EU changes it's renewable energy targets

Last week the EU announced that it was going to change its renewable energy targets although at the time of writing the significance of this is as yet unclear.

 

At present the target is to cut emissions measured against those produced in 1990 by 20 % by 2020 and for 20% of energy consumption to come from renewable sources by that date. This policy has certainly had a major impact on the British countryside with wind turbines and solar PV “farms” springing up all over the place.

 

These projects have been driven by subsidies and it these subsidies which have been blamed by major electricity supply companies for pushing up our energy prices and this subject has clearly become a “hot political potato”.

 

But, if we believe climate change is important, there is little doubt that significant financial incentives will be required over a long period to encourage the huge investment which is required to shift our energy supply chain away from fossil fuel based technologies to low or zero greenhouse gas emitting sources of energy.

 

It is believed the EU’s change in policy will still involve setting targets on the reduction in greenhouse gas emissions but countries will be given freedom on how to achieve these targets. This will cause concern in some quarters because the viability of many renewable energy projects is dependent upon the receipt of subsidies and provided there is confidence that the subsidies will continue then so too will investment.

 

It is believed the new target will be a 40% reduction in 1990 greenhouse gas emissions by 2030 but each country can choose how to achieve this, whether that be through investing in renewables, nuclear or perhaps by burning gas rather than coal for instance. As you can see this could result in a shift in emphasis away from renewable energy technologies if the government so wishes. This could have a effect farmers and landowners, many of whom have looked at renewable energy projects as a significant additional source of income.

 

It is too early to tell what impact if any the recent EU announcement will have on our domestic energy policy but a lack of certainty going forward is a concern highlighted by Jonathan Scurlock, NFU chief advisor on renewable energy and climate change. He said, “The failure to send a clear message to the renewable energy supply chain makes some investors nervous.” He went on to comment that the government showed a “lack of enthusiasm” for renewables while showing encouragement of fracking.

 

Clearly fracking is yet another whole subject which could have an impact on our countryside on which we do not have space to comment here but on which there will no doubt be many more column inches written in the coming years.

 

Carter Jonas’ energy team can provide advice and comment on any Renewable Energy proposals and for any queries in the South West please contact Thomas Ireland in their Wells office on 01749 683386.  

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Carter Jonas' Energy Index

The Energy Index 2013 has just been published by Carter Jonas’ research team and I think this will make interesting reading to farmers, landowners and anyone with a general interest in the subject of onshore renewable energy technology.

The report gives a brief over view of the five principal technologies which are anaerobic digestion, biomass heating, solar photovoltaics, hydroelectric power and wind and then analyses how they perform against a variety of measures. These include efficiency, cost of installation, annual operating costs, development timeframe, planning risk and the financial support mechanism of each technology type.

The key objective of the index is to rank the various technologies against the various measures to help landowners and farmers through the difficult decision making process as to which technology may be the most suitable for them to pursue. Clearly the physical characteristics of every site are different and these will often be the most significant factors guiding a landowner as to what opportunities may be available but I would suggest this index will be of interest to anyone who is at the start of this thought process.

The energy sector is clearly high on the political agenda and at the time of writing we await an anticipated announcement in Chancellor’s autumn statement on potential changes to the manner in which green levies are to be raised in order to fund renewable energy developments. Clearly if these changes result in significant cuts in the subsidies which are paid to encourage certain types of renewable developments this could have a significant impact on the viability of certain technologies.

Having said that, the renewable energy sector and its costs of development and pricing structure are already changing; there are a number changes to the financial support mechanism which are in the pipeline and forthcoming government announcements may result in further changes. It is uncertainties such as this which last week saw the shock announcement that RWE Innogy has decided to cancel the proposed development of the so called “Atlantic Array” which was planned to be a 240 turbine wind farm located off the North Devon Coast.

In light of this volatility it is Carter Jonas’ intention to update their Index on an annual basis although will be worth keeping in close contact with their energy team to ensure you keep abreast of changes as they happen because waiting a year for an update in this fast moving industry will be too late.

Anyone interested in receiving a copy of the index should contact James Stephen on james.stephen@carterjonas.co.uk or they can download a copy from the Carter Jonas website: www.carterjonas.co.uk

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk