Renewable energy targets are bad policy. Here are five reasons to prove it

A green, competitive Europe doesn’t need them and shouldn’t have them

Share
Related Topics

In its White Paper on a 2030 framework for climate and energy policies released today, the EU announced an overall target requiring renewable energy to supply some 27 per cent of the EU's energy by 2030 but did not set country-specific targets.

This is being viewed as a definitive sign that the EU is ditching its climate protection goals as well as losing its leadership role in climate policies. 

In fact, the opposite is true.  So long as the EU has a functioning emissions trading scheme and is serious about bold climate action, renewable energy targets are bad policy for five reasons. 

First, it’s time for support to clean energy to mature into a support for innovation and for up-and-coming technologies. Government support for renewable energy through the “20-20-20” climate and energy package has done what it could: In Europe and elsewhere, if a higher carbon price is provided through tighter caps, zero rated renewable energy can already compete and beat fossil fuel energy. Job done. Move on.

Second, in setting renewable energy targets, the EU is abandoning a technology neutral stance and betting on specific technologies and industries. This is wrong. Government must be technology neutral. It must set the rules and allow those who are better qualified to assess the risks and benefits and invest accordingly. It is impossible to precisely predict how the energy sector is going to develop and Governments must reject the impulse to do so. The Government’s role is to create a long term stable framework which is designed to ensure that the precious commodity which clean air is has a price which increases in real terms over time. Only then will investors be able to make a convincing case to their shareholders to invest in low carbon technology. Setting renewable energy targets undermines this framework.

Third, while renewable energy targets have stimulated demand for clean power and caused the price of production to come crashing down, they force energy generators to build capacity to meet targets, not to maximize profit.  They don’t help to build a competitive low carbon economy. If it’s more profitable to invest in solar power in Spain and in wind power off the coast of the UK, then German, French and Italian money should flow to these markets.

But arbitrary targets lead to renewable energy capacity being diverted to the wrong place at the wrong time. If solar gives a better yield in Spain than in UK, what is the point of paying industry to install solar panels in UK? If the UK has 40 per cent of Europe’s wind energy, why are we erecting wind turbines in Germany? A Europe-wide efficient low carbon energy system will create jobs and build renewable energy capacity where it provides the highest returns, assessed as a combination of electricity price and net carbon benefit and not as a combination of a power price and a compliance with a Government target.   

Fourth,  Big Oil continues to invest billions in exploring and producing more gas because their shareholders demand profits. As and when a properly functioning European emissions trading market imposes a strong and rising carbon price which makes renewable energy more profitable, Big Oil will want to do what their shareholders tell them and investments in fossil energy will decrease, dramatically and suddenly.

Renewable energy targets cannot deliver this result. Who said the stone age didn’t end because it ran out stones? Our affair with fossil fuels won’t end because we ran out of fossil fuels. It will run out because alternative sources of energy become more attractive and that will happen when they become consistently cheaper.

Turbines of the Burbo Bank off shore wind farm adorn the skyline in the mouth of the River Mersey Turbines of the Burbo Bank off shore wind farm adorn the skyline in the mouth of the River Mersey

 

 

 

 

 

 

 

 

 

 

 

 

 

Fifth, clean energy targets have done their modest bit to stimulate innovation and today, it’s our capital markets that are letting us down. The EU Commission is rightly turning its attention to this issue. Global climate and energy markets need a properly functioning emissions trading scheme which prices greenhouse gas emissions at a level which promotes innovation and technology change.

Low prices which allow lignite - the dirtiest type of coal - to be burnt are indeed a total failure but I am willing to bet that the day after the long-term price of carbon goes up, the lignite will go out. With a proper carbon price we can look forward to an energy network where renewables no longer displace nuclear; where hard-pressed consumers throughout Europe no longer pay astronomical feed-in tariffs to a small number of investors; and where emission permits are no longer so cheap that it’s more profitable to burn lignite. 

The EU Commission is perhaps not credited often enough when it’s right, but it is very right this time: Zero rated renewable energy should be able to compete with fossil fuels as long as there is a strong and rising price for carbon. Renewable energy targets are bad policy because they distract from this goal.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Embedded Linux Engineer - C / C++

£35000 - £45000 per annum: Recruitment Genius: A well funded smart home compan...

Recruitment Genius: Senior Software Engineer - Python / Node / C / Go

£35000 - £45000 per annum: Recruitment Genius: *Flexible working in a relaxed ...

Recruitment Genius: Senior Bookkeeper

£20000 - £25000 per annum: Recruitment Genius: This accountancy firm have an e...

Recruitment Genius: Junior Developer / Mobile Apps / Java / C# / HTML 5 / JS

£17000 - £28000 per annum: Recruitment Genius: Junior Mobile Application Devel...

Day In a Page

Read Next
Newspaper stands have been criticised by the Child Eyes campaign  

There were more reader complaints this year – but, then again, there were more readers

Will Gore
 

People drink to shut out pain and stress – arresting them won’t help

Deborah Coughlin
A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?