Green groups and the energy industry have embraced many of the changes, but there are grumbles
Fiona Harvey, environment correspondent
guardian.co.uk, Wednesday 25 January 2012 14.58 GMT
Energy has been one of the most active areas of EU legislation: the ban on old-style lightbulbs, the introduction of renewable energy targets, an obligation to mix biofuels in petrol, carbon trading for energy-intensive businesses, the scrapping of ageing coal-fired power stations , support for pioneering new power plants that capture and store carbon dioxide, the development of smart meters and energy efficiency labels on electrical appliances.
All of these have driven changes in the UK, from the obvious such as changing lightbulbs to the more subtle such as farmers growing energy crops destined for power stations or use in petrol.
Joss Garman, a campaigner at Greenpeace, says many of the shifts have been wholly positive. "The renewables directive has driven a change in Whitehall culture to take advantage of Britain's unparalleled homegrown clean energy resources, with the opportunity to move our economy away from an over-reliance upon imported gas and coal. This can reduce our vulnerability to spikes in international fossil fuel markets."
Consumers have benefited, too, he says. "European standards for electrical appliances like fridges and lightbulbs, as well as for cars, have helped consumers get the most energy for their money – and begun to separate energy prices from energy bills. Air pollution rules for cars and power stations have driven a move towards cleaning up the energy sector and making the air we breathe cleaner and healthier."
The energy industry has embraced many of the changes, but there are grumbles. The level of prescription – not just changing our lightbulbs but dictating decisions such as whether to invest in coal, gas or offshore wind – is too great for David Porter, chief executive of the UK's Association of Electricity Producers. "Prescribing cuts across the reasons for having a market," he says.
He is also concerned about the impact of regulation on consumer prices. Carbon trading, for instance, adds to the cost of producing electricity from fossil fuels. "Quite major initiatives can be launched by the unelected officials of the European commission, without the accountability that our politicians have to live with. They are quite remote from the impact on the paying customer of the policies that they develop. Decisions made in Brussels can affect energy prices in the member states and when they do, it is the energy companies and governments that incur the wrath of the customers," says Porter.
Jonathan Gaventa, senior policy adviser at the green thinktank E3G, says the EU has failed to go far enough in some cases. "We have a single market in bananas, but not in energy," he points out.
According to EU targets, the UK should have 10% of electricity capacity coming from interconnections with other member states, but it has achieved less than half of that, says Gaventa. More interconnectors would help the UK to use a higher proportion of renewable energy, because when the wind fails to blow it would be possible to meet demand with power from France or Norway.
Other targets have yet to be met. The EU has promised financial support for carbon capture and storage operations in the UK, but none have yet been built. Proposals for a fuel quality directive that would effectively halt the import of fuel from tar sands are yet to come into force.
Greenpeace says some of the EU's policies are counter-productive or ineffective. Doug Parr, the group's chief scientist, says: "By making it law to put biofuels in the fuel tanks of cars across Europe, they've incentivised the destruction of rainforests around the world in the name of fighting climate change. And European governments made the emissions trading scheme the centrepiece of their strategy to deal with rising greenhouse gas emissions, but it's bureaucratic and complicated, it's hard to see what changes in energy infrastructure it has really driven, and it has handed a windfall to some of Europe's most polluting industries."
The traffic is not all one way from Brussels to London. Though they may not acknowledge it, other European member states have a lot to thank the UK for on climate change.
The EU prides itself on leading the world in tackling greenhouse gas emissions, and some of that leadership has been provided by the UK, not least during the negotiations on the 1997 Kyoto protocol, spearheaded by the then environment secretary, John Prescott. Under the treaty, the UK took on one of the most stringent emissions-cutting targets of any EU member: 12.5% compared with 1990 levels. As the bloc's emissions are counted en masse under a "burden-sharing" agreement, the UK's tough target meant that some member states were able to take on less stretching commitments.
What's more, the UK is on track to comfortably exceed its targets, albeit largely because of the "dash for gas" encouraged by Margaret Thatcher as prime minister, which led to the replacement of most of the UK's coal-fired electricity generation with gas-fired power stations during the 1990s. Thanks to the burden-sharing, the UK's over-achievement makes up for the failure of several other member states to meet their obligations under the treaty. Since so much of the EU's international credibility in climate change talks rests on its backing for the Kyoto protocol, without the UK's strong showing the EU's position would be impossible and the long-running negotiations would be in even worse trouble than they are.
Thursday, 26 January 2012
Solar subsidies cuts: UK government loses court appeal
Thousands of homes and businesses may now be able to claim higher payments after the government fails to overturn earlier ruling that cuts were illegal
• Read the court's full judgment
Damian Carrington
guardian.co.uk, Wednesday 25 January 2012 16.52 GMT
HomeSun solar panels. Thousands of homes and businesses may now be able to claim higher payments. Photograph: Simon Burt/PA
The government lost its appeal on Wednesday against a judge's ruling that its cuts to solar power subsidies were illegal, suggesting thousands of homes and businesses will now be able to claim the higher payments.
Three court of appeal judges unanimously rejected the appeal from Chris Huhne, the secretary of state at the Department of Energy and Climate Change (Decc), who said he would be taking the case on to the supreme court. "We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations," he said.
The decision to prolong the uncertainty that has seen the number of solar panel installations crash since 12 December was immediately condemned by opponents of the cuts. Green party MP Caroline Lucas said: "Having lost twice in the courts and been roundly humiliated over the shambolic handling of solar policy, it is absolutely beggars belief that Huhne is planning to appeal to the supreme court."
Daniel Green of HomeSun, one of the companies that took the government to court, said: "Almost everybody except Decc have appreciated the potential and importance of the solar industry – from the National Trust, the Church of England through to the CBI as well as the British people. Surely this must be the point at which Huhne stops taking the side of the big six energy companies and realise that solar is part of our future."
The government announced proposed cuts to the solar feed-in tariff payments in October. Ministers said the cost of solar panels had dropped and unless the subsidy was also cut, funding for a range of low-carbon technologies would be rapidly exhausted. But in December, a high court judge ruled that the government's handling of the cuts was "legally flawed", after a challenge by Homesun, SolarCentury and Friends of the Earth.
Encouraging the development of renewable energy is a key part of the government's plans to meet the UK's legally binding cuts in carbon emissions, although wind power receives far more support than solar power. Green campaigners and the solar industry say many thousands of jobs have been lost and that the government's actions profoundly undermine its claim to be the "greenest ever", though they agree some cut in the solar subsidy was necessary.
On 19 January, the government said that if it lost the legal case, it would fund the higher rate payments for any panels installed by 3 March, which would affect about 3,700 homes and businesses. A Decc spokeswoman said: "We totally appreciate the uncertainty in the solar industry and hopefully the 3 March date will provide some certainty."
Decc's legal fees have cost taxpayers £58,000 so far, though this does not include the costs of their opponents, which the appeal court said Decc must also pay.
The court of appeal refused permission for Huhne to seek a hearing in the supreme court, but this does not prevent the secretary of state going directly to the higher court. He has 28 days to lodge permission to appeal. Some campaigners have suggested this continued uncertainty will reduce the number of new installations, and therefore reduce the number eligible for the higher feed-in-tariff if the government ultimately loses its case.
John Cridland, director-general of the CBI, said: "The judgment should be used to draw a line under this saga, which saw the government scoring a spectacular own goal and confidence in the renewables sector undermined."
Gaynor Hartnell, chief executive of the Renewable Energy Association, said the rejection of the appeal prevented a precedent being set which would allowed the government to make retrospective policy changes in future. "The government is well aware that it would be incredibly unwise to reduce payments to renewable energy producers after they had commissioned their projects, as it knows what immense damage that would do," she said.
The judgment stated: "The question [is] whether parliament conferred a power [to Decc] to make a modification with such a retrospective effect. It did not."
The cuts proposed in October – from 43.3p per kWh of energy generated to 21p – prompted a furious backlash, with the main complaint being the speed of the changes, which were designed to come into effect just six weeks later, on 12 December. Critics also drew attention to the fact that the consultation did not end until 23 December – over a week after the changes were proposed to take place.
In December, a cross-party group of MPs said in a strongly worded report that the reductions were "clumsily handled", had threatened jobs and could have dealt a fatal blow to the scheme, because the changes required homes to meet the C-rated energy efficiency standard before becoming eligible for the solar feed-in tariff.
David Parsons, chairman of the Local Government Association's environment board, said: "By announcing the cuts at such short notice, Decc caused the cancellation of thousands of solar panel installations. Some councils wrote off millions of pounds which had been spent preparing and tendering for installations."