Britain is still well short of its EU renewables target

UK considering loophole to escape EU renewables fine

The UK is considering using a loophole to escape fines for missing the 2020 European Union (EU) renewable energy targets.

Britain has an EU target to meet 15 per cent of its energy needs from renewable sources by 2020, but with just five years to go it remains well short at just over 5 per cent and recent subsidy cuts for green power are only likely to slow progress.

However, under the EU rules Britain could use a loophole called statistical transfer, which would see it pay other EU countries that are overshooting their targets, to make up the difference for them.

"We need to stay open to the fullest possible range of options for meeting the 2020 target, including the use of statistical transfer," a spokeswoman for the Department of Energy and Climate Change said.

Contributions towards the UK's target from energy used in the transport and heat sectors are well below what is needed, placing more of a burden on the electricity sector to make up the shortfall.

However, cost-cutting changes to subsides for biomass, solar and onshore wind projects announced in June could see around 250 projects not being built, according to the new Energy and Climate Change secretary Amber Rudd.

Analysis from consultants PWC showed Britain would need to generate more than 50 per cent of its electricity from renewable sources by 2020 to meet the goal, up from around 20 per cent in 2014.

"Technically the target could still be met if more renewable electricity capacity comes online, but for that to happen the funding cap would need to be increased while the recent measures have all been to cap overspend," said Ronan O'Regan, director of renewables at PWC.

While it is unclear how much Britain would be fined, the 2020 renewable target is binding and EU's highest courts in Luxembourg have the right to order payment of a fine for every day a country is found to be in breach of EU law.

There could also be competition for the statistical transfers as the latest data from the European Commission shows several countries, including the Netherlands and France, are also at risk of missing their targets.

Richard Slark, Director at Poyry Management Consulting said it could end up being cheaper for Britain to not comply and face fines.

"The fines for non-compliance are understood to be relatively small and they may not be levied for years, given the EU's drawn out enforcement processes," he said.

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