What should the Government be doing now?
116. The key conclusions we would highlight from
our inquiry are these:
- Britain has the greatest potential for renewable
energy of any country in Europe.
- It currently produces less than 3 per cent
of its energy from renewablesa tiny proportion which compares
very unfavourably with almost all other European countries.
- The Government has set a number of targets
for renewable production. We will certainly not meet the interim
target of 5 per cent of electricity from renewables by 2003. On
the basis of present trends, we are unlikely to achieve much more
than half the 10 per cent target for 2010.
117. We therefore believe that there is an urgent
need for the Government to show leadership and:
- address the difficulties in gaining planning
- indicate tried and tested technologies which
will deliver over the next decade; and
- address the conflicting priorities of market
liberalisation and cheap electricity as against our Kyoto obligations.
118. We see the Government's primary task now as
being to translate the implications of the PIU Report into a set
of specific policy commitments and an energy action plan with
the emphasis on action. There has already been huge levels
of consultation in this area. If the White Paper simply goes over
the same ground as the PIU Review, it will be a failed opportunity
to address the immediate problems which are jeopardising even
the achievement of the 2010 targets.
119. The development of specific policy commitments
will involve, for example, setting out in detail how the government
intends to implement the PIU recommendations on the 20 per cent
2010 renewables target, on carbon pricing, and on energy efficiencyie.
what policy mechanisms, targets and deadlines it will use to achieve
these aims. Such a process will also necessarily involve assessing
the adequacy of current government policies to promote renewablessomething
which the PIU Review did not do, though it was an objective of
the original study.
120. There are, however, a number of other actions
which the Government need to carry out as a matter of urgency,
before the White Paper is issued.
- The Government must ensure that Ofgem's review
of NETA in its first full year place primary importance on environmental
impacts, including the impacts on renewable generators and on
carbon emissions. As Ofgem itself appears
to have no responsibility for monitoring environmental impacts,
the DTI and DEFRA will therefore presumably need to provide an
analysis of this. This analysis should be published.
- The DTI should review options for incentivising
the development of renewables under NETA, so that the playing
fieldso far from being tilted against renewables as at
presentshould favour them. There
are a wide range of possible measures which could be adopted.
- The DTI should prepare and implement legislation
to amend the statutory duties of Ofgem in order to incorporate
the promotion of sustainable development as a primary duty. It
should also strengthen the guidance to Ofgem on social and environmental
matters to reflect such a change, and should issue this guidance
as soon as possible. The guidance should also require Ofgem to
carry out thorough environmental appraisals of all proposals and
to monitor the environmental impacts of its policies.
- The ODPM should revise planning guidance for
renewables as a matter of urgency and incorporate a presumption
in favour of renewables. It should also,
in conjunction with the DTI, set renewable energy targets for
Government Offices and consider ways of providing financial incentives
for regional and local government to achieve them.
- The DTI should work much more closely with the
devolved institutions in Scotland, Wales, and Northern Ireland,
to share past experience, to ensure that the best legislative
arrangements are in place, and to co-ordinate future action.
121. It is also unfortunate that the Government has
chosen to ignore the PIU recommendation that, as a matter of urgency,
a crossdepartmental Sustainable Energy Unit should be established
and become operational by September 2002. This was seen as of
great importance in drawing together future energy policy. Yet
the Government's consultation document fails to highlight this
recommendation, and in their evidence to us the DTI gave no indication
that they were intending to fulfil it. The present distribution
of responsibilities between departments lacks coherence, as evidenced
by the fact that there are now two sustainable energy policy unitsone
in the DTI and one in DEFRA.
In view of the widespread agreement that exists in this area,
we would actually go further than the PIU. In our view, a crosscutting
unit for sustainable energy policyas recommended by the
PIUis unlikely to be sufficient, and we recommend that
the Government should set up a Sustainable Energy Policy Agency.
The agency should be responsible not only for sustainable energy
policy, but for managing and coordinating capital grant and research
and development funding in view of the present fragmented responsibilities
in this area.
Looking outward: international
122. Energy policy is increasingly becoming an issue
which requires international collaborationwhether for reasons
of self-interest such as security of supply or economic competitiveness,
or because of the overriding need to reduce world poverty and
the impact of climate change. Earlier this year, we reported on
UK preparations for the World Summit on Sustainable Development
(WSSD) to be held in Johannesburg in August.
In this context, we note the importance attached in the WSSD draft
implementation plan to: "improving access to reliable, affordable,
economically viable, socially acceptable and environmentally sound
energy services and resources ... through various means such as
enhanced rural electrification and decentralized energy systems,
increased use of renewables ... and enhanced energy efficiency,
by intensifying regional and international cooperation in support
of national efforts".
123. We welcome this emphasis and hope that the Summit
will result in many specific projects where the UK, in partnership
with others, may promote renewable energy developments where they
are most needed. In many parts of the world, for example, solar
PV is already the cheapest way to provide electricity to remote
villages where there is no network infrastructure, and it is likely
to become even more competitive by 2020. But we are mindful of
the dismissive attitude which the Secretary of State for International
Development displayed when the issue of renewable energy arose
in our discussions with her.
The UK is already some way behind other countries such as Denmark,
Germany and Japan. If it is to maximise the benefits such opportunities
may present, the UK Government will need to take a rather more
positive attitude than the Secretary of State and adopt in the
words of the PIU review a 'leading role' in the international
development of energy policies and projects.
155 PIU, Resource Productivity and Renewable Energy,
Scoping note, March 2001. Back
Cf PIU Energy Review, para 8.13. Back
Third Report from the Environmental Audit Committee, session 2001-02,
UK Preparations for the World Summit on Sustainable Development,
HC 616. Back
Draft plan of implementation for the World Summit on Sustainable
Development, advance unedited text, 12 June 2002, para 9. Back
Third Report from the Environmental Audit Committee, Session 2001-02,
UK Preparations for the World Summit on Sustainable Development,
HC 616, QQ 156-167. Back