The likely impact of reforming the renewables obligation on renewables targets

Abstract

Purpose – The United Kingdom (UK) Government is required to meet various renewable energy targets set by the European Union. The UK has had renewables support schemes for many years. It has become clear that the old schemes are insufficient to lead to enough new capacity to meet the target. The government has accordingly reformed the renewables obligation (RO). The purpose of this paper is to analyse whether the reformed RO will meet the targets set for 2015 and 2020. Design/methodology/approach – The paper undertakes a review of the modelling literature and performs a critical, deductive analysis of the RO to answer its research issue. Findings – The paper finds that it is too late to make any difference to the 2010 target, but that the reforms might lead to the 2015 target being met, and finds that whilst it is clear that the reformed RO will lead to more capacity being built than otherwise would have been the case, it is difficult to establish that the 2020 target will be met. Originality/value – This paper shows that there may be further reform of the already-reformed RO, and that more time is needed to see the impacts of the recent regulatory responses to the external failures. This understanding will be useful in developing new policies to promote renewable energies in the UK.