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The value of carbon and renewable energy generation targets: How effective are they?

Published on November 05, 2021

As we venture through the much anticipated COP26 conference in Glasgow and an inevitable cascade of bold governmental declarations in relation to carbon net zero ‘targets’, I have come to wonder just how effective target setting is in reality.

As I have 20-plus years’ experience in the renewable energy sector, I have spent most of my career living in an ever-changing and ambitious landscape when it comes to targets. I have mostly viewed this through the narrow lens of the UK marketplace, so would not suggest for one moment that my thoughts here automatically translate directly to other nations and cultures. However, I thought it would be interesting to step back and reflect on how effective targets have actually been to date.

While carbon-free energy generation has been around for centuries, the commercial scaling up of such forms of energy generation in the UK largely gathered momentum from the mid-1990s onwards. Within this period, 2020 was ultimately earmarked primarily via the 2009 EU renewables directive as a key date when 15% of all energy consumption would come from renewable sources in the UK. In the final reckoning, we fell short of the target, with renewable electricity generation exceeding its contribution; renewable transport fuel/energy meeting its target; but renewable heat generation only managing to hit half of its expected input.

On first reflection, it is apparent that the UK’s failure to meet its 2020 target is down to poor deployment of renewable sources of heating. However, when we dig a bit deeper behind the numbers, it is apparent there has been an underlying and alarming downward trend in the growth of renewable electricity generation since 2015.

2015 saw the greatest level of new renewable energy generation with 6 gigawatts (GW) coming into operation. By comparison, only about 2.5 GW were added in 2019, with a further 1 GW added in 2020. While COVID-19 restrictions in 2020 are likely to have delayed the coming into operation of wind and solar farms that year, it is clear that the sharp decline was in evidence before the COVID-19 outbreak in 2019. It is also clear from the statistics that the decline in the deployment of solar PV and onshore wind was a key factor in this trend.

So why then, in the absence of any dilution in the 2020 target, has this dramatic downturn been seen for renewable electricity, irrespective of its exceedance of its contribution to the target? In this instance, it is impossible to ignore the rapid removal of the government-supported financial subsidy mechanisms that coincided with this visible decline in deployment. Such mechanisms had underpinned the rapid increase in the deployment of renewable energy up to 2015 and it would not be unreasonable to suggest the evidence supports the assertion that, while targets have an important role to play, it is the financial incentives and support that have exerted, arguably, the most critical influence on the rate and scale of deployment in this case.

Looking ahead, the UK government recently raised the bar in committing to “fully decarbonise our power system by 2035” as part of its Net Zero Strategy. As the levelised cost of energy (LCOE) for all mature technologies is now at levels that do not wholly depend on subsidy, reintroduction of the financial support for wind and solar PV; increases in hybrid/optimised development (i.e., making more efficient use of grid capacities); increasing moves towards repowering older assets and extensions of operating life; and most critically, continued support for the offshore wind market, would make the future look positive in regaining momentum.

However, whether the 2035 target will be hit, time will tell. Given the current direction of travel in terms of renewable electricity deployment, it will be challenging at best. We must also bear in mind that a significant proportion of renewable electricity is likely to be required to power heat solutions in future, i.e., ground source heat, air source heat and hydrogen production, which further increases the demand for renewable electricity. History has taught us thus far in the UK that without the right support in place (and not just financial), targets will not de facto simply be met because they are boldly announced or indeed transposed into law.

This takes me finally to the wider global market, the COP26 conference, and in particular, the issues surrounding the support needed for nations less able to move towards the carbon net zero transition. Twelve years ago, at the COP15 conference in Copenhagen, commitment was made by the more affluent nations to mobilise $100 billion a year from 2020 to support nations less able to cut their carbon emissions. Irrespective of any carbon net zero targets such nations may set, such financial support will be essential in the quest to cut global emissions. However, while international support for tackling climate change has increased hugely since 2015, the $100 billion target was not met in 2020. The eyes of the world will be on Glasgow over this current two weeks and, no doubt, the air will be thick with carbon net zero targets and commitments. However, it is the effective use of incentives and support, including financial ones, that will ultimately decide whether targets are hit or not. Where better to start than fulfilling that commitment to less wealthy nations? And we can only hope that the reaffirmation to hit and exceed the $100 billion target, given during the first week of COP26 proceedings, is adhered to.

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Mike Kelly

Renewable Energy Business Development Director, RSK

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Mike is an experienced environmental impact assessment (EIA) and environmental and social due diligence (ESDD) specialist with over 24 years’ experience, including as a developer within the renewable energy generation sector. As the renewable energy director at RSK, he focuses on developing the company offering and building strong alliances within the sector.

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