116. The key conclusions we would highlight from our inquiry are these:

• Britain has the greatest potential for renewable energy of any country in Europe.

• It currently produces less than 3 per cent of its energy from renewables—a tiny proportion which compares very unfavourably with almost all other European countries.

• The Government has set a number of targets for renewable production. We will certainly not meet the interim target of 5 per cent of electricity from renewables by 2003. On the basis of present trends, we are unlikely to achieve much more than half the 10 per cent target for 2010.

117. We therefore believe that there is an urgent need for the Government to show leadership and:

• address the difficulties in gaining planning applications;

• indicate tried and tested technologies which will deliver over the next decade; and

• address the conflicting priorities of market liberalisation and cheap electricity as against our Kyoto obligations.

118. We see the Government's primary task now as being to translate the implications of the PIU Report into a set of specific policy commitments and an energy action plan —with the emphasis on action. There has already been huge levels of consultation in this area. If the White Paper simply goes over the same ground as the PIU Review, it will be a failed opportunity to address the immediate problems which are jeopardising even the achievement of the 2010 targets.

119. The development of specific policy commitments will involve, for example, setting out in detail how the government intends to implement the PIU recommendations on the 20 per cent 2010 renewables target, on carbon pricing, and on energy efficiency—ie. what policy mechanisms, targets and deadlines it will use to achieve these aims. Such a process will also necessarily involve assessing the adequacy of current government policies to promote renewables—something which the PIU Review did not do, though it was an objective of the original study.[155]

120. There are, however, a number of other actions which the Government need to carry out as a matter of urgency, before the White Paper is issued.

• The Government must ensure that Ofgem's review of NETA in its first full year place primary importance on environmental impacts, including the impacts on renewable generators and on carbon emissions. As Ofgem itself appears to have no responsibility for monitoring environmental impacts, the DTI and DEFRA will therefore presumably need to provide an analysis of this. This analysis should be published.

• The DTI should review options for incentivising the development of renewables under NETA, so that the playing field—so far from being tilted against renewables as at present—should favour them. There are a wide range of possible measures which could be adopted.

• The DTI should prepare and implement legislation to amend the statutory duties of Ofgem in order to incorporate the promotion of sustainable development as a primary duty. It should also strengthen the guidance to Ofgem on social and environmental matters to reflect such a change, and should issue this guidance as soon as possible. The guidance should also require Ofgem to carry out thorough environmental appraisals of all proposals and to monitor the environmental impacts of its policies.

• The ODPM should revise planning guidance for renewables as a matter of urgency and incorporate a presumption in favour of renewables. It should also, in conjunction with the DTI, set renewable energy targets for Government Offices and consider ways of providing financial incentives for regional and local government to achieve them.

• The DTI should work much more closely with the devolved institutions in Scotland, Wales, and Northern Ireland, to share past experience, to ensure that the best legislative arrangements are in place, and to co-ordinate future action.

121. It is also unfortunate that the Government has chosen to ignore the PIU recommendation that, as a matter of urgency, a cross­departmental Sustainable Energy Unit should be established and become operational by September 2002. This was seen as of great importance in drawing together future energy policy. Yet the Government's consultation document fails to highlight this recommendation, and in their evidence to us the DTI gave no indication that they were intending to fulfil it. The present distribution of responsibilities between departments lacks coherence, as evidenced by the fact that there are now two sustainable energy policy units—one in the DTI and one in DEFRA.[156] In view of the widespread agreement that exists in this area, we would actually go further than the PIU. In our view, a cross­cutting unit for sustainable energy policy—as recommended by the PIU—is unlikely to be sufficient, and we recommend that the Government should set up a Sustainable Energy Policy Agency. The agency should be responsible not only for sustainable energy policy, but for managing and coordinating capital grant and research and development funding in view of the present fragmented responsibilities in this area.

Looking outward: international collaboration

122. Energy policy is increasingly becoming an issue which requires international collaboration—whether for reasons of self-interest such as security of supply or economic competitiveness, or because of the overriding need to reduce world poverty and the impact of climate change. Earlier this year, we reported on UK preparations for the World Summit on Sustainable Development (WSSD) to be held in Johannesburg in August.[157] In this context, we note the importance attached in the WSSD draft implementation plan to: "improving access to reliable, affordable, economically viable, socially acceptable and environmentally sound energy services and resources ... through various means such as enhanced rural electrification and decentralized energy systems, increased use of renewables ... and enhanced energy efficiency, by intensifying regional and international cooperation in support of national efforts".[158]

123. We welcome this emphasis and hope that the Summit will result in many specific projects where the UK, in partnership with others, may promote renewable energy developments where they are most needed. In many parts of the world, for example, solar PV is already the cheapest way to provide electricity to remote villages where there is no network infrastructure, and it is likely to become even more competitive by 2020. But we are mindful of the dismissive attitude which the Secretary of State for International Development displayed when the issue of renewable energy arose in our discussions with her.[159] The UK is already some way behind other countries such as Denmark, Germany and Japan. If it is to maximise the benefits such opportunities may present, the UK Government will need to take a rather more positive attitude than the Secretary of State and adopt in the words of the PIU review a 'leading role' in the international development of energy policies and projects.

156   Cf PIU Energy Review, para 8.13. Back

157   Third Report from the Environmental Audit Committee, session 2001-02, UK Preparations for the World Summit on Sustainable Development, HC 616. Back

158   Draft plan of implementation for the World Summit on Sustainable Development, advance unedited text, 12 June 2002, para 9. Back

159   Third Report from the Environmental Audit Committee, Session 2001-02, UK Preparations for the World Summit on Sustainable Development, HC 616, QQ 156-167. Back