1. Demos Europa The EU 2020 20% renewables target Dieter Helm Professor of Energy Policy University of Oxford November 19th 2008

2. The questions  what is the question to which renewables are supposed to be the answer?  how do renewables address the projected increase in emissions?  what is special about renewables?  is the 20% target appropriate?  can it be achieved? If so, how?  what will be the consequences?

3. What is the question to which renewables are supposed to be the answer?  global warming is global  CO 2  50% by 2030  China  1,000GW coal by 2030  coal 25%  28%  35% share of total global energy and…  world population 6 billion  9 billion by 2050 (1+ billion in China, 1+ billion in India)  emissions trend is upwards  no solution to CO 2  without solution to coal

4. How do renewables address the projected increase in emissions?  renewables are mainly intermittent until storage is available  back-up tends to be fossil-fuel-based  scale limited against timetable  renewables will not keep pace with increases in coal-burn emissions  not much impact on global warming

5. What is special about renewables?  not the only low-carbon source  nothing unique about the economics  significant environmental costs  major network consequences  depend on government/customers’ subsidies  not the cheapest way of reducing emissions But…  politically attractive

6. Is the 20% target appropriate?  2020: 20 – 20 is a political slogan  no CBA justifies precisely 20%  not least-cost way of CO 2   no 20% target for nuclear, CCS or other technologies  energy efficiency  renewables

7. Can it be achieved?  yes, if enough of the national income is devoted to it + significant state direction  no, on existing policies and…  timescale is 11 years only

8. If so, how?  plan grid and distribution networks centrally asap  roll out smart meters asap  direct renewables investments asap  give open-ended financial commitments on behalf of customers asap and…  treat renewables as regulated asset bases (RABs) in utilities

9. What will be the consequences?  high costs  low probability of achievement  limited impact on emissions and…  renewed dash-for-gas to balance systems and…  eventually either batteries to transform renewables economics or other technologies

10. For information  Climate-change Policy—why has so little been achieved, 2008 Oxford Review of Economic Policy, 24:2, 211–238  The EU Climate Change Package — even more radical than it looks, 2008  Caps and Floors for the EU ETS: a practical carbon price, October 13th 2008  Special administration, financing functions and utility regulation, October 23rd 2008  Meeting the Infrastructure Challenge, May 2008  Sins of Emission, Wall Street Journal, March 13th 2008 For more information, visit http://www.dieterhelm.co.uk/publications