The European Parliament has voted for an increase in the renewable energy target set for 2030 by 8%, taking the target originally proposed by the European Commission in 2016 from 27% to 35%.
The vote follows on from numerous reports highlighting that it is more cost-effective for the EU to set higher targets for itself because of the plummeting cost in renewable energy. Wind is the cheapest form of renewable energy in Europe and it is noted that a 35% target would generate an additional €92bn of investments with 136,000 jobs created as a result, in comparison to a target of 27%. It will also aid the EU in fulfilling its commitments under the Paris Climate Agreement (in particular in limiting global temperatures to an increase of 1.5o C), without hindering the EU's "long term competitiveness".
But what does that mean for us here in the UK?
According to recent figures published by Bloomberg New Energy Finance (BNEF) (see: https://www.theguardian.com/business/2018/jan/16/uk-green-energy-investment-plunges-after-policy-changes ) investment in green energy has significantly dropped (by a whopping 56%) in the last 2 years. The BNEF report not only considers investment in solar and wind but also corporate investment in micro-grids and energy efficiency schemes. One of the key reasons for the significant drop is the lack of clear direction from the Government hindering new entrants from joining the market.
What we at Foot Anstey are seeing is a rise of the secondary solar market, with operational assets being sold to create capital with a view to deploying more solar when grid parity is achieved. We are also seeing a rise in corporate PPAs (supporting new deployment of solar and wind projects). There is also much more positive talk in the wind sector with schemes being deployed without subsidy.
That said it remains to be seen how the commitment made at EU level will (if at all) translate on the national level. After all the UK is a signatory to the Paris Agreement and according to policy advisors it will have to decarbonise "the lion's share of its electricity by 2030" if it is to meet its climate commitments (see: https://www.theguardian.com/environment/2016/nov/17/uk-boris-johnson-ratifies-paris-climate-agreement )
The difference between 27% and 35% in wind is €92bn investments not made and 136,000 jobs not created. And other sectors would miss out too with a lower target: every €1,000 invested in wind creates €250 value for the wider supply chain including chemicals, steel and construction. The Commission is starting to get it: they think going beyond 27% is cost-effective