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Davey calls for move away from renewable energy targets to CO2 cuts

14th May 2012
Energy Secretary Ed Davey has called on Europe to focus on cutting carbon emissions rather than repeating existing renewable energy targets that expire at the end of the decade.
Business, which needs investment certainty, has been heaping pressure on the European Commission to come up with policy to replace goals that expire in 2020.

"We should be moving towards outcome targets," Cabinet Minister Ed Davey told Reuters' Global Energy and Environment Summit today. "Carbon emissions should be the key target."

He was asked whether the UK would support another target for renewable energy once the EU goal to increase the share of green energy in the mix to 20 per cent expires at the end of the decade.

"While we think the renewables target for 2020 is a very good target and we believe we are on track to meet it, in terms of another renewables target, we have to think about what we are trying to achieve here," he said.

He said his preference was for "outcome targets," such as a new goal on carbon cutting, rather than setting another target for renewables, which are becoming more economically viable.

He would not specify what level of new EU carbon target Britain might support, but said Britain was already "one of the most ambitious, if not the most ambitious".

Britain has a national target of reducing carbon dioxide emissions by 34 per cent by 2020 from 1990 levels, compared with an EU-wide goal of a 20 per cent reduction.

It also aims to cut CO2 emissions at least 80 per cent below 1990 levels by 2050.

Some in business as well as members of the 27-nation bloc are keen for a new set of firm targets, but Britain and France, have said a renewables target could be unfair on other forms of low carbon power. Both nations strongly support nuclear power, which generates electricity without any carbon emissions.

Nuclear energy policy in Britain faces major setbacks following reports the cost of replacing ageing reactors increased dramatically in the past year, making power produced from new plants not affordable without Government help.

Power prices are far too low – at less than £50 per megawatt hour – to justify commercial investment in nuclear power without Government help.

Poland, which has defended its right to burn coal, has opposed a new EU renewables goal and also blocked attempts to raise ambition on cutting carbon.

The UK sees carbon capture and storage (CCS) technology as one way to help reduce carbon emissions from power plants and last month relaunched a £1 billion CCS funding competition.

Davey told the summit that building CCS plants in a cluster was "a good approach," boosting chances for companies which share carbon pipeline infrastructure to secure some of the state funding made available for UK CCS projects.

"I think it is a fair point to say that clustering looks like a good approach, but I'm not saying it's the only approach," Davey said.

CCS developers face a July 3 deadline to submit bids for the programme, which will financially support one or several CCS projects to start between 2016-2020.

One such cluster project involves the White Rose CCS plant proposed by British power producer Drax, France's Alstom and BOC who are discussing linking up with a Doncaster-based CCS project proposed by 2Co Energy and Samsung C&T.

The Government will reveal later this year or early next year which projects will sign front-end engineering and design contracts.

Davey also said the Government was ready to support the exploration of shale gas, but that a cautious approach was necessary to ensure shale gas fracking was carried out safely.

"I don't think we should close down any options, but to proceed with developing shale gas, one has to make sure one has a very robust regulatory regime," Davey said.

The Government temporarily imposed a ban on shale gas fracking last year when a number of earth tremors were measured near a site where fracking was being carried out.

An independent report advised last month that the UK Government should allow fracking to continue under stricter reporting guidelines.

The Government is due to make an official response to the report after an ongoing consultation period.

Davey added that shale gas reserves in the UK were not the biggest outside of North America, where its discovery has transformed the US gas market, and that exploration in other countries with larger reserves, such as Algeria, the Ukraine or China, would be more significant to the global market.

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