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23 November 2012
Today's announcement about the Energy Bill is welcomed in that it provides confirmation of the Government's commitment to meet the emission reduction and renewables targets to 2020.
The decision not to include a 2030 electricity decarbonisation target has attracted criticism from several sources. Forthcoming research from the UK Energy Research Centre, due for publication early next year, clearly indicates that if the UK is to meet its legally binding carbon emission reduction targets, set out in the Climate Change Act, then lack of clarity over subsequent targets is unlikely to get us there cost effectively.
The absence of a 2030 decarbonisation target in the Bill may not persuade investors of the need for new manufacturing assets in the UK, as there is a risk that these could be stranded after 2020 once the current targets have been met.
If low-carbon investors do not feel sufficiently secure in the UK actually to build their factories and their supply chains here, they may continue to source a large proportion of low-carbon equipment from overseas. The still large-scale deployment of low-generation technologies over the next eight years could mean a missed opportunity for a UK-based supply chain due to the lack of subsequent targets.