That the UK is at risk of missing its binding renewable energy target should come as a surprise to precisely no one
A lot has been written in the past few days about the revelation that the government admits the UK is set to miss its legally-binding target to secure 15 per cent of its energy from renewables by 2020, but one thing has been missing from much of the analysis: namely, the fact this "revelation" should come as a surprise to precisely no one.
It may be useful to have it confirmed, first by leaked letter and then by Select Committee inquisition, that Energy and Climate Change Secretary Amber Rudd is fully aware the UK is currently on course to source around 11.5 per cent of its energy from renewables by the end of the decade, rather than the EU mandated 15 per cent. But no one who works in the renewable energy sector will be in the least bit shocked by the news. Disappointed, yes. Angry, perhaps. But shocked, not so much.
The reality is that for several years industry groups from across the renewable electricity, heat and transport sectors have been privately and publicly warning the target was at risk, primarily as a result of the difficulties of delivering renewable heat and transport technologies. For the best part of two years the renewable heat industry has been arguing clarity on the future of the Renewable Heat Incentive (RHI) and an increased budget from 2017 will be needed if there is to be any chance of meeting the government's goal. Similarly, those working in the biofuel sector warned over and again that confusion over which biofuels counted towards the target and which didn't would put the target at risk. Progress has been made in expanding the UK's electric vehicle fleet, but no one in the sector has expressed any real confidence it can compensate for slower than expected progress on biofuels and ensure the transport target is met.
Rudd's argument the UK is now on track to miss the over-arching renewables target because renewable heat will struggle to deliver its anticipated 12 per cent share and renewable transport energy is unlikely to meet its 10 per cent target needs to be seen in this context. If her letter to ministerial colleagues about the imminent risk of fines and judicial review over the targets did not tell them what they already knew, it certainly should have done. As with the recent slowdown in the energy efficiency sector, both this government and the previous government had been warned over and again that a problem was brewing. They cannot pretend they weren't told.
The reality is that both ministers and officials have long known about the challenges faced by the renewables target, which is why privately there has been an acceptance the renewable power sector may have to over-deliver in order to compensate for the slower progress on renewable heat and transport fuels. Within Whitehall there used to be talk, again privately, of closer to 35 per cent renewable power to make sure the over-arching target was met - talk which has been quietly superseded by Rudd's less ambitious 30 per cent goal.
The problem, as Rudd and her ministerial colleagues are about to discover, is that there were good reasons for the coalition's unofficial plan to focus more on renewable power than heat and transport. It is likely to prove more cost effective and will certainly prove logistically easier to meet the 15 per cent target through significant reliance on renewable power, than it will to 12 per cent of our heat from biomass boilers and heat pumps that most people have not even heard of. Transitioning to a renewable electricity system is tough, but, as Germany has also discovered, delivering a national renewable heat rollout and a huge revamp of the transport system is even tougher still.
As a conveniently timed study from the Energy Technologies Institute (ETI) confirmed this week, even if incentives help create a financial case for installing renewable heat systems significant barriers to deployment remain. The simple fact is that it is often difficult to installing certain renewable heat technologies in certain types of houses, while consumer concerns about unfamiliar boilers abound.
All of which explains why Rudd's argument that the government's decision to intentionally slow the deployment of wind and solar technologies during the second half of this decade has no implications for the renewables target because renewable power should meet its under-lying goal of a 30 per cent share is so flawed. The Conservative's attack on solar and wind power has removed the safety net for the renewables target and it has left the government now facing an even more daunting uphill battle if it is to stand any chance of meeting the legally-binding goal for 2020.
Without a re-think on the level of ambition for renewable power projects, Rudd is left trying to identify new policies that will deliver a step change in the rollout of renewable heat and transport technologies. Everyone will no doubt wish her luck in identifying these policies, but it is unclear how they can be enacted when the Department for Transport has already agreed sharp spending cuts, DECC is under intense pressure to curb spending (and the RHI is very much in the firing line), and supportive policies such as the zero carbon home standard have been axed. The idea the Treasury is about to stump up increased cash for renewable heat and transport when, much to his chagrin, the Prime Ministers' own constituency can't keep frontline services open, appears optimistic in the extreme.
Moreover, there are plenty of people in the clean energy industry who think Rudd's assertion renewables will deliver 30 per cent of power by 2020 relies on a fair wind that the sector is currently being denied. It only takes a few of the larger projects in the pipeline to be shelved or delayed, industry insiders counsel, for the renewable power target to be missed too. And remember, these warnings come at a time when solar subsidies are about to be slashed and it is still unclear when the next round of price support contracts for large renewables projects will even take place. The bulk of the pipeline may yet get delivered, but ministers would be advised to recognise the risks developers face.
All of which means that without an urgent step change in the government's approach to renewable heat and transport that to date ministers have shown little sign of delivering , or a rethink on the short to medium term future for renewable power that ministers are equally loath to countenance, the UK will be forced to either pay other countries to generate renewable power for us or stump up for fines from Brussels. George Osborne may be relaxed about this on the grounds we will, apparently, be running a nice budget surplus by then, but it smacks of a high risk and costly strategy that will see significant economic opportunities forgone.
The government will no doubt argue its moves to cut support for renewable power projects remains fully justified on cost grounds. But without detailed modelling that takes into account the cost of meeting the renewables target through increased investment in heat and transport, the cost of importing renewable power, the cost of potential fossil fuel price volatility, and the cost of simply forking out for any fines it is impossible to judge whether ministers' well-worn claim that they are protecting hard working families is justified.
Of course, there are legitimate arguments that a renewables target was unnecessary in the first place and that the focus should have been on meeting the UK's emissions targets in whatever way the government of the day saw fit. But given the government is also currently off track to meet its legally binding emissions targets for the early 2020s it would take considerable nerve to make that argument, however technically valid it may be.
The UK renewable heat strategy is not delivering at anything like the scale necessary, the country's renewable transport fuel strategy is similarly lacking, and for all the government's protestations the hopes the renewable power sector could make up the shortfall have been deliberately torpedoed. And the most disappointing aspect of all is that no one should be the least bit surprised.
