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Select Committee on European Legislation Tenth Report
RENEWABLE SOURCES OF ENERGY |
4.1 The Commission White
Paper An Energy Policy for the European Union specifically
included in its work programme the formulation of a strategy for
renewable energy sources. When we considered it on 21 February
1996[7] we said that we
would consider whether to recommend it for debate in the light
of the Government's submission to the Commission on whether a
specific title on energy should be introduced into the Treaty.
That proposal has not yet been taken forward in the Inter-Governmental
Conference[8].
4.2 The Green Paper under
consideration is the first of a two-step approach to developing
a strategy aimed at ensuring greater use of renewable sources
of energy by Member States. Responses are requested by 31 March
1997. It will be followed in mid-1997 by a White Paper which
will include an Action Plan.
4.3 The paper has been summarised
by the Parliamentary Under- Secretary of State at the Department
of Trade and Industry (Mr Page) in an Explanatory Memorandum dated
8 January:
"The
proposed strategy has three main elements:
(a) strengthening
Member States' co-operation on renewables;
(b) reinforcing
Community policies affecting renewables; and
(c) strengthening
assessment and monitoring of progress towards the 12% target.
"Proposed
areas for strengthening Member States' co-operation on renewables
include the encouragement of best practice, co-operation on energy
analysis and exchange of relevant experience. Consideration may
be given to the harmonisation of national initiatives.
"The
Green Paper recognises that Community policies in many areas have
implications for renewable energy and that an effective strategy
will have to rely on policy actions in many areas of Community
competence. The establishment of an Inter-Service Group on Promotion
of Renewables within the Commission is proposed and a number of
policy options are considered. These include:
- obliging
Member States to meet a certain percentage of their electricity
requirements from renewables, enforced on individual retail electricity
suppliers and with individual obligations tradable through a system
of 'renewable energy credits'.
- extension
of minimum excise duties on mineral oils to other energy sources,
with renewables exempt or at reduced rate;
- an
electricity tax exempting renewable energy sources;
- reduced
rates of excise duties on motor fuels of agricultural or forestry
origin;
- more
generous state aid provisions for renewables;
- a larger
ALTENER II[9] programme;
- reconsideration
of the breakdown of funding between nuclear and non-nuclear research;
- consideration
of the specific problems facing renewables in remote areas; and
- further
consideration of agriculture and forestry policy as they impinge
on renewables."
4.4 Whilst the policy options
set out by the Commission include those listed above, which are
rather more precise than most, it has addressed a much broader
range of options that this selection might imply. It emphasises
the importance of market penetration and sketches four scenarios
which lead it to conclude that, if significant progress is to
achieved, "consensus and co-operative international structures
with a strong role for public intervention" will be essential.
It highlights Best Practice policies as offering the most effective
means of ensuring rapid improvement, so that the figure of 12
per cent by 2010 becomes "an ambitious, but realistic objective".
It also states clearly that the fiscal aspects of the initiative
may require further reflection and it will develop these proposals
in the light of reactions to this Green Paper and to "developments
relating to the adoption of its proposals on taxation of energy
products". This is a reference to a new proposal which it
says that it is finalising, following an invitation from the 11
March 1996 ECOFIN Council to come forward with new proposals after
Member States had failed to reach agreement on a CO2
energy tax.
4.5 The Paper also emphasises
the importance of taking into account environmental degradation
caused by traditional sources of energy, particularly electricity,
which would be a lot more costly if such "external"
costs were "internalised", that is, incorporated in
the cost of production and supply.
4.6 Reference is made to
a TERES II study which indicated that "a doubling of the
current share of renewables by 2010 would have a net positive
employment effect of more than 500,000 jobs within the Community."
These would be created mainly in rural areas. This figure includes
construction, operation and maintenance work, but no serious attempt
is made anywhere in the Paper to quantify the cost-effectiveness
of renewables.
4.7 The European Parliament's
views are also quoted in the Paper. In paragraph 5.5 of our Ninth
Report[10] we noted that
the EP was considering whether to recommend allocating an additional
16.5 million ECU (£12 million) to the Fourth Framework Programme
for RTD (FP4), for renewable energy projects.
4.8 Press reports of reactions
to this Green Paper when it was presented to the Energy Council
in early December suggest that Member States are divided on whether
a specific figure should be set and whether it should be 12 per
cent. There is said to have been a large measure of consensus,
however, on the principle of promoting the development of renewable
energy.[11]
4.9 The Minister comments
on the Paper:
- diverse,
secure and sustainable energy supplies;
- reduction
in the emission of pollutants;
- encouragement
of internationally competitive industries.
"The
Green Paper presents many policy options and on most of these
the UK Government has not yet formed a view. Some proposals,
such as continuing R&D efforts to reduce costs and sharing
of best practice are consistent with UK Government policy. The
United Kingdom has a `non-fossil fuel obligation' which appears
consistent with that proposed, although tradable `permits' are
not part of the UK system. Other proposals, such as differential
energy taxes which could lead to market distortions and the adoption
of targets, may cause concern."
4.10 On compliance costs,
the Minister says that if some of the policy options canvassed
in the Green Paper were to be implemented there could be considerable
costs, but these are impossible to quantify at this stage.
4.11 An import dependency
of "50 per cent, possibly rising to 70 per cent, over the
next 25 years", for energy supplies certainly argues for
planning a strategy. Whether this should be undertaken at EU
level could be questioned; but the Paper quotes earlier references
to Council agreements that greater attention should be given to
renewable sources and the Commission being asked to produce proposals.
4.12 Whilst we applaud
this Paper as a brave attempt to address a complex subject, we
question whether it is desirable at this stage to try to set a
target figure for the percentage of energy to be derived from
one particular source or set of sources. The UK is currently
bottom of the list of Member States in its use of renewable energy.
The question arises whether it would be fair to apply pressure
on Member States to take measures to enable the target figure
to be met, irrespective of local conditions. Solar energy and
hydropower, for instance, emerge as technologically well developed,
whilst wave and tidal energy are still at the experimental stage.
4.13 We do not consider
that the complexities of the issues have been sufficiently acknowledged
in this paper. Only passing reference is made to the need for
life-cycle analysis to establish the environmental benefits to
be gained from the various renewable sources. The problems of
CO2 emissions from waste incineration, for instance,
are relegated to a footnote. Nor is a serious attempt made to
show the effects on the environment, to which attention has been
drawn in other EU policy documents, for instance on noise pollution
(wind farms) and greenhouse gases. It may be that the state of
the art on many of these technologies is still not sufficiently
advanced for prescriptive governmental intervention to be appropriate.
4.14 The Minister points
out that the UK has not yet formed a view on many of the policy
options in the Paper. He does not say whether or how he intends
to respond. We ask him to tell us his intentions and - we emphasise
- in good time before any UK Government response is given to the
Commission or in the Council. We also ask for a view on the quality
of the assessment in the Paper of the environmental benefits claimed,
the UK's preliminary view on a target figure in general and the
UK's likely ability to meet a figure of 12% by 2010, in particular.
In the light of his responses, we shall consider whether to recommend
a debate. In the meantime, we are not clearing the document.
7 (16940) COM(95) 682; see HC 51-x (1995-96), paragraph 5. Back 8 Although the Belgian proposal on energy policy is acknowledged on p 137 of the Dublin General Outline for a Draft Revision of the Treaties (CONF 2500/96). Back 9 ALTENER is the programme for the promotion of renewable energy sources in the Community. See (13854) 7757/92, HC 79-vii (1992-93), paragraph 4 (26 October 1992). Back 10 HC 36-ix (1996-97). Back 11 Agence Europe No 6869, 7 December 1996. Back |
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| © Parliamentary copyright 1997 | Prepared 31 January 1997 |