UK sees five-fold growth in renewables to hit climate targets

www.environmental-finance.com
17 July

The UK government yesterday announced plans for how the country will reduce its greenhouse gas emissions by 18% against 2008 levels by 2020, unveiling additional support for renewable energy generation. Power generators and heavy industry will be responsible for cutting 22% of their emissions, or 250 million tonnes of carbon dioxide-equivalent - around half of the total reduction needed.

Renewable energy generating capacity will need to grow five-fold by 2020, to supply 30% of the country's energy needs, according to the UK Low Carbon Transition Plan. The White Paper says the government will provide up to £120 million ($197 million) of support for offshore wind and £60 million for wave and tidal power technologies. New nuclear energy stations are also part of the plan and the UK will invest up to £15 million to establish a manufacturing research centre, though the first new stations are unlikely to be online before 2018.

Proposals for developing a smart grid will be announced later this year, but the government envisages that smart meters be installed in every home by 2020. The plan aims to cut emissions from homes by 29% and government policies will channel about £3.2 billion to help households become more energy efficient. The government put the total cost of its White Paper policies at about £25 billion-29 billion.

Neil Bentley, director of business environment at business lobby group the CBI, described the white paper as "a promising start", but said "question marks remain over the ability of these plans to attract the £150 billion of private sector investment needed to renew our energy infrastructure, improve energy security and allow us to meet climate change targets." Richard Gledhill, head of climate change and carbon markets at PricewaterhouseCoopers, said: "With continuing constraints on capital markets, this [level of private investment] will be challenging in the short term.

The plan provides the UK context for private sector investment, but ultimately business needs a more robust and long-term international policy framework to support investment plans." Keith Allott, head of climate change at WWF-UK, said: "It's great that the government is now taking steps to ramp up delivery of clean, renewable energy within the UK. This is possibly the first time a UK government has shown it is serious about this issue.

"Unfortunately, the government has failed to provide the incentives that will make investors turn away from traditional power sources like unabated coal and move towards low carbon, green energy."