The outcome of the discussions on the EU 2030 energy and climate framework will have a huge impact on the UK’s attractiveness as a destination for renewables investment. That’s why I wrote to David Cameron and Ed Davey last week.
The more attractive the policy framework for renewable heat, power and transport fuels, the lower the perceived investment risk and the lower the cost of capital. This in turn accelerates deployment of renewable technologies, and the associated benefits of emissions reduction and job creation. As technologies deploy, the industry matures and reaps economies of scale, while also learning from experience and ongoing innovation to further bring down costs.
Most bioenergy technologies and applications are already cheaper than nuclear power, for instance. If current learning rates can be maintained, onshore wind and PV will join their ranks in the early 2020s, before Hinkley has generated any new power at all.
The key thing is getting that 2030 framework right. It is encouraging to see the government come around to supporting an EU-wide 27 per cent renewables target, but clearly renewables targets are seen as a burden rather than an opportunity.
We’re pushing for binding targets as the best way to keep the momentum going. They won’t undermine investment in nuclear and CCS (where is the other 73 per cent going to come from?) but they will boost renewables investment.