European member states have proposed amendments to the EU's renewable energy directive that critics claim will water down the legislation and potentially damage investor confidence in the sector.
At a meeting last night, European governments reportedly reached agreement on an amendment to the European Parliament's proposed renewable energy package that would allow a review by 2014 of progress towards meeting the target of delivering 20 per cent of energy from renewable sources by 2020.
The proposal will now be negotiated on by the European Council of member states, the European Commission and the European Parliament ahead of the planned finalisation of the EU's climate change later this year. But renewable energy campaigners warned that if adopted, it could damage investor confidence.
"A review of the directive in 2014 would be only six years away," warned Friends of the Earth energy campaigner Mary Roberts. "So if investors looking at projects that deliver a pay back over 10 or 20 years are concerned the regulatory framework could change in six years time it is bound to introduce extra risk to their projects - it sends out a very unhelpful message."
A spokeswoman for the UK Renewable Energy Association, agreed investor confidence could be compromised. "If you have a review planned, it introduces uncertainty for investors and damages the potential for the market to grow," she said.
A spokeswoman for the Department of Energy and Climate Change (DECC) downplayed fears the proposed review would damage confidence in the renewable energy sector. She claimed that a number of governments, including the UK, had insisted that any review would not be free to recommend changes to the 20 per cent target, and would instead focus on whether or not investment levels needed to be increased to ensure the target is met.
However, Roberts said that Friends of the Earth feared that a review would allow the EU to relax rules governing the extent to which the targets can be met by funding renewable energy projects outside the bloc's borders.
Some governments, including the UK, have been lobbying for investment in renewable energy projects in developing economies to count to wards the renewable targets - a loophole green groups have argued would limit the need to for renewables investment within the EU.
The DECC spokeswoman said that negotiations were on-going on the extent to which projects outside the EU could be used to count towards the targets.
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