Government has revealed that the upcoming Energy Bill will not include a decarbonisation target for 2030. Instead a decision on whether to legislate for a 2030 decarbonisation target will be taken after the next election in 2016.
The exclusion of an explicit decarbonisation target will be seen as a significant loss for the Energy and Climate Change Secretary, Ed Davey, and his Liberal Democrat peers who had made no secret of high level disagreements between themselves and a number of senior conservatives led by George Osborne.
However, the Department of Energy and Climate Change (DECC) has announced that the amount set aside by the Treasury for low carbon electricity investment up to 2020 will be £7.6 billion – a significant increase from the current £2.35 billion allocated for low carbon investment and close to the £8 billion figure recommended by the Committee on Climate Change. The figure represents a serious commitment from the Treasury in supporting the development of low carbon technologies in the UK. DECC notes that the level of market support committed to under the Levy Control Framework will “help diversify our energy mix to avoid excessive gas import dependency by increasing the amount of electricity coming from renewables from 11% today to around 30% by 2020.”
Commenting on the announcements, Ed Davey said: “This is a durable agreement across the Coalition against which companies can invest and support jobs and our economic recovery. The decisions we’ve reached are true to the Coalition Agreement, they mean we can introduce the Energy Bill next week and have essential electricity market reforms up and running by 2014 as planned.
“They will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”
The energy market reforms announced in the bill are designed to tackle the problem of replacing the UK’s ageing energy infrastructure. DECC estimates that around £110 billion of private investment in energy infrastructure will be required to keep the lights on.
The Energy Bill announcements come on the back of calls by the leader of the Labour party, Ed Miliband, for government to introduce a decarbonisation target for 2030, he said: “Already billions of pounds in investment is going elsewhere or being put on hold. Thanks to this government, the investors who want to invest in our green sector are shutting their wallets or going elsewhere. Since this government came to power, investment in renewable energy hasn’t gone up, it hasn’t even stagnated – it has halved.”
Commeting on the announced budget, REA Chief Executive Gaynor Hartnell, said: “The commitment of the necessary budget for the renewable power sector to meet its share of the2020 target, is very welcome news. This should help to draw a line under the recent politicking, which has been so damaging to investor confidence.” However, the REA is concerned that misleading headlines in the press will sour public support, Head of External Affairs, Leonie Greene said: “We are concerned that the implications of this decision for household bills are being wildly over-stated in parts of the media. Households will pay £22 this year to ensure around 10% of their electricity comes from renewables. With costs reducing in most forms of renewable power – some dramatically – it should be abundantly clear that securing 30% of our electricity from renewable power in 2020 will be much cheaper than many reports suggest.”
Green groups have moved quickly to criticise the new proposals. Friends of the Earth's Executive Director Andy Atkins said: “The Coalition has caved in to Osborne's reckless dash for gas and banged the final nail in the coffin of Cameron's pledge to lead the greenest Government ever. This decision motivated by outdated ideology will help keep the nation hooked on increasingly expensive gas, drive away green jobs and investment and jeopardise UK climate goals.”
What do you think of the announced proposals? Is the dropping of a 2030 decarbonisation target a mistake? Are you pleased with the £7.6 billion set aside for low carbon investment? Let us know in the comments.