The European Union’s latest targets for the UK to achieve are a 20% improvement in energy efficiency – 10% of vehicles powered by biofuel and 15% of energy derived from renewable sources.
But let’s be in no doubt. To get close to these targets will require a huge effort because we’re starting from a relatively low base.
Economists also believe that achieving these targets could result in a 15% rise in electricity costs. This may or may not turn out to be correct, but on the other hand, the economic opportunity of achieving such goals is immense.
For example, it’s being said that these targets imply that if you relate it to the number of offshore wind turbines needed, the figure could be as high as 20,000.
If you were the owner of a wind turbine manufacturing company you’d be licking your lips at that prospect. Pity we’re not, really.
But there are other interesting little details about the EU proposal, not least of which are the proposals for carbon trading, which I’m actually still trying to get my head round.
However, leaving that aside for the moment, the EU has also said that its investment will be more focused on areas where renewable energy can be generated more efficiently.
In other words, where there is the infrastructure and, of course, the resource to make best use of renewable energy technologies. Scotland will score well on the resource side, but badly on things like investment levels, grid capacity and planning delays.
Countries that show more willingness to adopt renewables by ensuring these mechanisms work well will inevitably attract more EU support.
However, it is worth noting here that the one particular aspect of the European Commission’s new proposals that could work against us in this respect is the proposal to introduce an EU-wide scheme for what amounts to ROCs, or renewable obligation certificates.
The implication of this is that UK electricity companies will be able to buy ROCs from anywhere in the EU.
So there is a potential danger here that Scottish electricity companies could begin not to depend upon Scottish renewable energy developments for their supply of ROCs but simply buy them elsewhere from countries where much more progress is being made in rolling them out. The implication here being that Government and industry must invest more in the infrastructure and improve the mechanisms (planning, in particular) to enable a faster roll-out of renewables projects.
But, of course, such a move would attract serious criticism from objectors’ groups because it means less scrutiny of planning applications for things such as windfarms and pylons.
Complicated? You bet it is – but that’s the EU for you.
The commission is nothing if not devious, and when you take out all the hyperbole, what they are really saying is that those countries that don’t get on and put more effort into developing renewable energy will potentially be penalised in other ways. Quite clever, really.
But let’s forget electricity for a minute. I’m still concerned that so little effort seems to be going into developing new liquid fuels.
The commission has admitted that the target of 5.75% biofuel by 2010 is unlikely to be achieved, although it has maintained its target of 10% road biofuel by 2020.
However, biofuel has come in for a kick in the rear end following a report by the Environmental Audit Committee that says it is ineffective at cutting greenhouse gases and can be expensive. This, plus all the other criticisms that biofuel has come in for recently, is really not encouraging.
So-called second-generation biofuels may be a better bet, but we really don’t know yet.
The thing that really worries me is that I simply don’t see how on Earth we will ever be able to produce enough of the feedstock stuff to truly satisfy existing demand, let alone any additional growth.
There’s another issue, though, and that is whether 10% is actually a high enough target.
Forget the global-warming thing; the big question is whether, in 13 years’ time, conventional liquid fuel production, whether from oil, gas liquids or whatever, will still be able to supply 90% of demand as it stands then.
So this is as equally complex a problem as electricity generation – except, of course, we’re much less further along in solving it.
I am, of course, bubbling over with enthusiasm and exuberance at the latest move by the Treasury. Angela Eagle – who, I was surprised to learn, is the Exchequer Secretary – has recently hosted the first summit of the Carbon Markets Experts Group.
She said: “We are working to ensure that we make the UK the centre of a new and rapidly growing market in carbon trading.
“I am keen to listen to the industry and ensure that the Government takes every opportunity to facilitate innovation and growth in this area.”
Think that’s good, then how about this?
Environment Minister Phil Woolas, who also attended the summit, said: “A strong carbon market is essential in our fight to tackle climate change. Businesses play an important role in spearheading green investments and shaping our low-carbon economy. The City is not simply the centre of the UK economy, but a key player in a far bigger environmental picture.”
So there you are, folks. We’re going to solve the whole climate-change thing and, of course, the energy supply problem by ensuring the City makes a shed-load of cash out of commissions on sales of carbon credits.
Such brilliance and vision simply astounds me.
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