Even The Renewables MMI Was Affected by Brexit, UK Says it Won’t Hit 2020 Goals

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In its future energy scenarios report, the U.K.’s network operator, the National Grid, said even its most optimistic scenario suggests it will miss the European Union’s15% energy consumption from renewable sources 2020 climate target for member-states by at least two years.

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“While we believe the electricity sector can achieve its contribution to the 2020 renewable target, we believe the progress required in the heat and transport sector is beyond what can be achieved on time. As a result, none of our scenarios achieve the 15% level by the 2020 date. Our (most optimistic) Gone Green scenario is the earliest to reach this, meeting the target by 2022,” the report stated.

Renewables_Chart_July-2016_FNL

Our Renewables MMI fell 2% to 53 this month as it still traded in the narrow range it has fluctuated in for much of the year, but the U.K.’s situation mirrors that of many industrialized nations and shows just how difficult it has been to reliably grow renewable energy markets without burning coal or natural gas as backups. Despite the best of intentions, the U.K. simply cannot make its 15% energy reduction targets and the Leave campaign took full advantage of that fact last month when it promised citizens that it would get an independent U.K. out of such deals. But can it? Really?

Can the UK Escape EU Climate Deals By Leaving?

Withdrawing from the E.U. will certainly give the U.K. an easier route on heat and transportation policies in the short-term. The island nation will no longer be obligated to hit the 15% reduction target for 2020 whether it actually leaves two years from now or later.

But when it comes to renewable electricity, long lead-times to build new wind and solar farms (particularly wind in the U.K.) mean most of the projects needed to hit the E.U.’s 30% reduction goal for 2030 have already been granted planning permits and government money has been spent on their contracts. In other words, the genie is out of the bottle for almost all of the U.K.’s 2020 goals and even for some of its 2030 goals. It’s going to be really hard to put that genie, economically, back in the bottle.

The U.K.’s Own Goals Are More Ambitious in the Long Term

There’s also the fact the U.K.’s own unilateral Climate Change Act actually imposes even tougher requirements for cutting carbon emissions. Under the Act, the U.K. must cut its carbon emissions by 80% on 1990 levels by 2050. Again, whoever is Prime Minister and in charge of the National Grid can push the 15% 2020 goal and even the 30% 2030 goal set by the E.U. further off, but that 80% 2050 goal will only hang more ominously over the U.K. like a figurative sword of Damocles if politicians decide to do that.

The 2008 Climate Change Act also requires the government to set legally binding “carbon budgets,” which have already been set up. A carbon budget is a cap on the amount of greenhouse gases emitted in the U.K. over a five-year period. The committee provides advice on the appropriate level of each carbon budget. The budgets are designed to reflect a cost-effective path to achieving the long-term objective of an 80% reduction by 2050. The first four carbon budgets have already been put into legislation and run through 2027.

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The early implementation of regulations makes it even more difficult for any future government to get out from under the U.K.’s own 2050 targets as utilities, local governments and the federal bureaucracy has already appropriated money to achieve its short-term goals. So, the possibility of a repeal of the 2008 Climate Change Act is highly unlikely, as well, although some are vocally advocating it just as they did Brexit when that idea was called “bonkers” and we all know how that turned out.

Actual Renewables Prices

Japanese steel plate increased to $776.15 a metric ton from $722.15/mt, a leap of 7.5%. Silicon fell to $1,818.34 per mt this month from $1,838.80/mt in June, a drop of 1.1%. Chinese neodmymium fell to $50,642.96/mt this month from $51,668.67/mt in June, a loss of 2%.

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