Does DECC predict a post-2020 renewable slowdown?
- 22 Jan 2013, 17:30
- Robin Webster and Mat Hope
According to today's Financial Times (FT), official figures show
that the number of new wind farms and other renewable energy
projects constructed in the UK is heading for a sharp decline after
2020. But what do the figures tell us in more detail - and is a
projected slowdown in renewables growth the result of government
policy confusion?
The FT bases its story on figures the Department for Energy and
Climate Change (DECC) last October. In an annex to DECC's
projections for future energy use and emissions from the energy
sector, the government forecasts that the amount of new renewable
power added to the grid will increase by around a factor of 10 up
to 2020. But after then the rate of new power added will
decline.
The FT suggests that rows within the government over renewables
policy, particularly over onshore wind farms, may deter investment
in renewable projects over the next two decades. It adds that the
government could avoid a loss in investor confidence by introducing
a 2030 decarbonisation target for the electricity sector.
Clarifying the projections - in pictures
Let's look at what the figures on the expected new plant builds
show in a bit more detail. The FT says the figures show growth in
renewables will slow in the 2020s, with renewables' share of annual
electricity generation remaining stable at 34 per cent between 2020
and 2030.
The graph below shows how much power DECC expects to come from new
power generation built between 2012 and 2030, in a scenario which
uses mid-level estimates of economic growth and fossil fuel prices:
Graph created by Carbon Brief using figures from Annex I of
DECC's updated emissions projections for October 2012 - total
cumulative new capacity. Figures are from the central
scenario.
As the graph shows, under this central scenario, new renewable
power generation will be built between 2020 and 2030 - but at a
much slower rate. In contrast, the rate of build of new gas power
plant rises sharply during the 2020s.
Another way of looking at it is that currently about 80 per cent
of the power from new plants is from renewable sources. By 2030
that will fall to 50 per cent.
The figures quoted in the FT are from only one out of five
scenarios in the DECC report. But there doesn't appear to be much
difference between the levels of renewable build under the
different scenarios, as our graph demonstrates:
Graph created by Carbon Brief using figures from Annex I of
DECC's updated emissions projections for October 2012 - cumulative
new capacity from renewable sources across five growth and price
scenarios.
The decarbonisation target
An unnamed DECC official tells the FT that the predicted slowdown
in renewables growth is expected to happen partly a result of the
closure of "some existing green power stations" in the 2020s -
although it's hard to see how that's relevant, as the figures being
discussed here relate to new build.
The official also attributes the slowdown in renewables growth to
a lack of government targets for renewables after 2020. The
government is required by a European Union target to increase the
proportion of energy sourced from renewables in the UK to 15 per
cent by 2020, but it doesn't have any renewables target after
that.
The FT seems to agree this is a problem, suggesting that
uncertainty about UK energy policy, particularly continuing
governmental arguments over the inclusion of a decarbonisation
target for 2030 in the energy bill, is harming investment in
renewables.
The government has said it will introduce a decarbonisation target
into the bill - but it won't make a final decision on the level of
the target until 2016. There is still disagreement about whether or
not the 2030 target would help incentivise investment. Guy Newey of
the thinktank Policy Exchange told Carbon Brief that the 2030
target is a "sideshow" when the government's focus should be on
setting a long term European-level cap. Dr Rob Gross of Imperial
College, on the other hand, told us the target is needed to fill
the void as other incentives, such as the EU 2020 renewables
target, expire.
The predictions don't look like good news on the whole for
renewables investors. While DECC told the FT that the predictions
do not represent government targets or its preferred technology
mix, it is perhaps telling that DECC is planning for a future where
the rate of investment in new renewable plant slows down to be
overtaken by gas as 2030 approaches.
