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

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

Front-End Developer (JavaScript, HTML5, CSS3, C#, GUI)

£55000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Front-End Deve...

Graduate C# Developer (.NET, WPF, SQL, Agile, C++) - London

£30000 - £40000 per annum + Benefits + Bonus: Harrington Starr: Graduate C# De...

Day In a Page

Read Next
Would you fork out to spend time on Sting's Tuscan estate?  

Happy to pay for the privilege of picking olives? Then Sting might have a job for you...

John Walsh
Clockwise from top: Zafran Ramzan, Razwan Razaq (main picture), Adil Hussain, Umar Razaq and Mohsin Khan were sentenced for grooming teenage girls for sex in 2010.  

Nothing can make up for the trauma of Rotherham's abused young girls, but many more heads must roll

Jane Merrick
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?