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A week of ups and downs in the renewables industry

January 29th, 2014 | 5:28 pm

The previous seven days have seen both highs and lows for the renewables industry. Last week, the EU released the much anticipated framework on climate change goals for 2030. On the face of it the document signalled positivity. But dig a little deeper and you’d be able to see why some consider it cause for concern with a lack of ambitious renewable energy targets post 2020. In contrast this week sees the launch of the Government’s first ever Community Energy Strategy, which could bring a boost to renewables deployment through the burgeoning community energy sector. But could the policy uncertainty affect the ambition within the new strategy?

The new targets for 2030 do improve upon those set for 2020 but many would argue they only represent business as usual. Considering that the UK is already well on the way to sourcing 20% of all energy from renewables, a 7% increase to 27% by 2030 appears lacking in ambition. The carbon targets have doubled from 20% in 2020 to 40% in 2030, but in view of the UK’s current stance of adopting a “technology neutral approach” to meeting this target, it seems that the role of renewable energy may be downplayed post 2020.

The key point influencing industry opinion is that unlike the 2020 targets, the 2030 targets are not legally binding. Without a legally binding target in place, investor and industry confidence weakens as policy can shift over the longer term. Investors need a stable policy environment, dictated by targets to make long term investment decisions which then drive renewable energy deployment and job creation.

In contrast, the launch of the Community Energy Strategy this week has been a positive note in an otherwise unsettled UK policy landscape. The strategy signals a boost for renewables through the growing community sector, which is already making waves with projects owned and operated by local communities providing them with direct financial benefit.

The strategy proposes structures and mechanisms which will build upon the progress already made by the community sector. This should increase the sector’s ability to support increased technology deployment, cost reduction and job growth. Among some of the celebrated themes within the strategy are a proposal to make community and commercial partnership the norm from 2015, the introduction of the Urban Community Energy Fund to complement the already valuable Rural Community Energy Fund, and the introduction of a one-stop information hub. With greater levels of funding for project feasibility and a coordination of information and support, communities can gain the confidence needed to carry through with these schemes.

Both documents make one thing clear; strong policy is essential to ensure emerging strategy can realise its ambition.

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