap. The government reckons we're looking at £100bn of investment over the next 12 years and it wants it all to come from the private sector.

How are they going to convince them to do that?

With the promise of cold, hard cash. The reason this strategy is so different to all the vague commitments the government has made to the renewable sector in the past is that it is backed up by some serious policy instruments – most notably in the form of generous incentives. The existing Renewables Obligation subsidy mechanism will be extended to guarantee investors inflated returns for longer, a new incentive scheme for renewable heat will be introduced and at long last it looks like we'll get a feed in tariff.

Really, that's taken long enough?

It's still not a 100 per cent certain and it's coming years after the feed in tariff that is driving Germany's well documented renewables revolution but it should mean that offices and homes can finally get an above market price for any power they generate on site. At long last they will have a valid reason to install microgeneration technologies that goes beyond environmental conscientiousness.

We've had renewable energy incentives in the past though. What makes the government think these ones will work?

Well, for once the strategy looks pretty comprehensive. It's not just about chucking incentives at the problem and letting the market sort it out. The strategy also outlines how the government plans to get its hands dirty and intervene to remove all the planning and technical barriers that have hampered renewable energy projects to date. The National Grid appears to have been told in no uncertain terms to pull its finger out and get projects connected to the grid quicker, while sweeteners are also being prepared to encourage it to accelerate the development of new grid capacity. Meanwhile, the Ministry of Defence has been instructed to drop its opposition to wind farms and the new planning bill, while loathed by environmentalists who fear it will enable an increase in road and airport expansion, should also give the government to streamline planning processes for renewables projects.

Sounds impressive.

Doesn't it just. Environmentalists and the renewables industry have been fulsome in their praise, hailing it as evidence of a sea change in the government's thinking. Andy Lee, chairman of the Renewable Energy Association, called it a "phenomenal step in the right direction", while Maria McCaffery welcomed the new strategy as a "routemap for a green energy revolution".

So everyone's happy?

Not quite. The CBI is pretty cross about the EU targets and reckons a focus on energy efficiency would prove more cost effective than trying to hit an arbitrary renewable energy target. There are also concerns that the strategy will force energy bills up still further, although you could argue that the higher bills get the more incentive there is for energy efficiency measures. Some in the renewables sector are also concerned, albeit for different reasons. They reckon it's also a case of déjà vu. The Energy White Paper back in 2003 promised a huge increase in renewables and it never really happened. Consequently, there's a real sense from some that they'll believe when they see it.

And when will they see it?

That's another sore point. This is just a consultation document and not the final strategy. It will be consulted on until September, then the final strategy will be released early next year. That means a lot of the measures included in the strategy will not see the light of day until 2010, by which time there will be the small matter of an election to contend with.