The post the other day about Local Authorities and renewable energy targets got me thinking about the EU renewable energy target (15% of energy to come from renewable sources by 2020) and how that compares with a mandated onsite renewable energy target à la Merton Rule.

The difficulty with mandating a renewable energy target is that it is not the real objective of the policy. The real aim is to have enough low carbon energy to provide sufficient goods and services. That aim would be just as well met by improving energy efficiency, at least in the short to medium term.

The alternative is to have carbon reduction targets. And we do also have EU targets expressed in this way. The analogy in UK building regulations is between the SAP methodology and the Merton Rule. My thoughts on the problems with that are in the Merton Rule report card.

In the same way as with a Merton Rule, the EU mandated renewable energy target drives down the value of energy efficiency projects. It is true that energy efficiency does help in reaching the renewables target, by reducing the overall amount of energy consumed (ignoring the rebound effect for the moment).

However, for every tonne of carbon you save, you only move 0.15 tCO2 towards the renewables target. That means the value of energy efficiency to the government is only up to 15% of the value of renewables.

Of course this is simplistic as there are all sorts of other policy drivers and commitments (fuel poverty, energy security, etc). The basic point remains. A mandated level of renewable energy in conjunction with a mandated carbon reduction target means that the most efficient way of reducing carbon is not the most cost-effective way of meeting the target.

Could this be why the last government was so slow to encourage real energy efficiency measures on the existing stock?