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Consumers ‘may pay for energy in Spain’ to help Britain to meet green targets

Britons could be forced to subsidise renewable energy schemes in other countries to help to meet the Government’s green targets, even though they would not generate any electricity or jobs for the UK.

Consumer groups have described the so-called “statistical transfer” renewable energy trading scheme as nonsense.

The coalition revealed its support for the plan at the end of last month, arguing that it could save consumers money if it was cheaper to build a wind farm or solar park overseas. By awarding subsidies funded by levies on consumer bills to foreign renewable projects, the electricity generated would count towards meeting Britain’s legally binding green target. Renewable energy developers have put forward renewable projects in Tunisia, Spain and Portugal that could sell power under the trading scheme.

Britain is struggling to meet a European Union target to generate about a third of its electricity from renewables and could face fines or legal action if it does not comply. Last year, 12.3 per cent of the country’s electricity came from renewables.
Ann Robinson, the director of consumer policy at uswitch.com, a price comparison website, said: “I don’t think consumers will understand this. Why should they have to pay through their bills for renewable projects built abroad? It is a nonsense. These EU targets have to be real targets; they should not be subject to these types of fixes.”

Even the energy industry was sceptical. Energy UK, the trade association, warned the Government in its submission: “Public perception may also need to be addressed if UK consumers were to fund renewable energy projects in other countries, thus creating employment and business opportunities outside the UK.”

The Government is already being criticised for not doing more to help British manufacturers to secure a bigger chunk of the huge offshore wind market. The UK has more installed capacity than the rest of the world combined, but only about 22 per cent of the components come from British suppliers. The UK content for wind farms in Spain and Portugal that could be bankrolled by British consumers under the plan would be negligible.

The European Federation of Energy Traders said there was a risk that an EU member state selling renewable credits in this way might miss its own renewable targets, undermining the whole point of the scheme to promote green energy.

Officials from the Department of Energy and Climate Change said that it was too early to estimate whether Britain was likely to miss its renewable targets and would need to buy credits under the scheme to make up the shortfall. But the department said that it needed “to stay open to the fullest possible range of options for meeting the 2020 target” and would keep the position under review. A spokesman added: “At present it is unclear whether it could be made to work and further clarity is unlikely in the near term.”

The Government wants to import green energy from thousands of new onshore and offshore wind farms in the Republic of Ireland to help it to meet its targets. Ministers claim that it would save British consumers, who will subsidise the wind farms, up to £7 billion because they are cheaper to build than North Sea deepwater projects. Talks are under way with Norway to lay what would be the world’s longest subsea power cable between the two countries, allowing Britain to import Norway’s vast reserves of renewable hydropower. National Grid is also carrying out a feasibility study to hook up to Iceland’s geothermal power resource.