The UK government last night said that its energy and finance ministries had struck a deal to triple the amount firms can add to customer bills by 2020, in order to support nuclear, wind, solar and other sources of low-carbon electricity.
The agreement (held up for months by discord in the ruling two-party political coalition) sets the country on course to supply 30% of its electricity from renewable sources by 2020, up from 11% today — providing some certainty to the renewables industry, which has complained about a lack of long-term support. Much of the electricity will come from wind energy.
The full energy bill will not be released until next week, but it already seems that the British government doesn’t want to think too long term. Last night’s deal also saw politicians bail out of a proposed bill to cut carbon emissions almost entirely from the electricity sector by 2030. That kind of measure would rule out most new gas power stations — on the other hand, according to the UK committee on climate change, an independent advisory body, it’s also needed if the country is to meet the legally binding targets it has set to cut emissions 80% (below 1990 levels) by 2050.
Reporters on the political beat say that the deal marks a defeat for energy secretary Ed Davey (Liberal Democrat), who had been hoping to clean up the electricity supply. “Crudely speaking, the bill has been a battleground between Chancellor George Osborne [Conservative, finance ministry], who favours gas-powered generation, and the Liberal Democrats, who want clean energy,” explains the BBC. Judging by the postponement of the 2030 electricity-cleaning target to beyond the next election in 2016, Osborne has won this round.
Much of the media coverage has concentrated on how much the renewables push will increase energy prices for consumers (about a 7% increase, according to the energy ministry — though the only other option might be to buy in potentially expensive power from overseas). Energy suppliers will be able to add nearly £7.6 billion (US$9.9 billion) in real terms to electricity bills to pay for renewables investment by 2020, up from £2.35 billion this year. (Reuters, The Guardian).
That agreement was “very positive”, said John Gummer, the chairman of the UK committee on climate change. “This should be sufficient to support investments in renewables required to meet the 2020 EU target and carbon budgets [the five-year plans by which the UK is to meet its emission targets], together with demonstration of carbon capture and storage and investment in nuclear new build.”
But Gummer added: “We are disappointed that a carbon intensity target will not be set until the next Parliament. This leaves a high degree of uncertainty for investors”.