Utility Week

UTILITY Week 31st October 2014

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16 | 31sT OcTObEr - 6Th NOvEmbEr 2014 | UTILITY WEEK Policy & Regulation Reaction GOOD package BAD package "A historic moment. Europe has sent a message to the world" Ed Davey, energy secretary Poland given free EU ETS allowances to help it migrate from coal Energy efficiency sector says it would be bet- ter off invest- ing elsewhere 28 Number of countries signed up Analysis EU agrees climate change targets Bold emissions reductions goals have been set, but without country-specific targets. Mathew Beech reports. T he European Union has finally set out its stall on how it will tackle climate change. Aer hours of tense negotiations in Brussels, the headline 40 per cent target was reached, and every member of the 28 member states will be able to walk away feeling they have achieved some sort of victory. By the end of the next decade, greenhouse gas emissions should be down 40 per cent on 1990 levels, while the EU will be generating 27 per cent of its electricity from renewable sources. Energy efficiency should have improved by the same amount. This, in theory, should set up Europe well for the United Nations discussions in Paris next year, where a global agreement on curbing climate change will be the focal topic. However, despite claims from energy secretary Ed Davey that this was a "historic moment", and from EU commissioner Connie Hedegaard that this sent a "strong signal" about the EU's attitude to climate change, the agreement was full of concessions, compro- mise and vagueness to accommodate the disparate views within the union, while still allowing the all-important 40 per cent headline to be proclaimed. The greenhouse gas emissions reduction target will be binding, but the exact contributions of member states have yet to be agreed. The 27 per cent renewables target applies only at an EU level, so will have a relatively limited impact on the generation mix on a country- by-country basis. The energy efficiency target is an EU-wide but non-binding agree- ment, which may be raised to 30 per cent by a review in 2020. The biggest concession was made to Poland, which was granted hundreds of millions of euros in free carbon allowances, 60 per cent of the total free allocations up until 2019, to allow it to continue using – and to modernise – its extensive coal-fired generation fleet. Polish prime minister Ewa Kopacz said Poland had won all the concessions it wanted and that there would be "no new burdens" on her nation. Martin Schoenberg, head of policy at Climate Change Capital, also criticised the EU-wide accountability for renewable generation, calling this a "major problem" and saying some nations would not be willing "to pull their weight" to ensure the EU hit this goal. Despite this, and the fact that the EU Emissions Trading System (EU ETS) is still awaiting radical reform, the general view on the deal is positive. Mark Kenber, chief executive of The Climate Group, says: "It gets the ball rolling and paves the way for others to follow suit in the coming months." The Institute of Environmental Management and Assessment (IEMA) adds that the deal is "the minimum baseline" required ahead of the UN negotiations next year, while Katja Hall, CBI deputy director-general, says the 2030 package "lays a firm foundation". While it may not be quite as ambitious as Davey had hoped for – he said before the summit that it should be a 50 per cent emissions reduction – it demonstrates that it is possible to get a multitude of nations to sign up to a low-carbon agenda. moving targets The EU has set some high targets, both aspirational and binding 40% cut by 2030 on 1990 levels of greenhouse gas emissions 27% EU-wide renewables target 27% energy efficiency target (aspirational) 2% reserve of EU ETs allowances to be set aside 80% greenhouse gas emissions reduction target goal for 2050 the big numbers "Forty per cent must be seen as a floor which opens the door to increased ambition… The two other targets are frankly disappointing" mark Kenber, chief executive, The climate group "The package looks ambitious compared with commitments made by other economies" Jonathan grant, director, sustainability and climate change, Pwc

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