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: Web Developer - Junior / Mid Weight

£15000 - £25000 per annum: Recruitment Genius: To support their continued grow...

Recruitment Genius: Marketing Data Specialist

£22000 - £25000 per annum: Recruitment Genius: They are the go-to company for ...

Recruitment Genius: Search Marketing Specialist - PPC / SEO

Negotiable: Recruitment Genius: This is an opportunity to join the UK's leadin...

Recruitment Genius: Sales Administrator

Negotiable: Recruitment Genius: This caravan dealership are currently recruiti...

Day In a Page

Read Next
 

Errors & Omissions: Hang on – that’s not how it’s supposed to be written

Guy Keleny
Rafael Nadal is down and out, beaten by Dustin Brown at Wimbledon – but an era is not thereby ended  

Sad as it is, Rafael Nadal's decline does not mark the end of tennis's golden era

Tom Peck
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test