Introduction

Renewable energy is key to our low-carbon energy future. We need to radically reduce greenhouse gas emissions, as well as diversify our energy sources. As part of this move to a low-carbon economy, we need a step change in renewable energy use in heat, electricity and transport over the next 12 years.

Last spring the UK agreed with other Member States to an EU-wide target of 20% renewable energy by 2020 – including a binding 10% target for the transport sector. The European Commission has proposed that the UK share of this target would be to achieve 15% of the UK's energy from renewables by 2020 which is equivalent to almost a ten-fold increase in renewable energy consumption from current levels. While such an increase is ambitious, and will be challenging, we are fully committed to meeting our share of the target.

This consultation looks at ways the UK can meet its proposed share of the EU 2020 target for renewable energy in the most cost-effective way. It asks for your views on possible measures and potential technologies that could help the UK accomplish a revolution in how we use and generate energy.

Once we have heard your views, we will decide on the final package of measures in and publish the UK Renewable Energy Strategy next spring, once the final shares of the EU target have been agreed by member states.

Consultation Summary:

This consultation considers a number of measures that have the potential to achieve 15% of our energy consumption from renewables by 2020. The measures aim to stimulate the market to deliver the necessary investment in the most cost effective way by providing a clear long term framework and removing the obstacles to increasing renewable generation - while ensuring that sustainability concerns are minimised.

The chapters contain our initial views and proposals on:

• additional financial incentives for electricity – extending and raising the level of the RO for large scale electricity and using either feed in tariffs or enhanced RO for microgeneration;
• new financial incentives for heat – to encourage rapid growth in relatively low cost renewable energy technologies in homes and industry;
• the contribution from the transport sector, including the contribution from biofuels given sustainability concerns and the role of electric cars;
• removing grid barriers to renewables – new incentives for National Grid to build grid infrastructure and reforming access arrangements;
• reducing planning consent barriers – providing strong guidance an training to local decision makers through a National Policy Statement, creating an expert body to advise planners and setting regional renewable targets that shape local economic strategies;
• using more energy from waste – discouraging biomass from being landfilled that can be used to generate energy and encouraging the use of food waste to generate energy;
• stimulating innovation and the supply chain – by setting a clear, long-term framework and considering how efforts to meet the 2020 target will impact on incentives to develop emerging renewable technologies.

The level of the target will require all sectors and technologies to deliver at their maximum growth rates over the next 12 years and we expect the market for renewable energy technologies and investments will grow substantially. Up to 160,000 jobs could be created to deliver the necessary investment in the UK. A similar picture will emerge in all Member States as each invests to meet their share of the overall EU 2020 target. UK business can be at the forefront and seize these opportunities.

The measures outlined in the chapters will not be without cost, though these will not be felt for a number of years. But we will seek to deliver the most cost effective way of making these investments. At the same time, in the light of the increased pressure on energy prices from climate and energy policies, including the Renewable Energy Strategy, the Government will need to bring forward with new measures to save energy and address fuel poverty. We will consult on new measures this autumn to tackle the need for even more efficient use of energy in all areas of our lives.