What lies behind the Government’s renewed interest in the Severn barrage?

A lasting monument to the EU's renewables targets

It has been reported that David Cameron’s attention has fixed on the old idea of building a Severn barrage to provide renewable energy. Much of the reporting puts this in the context of the politics of infrastructure spending; however there may be another reason that we have previously highlighted for his renewed interest. That being that he has little choice if his own desire to comply with the UK’s EU target of producing 15% of its energy form renewable sources by 2020 is to be met.

Background
The EU’s renewable target, (agreed by Tony Blair in 2007) requires the UK to shift from just 1.3% of total energy from renewables in 2005, the baseline year under the EU Directive, to 15% by 2020 – the largest proposed increase of any member state (see graph below). The Government predicts that this will come at a net cost of £66bn to the UK over 20 years. This is a huge cost given that the UK already faces a major energy generation challenge – a quarter of existing power plants in the UK are due to close by 2020 – and that Britain should be in the enviable position of being one of the EU’s top energy producers, largely due to North Sea oil and gas, which makes it far less reliant on traditional energy imports than other member states.

The consensus is that the 15% target is likely to require the UK to produce 30-35% of its electricity from renewables by 2020, because it is far harder to source energy for transport or heating from renewables. The UK currently has one of the lowest proportions of electricity generated by renewables in the EU, illustrating the scale of the challenge.

So why do EU rules make the barrage almost a certainty?Article 5(2) of the original proposed renewables directive (requested by Britain) made it clear that the UK would have to build the controversial Severn Barrage in order to meet its EU renewables target.

The proposed article stated that:

“Member States may apply to the Commission for account to be taken, for the purposes of paragraph 1, of the construction of renewable energy plants with very long lead-times on their territory under the following conditions:

(a) construction of the renewable energy plant must have started by 2016;

(b) the renewable energy plant must have a production capacity equal to or in excess of 5000 MW;

(c) it must not be possible for the plant to become operational by 2020;

(d) it must be possible for the plant to become operational by 2022."

Given the extremely specific description (something five times more powerful than a large nuclear power plant which will be built between 2020 and 2022), this can only realistically have refered to the barrage.

Expensive stuff given this was possibly all based on a "mistake"
In 2008, the UK Government's former chief scientific adviser, Sir David King, suggested that Prime Minister Tony Blair and the other EU leaders did not understand what they were committing themselves to when agreeing the target:

"I think there was some degree of confusion at the heads of states meeting dealing with this. If they had said 20% renewables on the electricity grids across the European Union by 2020, we would have had a realistic target but by saying 20% of all energy, I actually wonder whether that wasn't a mistake."

Tony Blair thought he had signed up to  increase this: 15% of electricity from renewables

But he actually committed the UK to this: 15% renewable share of all energy by 2020

Leaving this: A UK renewables gap even the barrage might not fill

Source: Open Europe: The EU Climate Action and Renewable Energy Package: Are we about to be locked into the wrong policy? (2008)

But the whole idea was rather muddled in any event

Focusing on renewable energy from a climate change point of view sounds good but the 2020 rush to renewables is illogical as it ignores and actually diverts resources away from the easier and cheaper CO2 reduction wins to be gained from all other technologies (clean gas, clean coal, CCS, reducing consumption or even renewables that are at an earlier stage of technological development).

Several aspects of the EU’s climate change policy (forgetting the UK’s own self-imposed targets) are also self-defeating, including the competing and complex nature of the individual policies: the Emissions Trading System (ETS), which is essentially meant to be a market-based carbon pricing framework, and the aforementioned renewables target, which is essentially designed to change the energy mix of member states, often through subsidy.

In practice, forcing electricity generators towards prescribed renewable technologies, such as wind, through the 2020 target and government subsidy lowers the carbon price under the ETS because firms are being subsidised to meet the cap. This undermines the ETS’ carbon pricing function, which is meant to be the driver of investment in the cheapest low carbon alternatives.

A similar conflict can be seen between the EU’s initial push for a biofuels target, and the subsequent move to sustainability criteria, and additional production costs, due to the previously unforeseen impact certain biofuel production had on food prices and land use. All told, this policy mix is unlikely to be the best value for money option in reducing CO2 emissions.