The European Commission is to ditch legally-binding renewable energy targets after 2020 in a major U-turn and admission that the policy has failed industry and consumers by driving up electricity bills.
A Brussels paper on the European Union’s “2030 framework for climate and energy” will instead propose binding targets to reduce carbon emissions without imposing requirements on how the reductions are made.
The climbdown on setting mandatory national targets, enforced in the EU courts, will be welcomed by Britain, which argued to allow countries to keep the choice of how best to reduce CO2 emissions as a matter of national sovereignty.
“It is good to see that the EU has learned the lessons of the current targets that imposed top-down renewable energy targets,” said a Government source.
“The UK’s priority has been to avoid measures that restrict choice in the energy mix for policies that allow countries to pick the most cost-effective route to cut carbon emissions.”
On Tuesday night, the commission remained divided between “those arguing for ambition” with a 40pc target for the reduction of greenhouse gas emissions by 2030, and others “arguing for prudence” by setting a lower goal of 35pc.
Commission officials confirmed that the proposal would come “without binding national targets to avoid over-subsidies” of expensive renewable energies such as wind farms and solar panels.
Environmentalists have accused the commission of “dancing to the tune of the big polluters and energy guzzling firms” by dropping the target.
“The EU must set ambitious targets in line with the latest science for tackling climate change, as well as mandatory goals for renewable power,” said Asad Rehman, a spokesman for Friends of the Earth.
A 2009 EU directive set the objective of ensuring that 20pc of the energy used by 2020 should come from renewable sources.
Quotas sharing out the obligations across the EU meant that Britain was set the binding target of ensuring that 15pc of its energy demand must be met from renewable sources before the end of the decade.
The binding target for renewable energy has probably had more impact on how power is generated and the bills paid by households in Britain than any other single piece of EU legislation.
The cost of subsidising new renewable energy technologies, such as onshore and offshore wind farms, has been blamed for soaring energy costs for industry and consumers across the EU.
One recent study estimated that every British household faced an average of a £400 increase in energy bills over the next six years to pay for subsidies under controversial Government plans to hit the EU’s renewable targets.
Douglas Carswell, the Conservative MP for Clacton, praised the commission’s recognition that setting targets had failed but criticised the EU for reaching the conclusion “a decade too late”.
“This illustrates a more fundamental problem with decisions taken by remote EU officials who take years to realise how wrong they were,” he said.
In a report to be published on Wednesday, alongside the climate change strategy, the commission admits that European energy prices are much higher than in the US, India and Russia, the EU’s main economic competitors.
The report finds that retail power prices have risen 65pc between 2004 and 2011, more than double the inflation rate of 18pc during the same period.
One draft version of the report, seen by The Telegraph, forecast that prices would continue to steeply rise by 20pc for electricity and 30pc for gas until 2030 with the cost of energy, only falling back to the current levels by 2050.
“It is a real concern that Europe is becoming progressively out of step with the countries with which it trades. This makes our industries less competitive and the costs for households greater,” said Energy UK.
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