UK set to miss renewable energy targets, warn MPs

The UK will miss its EU renewable energy targets, the House of Commons’ Energy and Climate Change (ECC) select committee has warned.

Good progress in decarbonising electricity will not compensate for slow progress on heat and backwards progress on transport, says the committee’s report.

Further, its existing policies are insufficient to meet the EU-mandated targets and the fault lies with the government. It says:

The ECC Committee exists to scrutinise the government, but its conclusions carry no legal weight.

Targets

The UK may have voted to leave the EU, but for the moment it remains a member of the bloc and this means that it is still bound by the EU’s renewable energy targets.

As part of the EU’s overarching goal of producing 20% of its energy from renewable sources by 2020, the UK must source an average of 15% of its energy for transport, heat and electricity from low- and zero-carbon sources.

This is divided into a 30% target for electricity, 12% for heat and 10% for transport fuels. These sub-targets are set by the UK in its National Renewable Energy Action Plan. Energy is considered renewable if it is sourced from wind, solar, hydro, bioenergy, waste energy, or heat from the air, ground and water. For reference, in 2015, power generation, transport and residential heating accounted for 33%, 31% and 16% of the UK’s carbon emissions, respectively (pdf).

So far, the UK is progressing well on electricity. In 2015, it sourced 22% from renewables and is expected to surpass the 30% mark by 2020.

In transport and heat, however, the news is less good. The government’s uncertainty that it would meet its targets was acknowledged by a leaked letter in 2015 from Amber Rudd, then secretary of state for energy and climate change, where she projected that only 11.5% of UK energy would be renewable in 2020.

The UK is currently not even halfway towards its heating target, and progress towards its transport target actually reversed between 2014 and 2015, with the proportion falling from 4.93% to 4.23%.

Heat

There are two principle policies in place designed to meet these targets: the Renewable Heat Incentive and the Renewable Transport Fuel Obligation.

The Renewable Heat Incentive (RHI) is a subsidy that the Treasury gives to producers of renewable heat. It is used to support biomass boilers, heat pumps and solar thermal. Participants are paid a tariff per unit of energy produced.

The government has proposed changes to the RHI, including spending more on heat pumps and less on biomass.

But the report suggests that the government has got its priorities wrong, and that these proposed reforms would not be the optimal pathway to the 2020 renewable heat target. It says:

The think tank Policy Exchange has also issued a report today on renewable heat. It reaches a similar conclusion about the unsatisfactory level of reliance on heat pumps when it comes to decarbonisation.

The government’s renewable heat strategy, developed in 2012 and 2013 by the now defunct Department of Energy and Climate Change, relies on this technology to provide more than 80% of domestic heating by 2050.

But to do so would be extremely costly, says Policy Exchange. Installing these pumps in 80% of homes would cost around £200bn, with an extra £100bn required to expand and upgrade the power system to cater for additional electricity demand.

Richard Howard, head of environment and energy at Policy Exchange and co-author of the report, tells Carbon Brief:

Instead, this report recommends that the government focuses on energy efficiency, decarbonising gas use, and greener gases, such as biomethane, to reduce emissions from heating in the long term.

Transport

The Renewable Transport Fuel Obligation (RTFO) is the policy responsible for ensuring that renewable transport targets are hit by 2020. This sets a minimum quota for the proportion of biofuels that must be included in the sales of major transport-fuel suppliers.

This cap is currently set at 4.75%, where it has been frozen since 2013. But this is well below the level required to hit the target, the report argues. Meanwhile, the Committee on Climate Change has listed the RTFO as “at risk of failing to deliver”.

Those consulted in the report suggest that sales of biofuels have suffered because of the freeze on the cap. Vivergo, a bioethanol producer based in Hull, told the committee:

The report itself argues that the RTFO should be raised to approximately 9% by 2020. “It is clear that the 2020 renewable transport target will not be met without rapid progress on the RTFO,” it says.

It also recommends that the government should consider introducing a new biofuel blend called E10, which consists of 90% petrol and 10% bioethanol. The UK would be far from the first to do so — the USA, Brazil, France, Germany and Finland are already using the blend.

Conclusion

The ECC Committee report is based on the principle that the government needs to hit its 2020 renewable energy targets for electricity, heat and transport.

The simultaneous Policy Exchange report suggests that these are too prescriptive. “We are saying it is an unnecessary constraint and should be scrapped,” Howard tells Carbon Brief, emphasising that the focus of his report is “how to decarbonise in the most effective manner”.

The report says that the government’s focus on having to increase the share of renewable technologies in heat means that non-renewable options, such as energy efficiency and decarbonisation of the gas grid, have been overlooked. This, they say, has been to the detriment of actually achieving carbon reductions.

Instead, the report says that the government should create the market conditions which allows all technologies to compete on a level playing field, rather than favouring certain technologies through subsidies.

While the situation is currently uncertain, the decision to leave the EU could open space in the future for reconsidering its renewable energy targets at the EU level, says Howard — though the ECCC report says that reneging on EU targets now “will undermine confidence in its commitment to future targets”.