EU: Green energy needs milestones to grow

  

Europe must agree 2030 milestones as soon as possible to spur investment in renewable energy, or green power growth will fizzle once firm policy runs out in 2020, the European Commission said on Wednesday (6 June) in its latest strategy statement.

Many in the renewable energy sector agree there is a need for strong guidance, but want binding targets, rather than vague aims. At the other extreme, some of the 27 member states are strongly opposed to legal goals for renewables.

The EU currently has a firm target to increase the share of renewable energy in the mix to 20% on 1990 levels by 2020, which analysts and industry say it should meet and could exceed.

Other goals include a 20% cut on Europe’s 1990 carbon emissions level, and a non-binding 20% improvement on the continent’s 2005 energy efficiency standard.

But the renewables communication only lays out scenarios for moving on from the 20% renewables binding goal.

“We should continue to develop renewable energy and promote innovative solutions. We have to do it in a cost-efficient way,” Energy Commissioner Guenther Oettinger said in a statement.

“This means producing wind and solar power where it makes economic sense and trading it within Europe, as we do for other products and services.”

The Commission says that better coordination is needed across member states, so that renewables, such as solar and wind, can be generated wherever they are cheapest.

It also says ‘support schemes’ should be consistent across the bloc and reiterates its backing for an integrated market with connections to northern Africa, where it sees the potential for large-scale solar generation to supply Europe.

Beyond 2020

Looking beyond 2020, Oettinger has said he wants agreement on a new policy regime before the end of the current Commission, whose mandate expires in 2014.

“Without a suitable framework (after 2020) renewable energy growth will slump,” the Commission said in a statement.

Options include new goals for emissions cuts, but no goals for renewable energy, which would leave the Emissions Trading Scheme (ETS) as the main instrument to cut carbon emissions and encourage renewable energy.

Britain, for instance, wants an emphasis on the carbon goal and argues that a renewable goal might disadvantage other low carbon energy generation, such as nuclear or even gas.

Many in the renewable industry say the collapse of the ETS to less than €7, far below the €20-€50 analysts believe necessary to spur investment, demonstrates the value of targets.

A second option outlined in the Commission document would be to replace the three 2020 targets with three 2030 targets. This could take the form of national or EU-wide targets.

Binding targets

The European Renewable Energy Council (EREC), the umbrella group for Europe’s renewable energy industry, has proposed a binding target to ensure renewables make up 45% of the energy mix by 2030.

“This is not something that's really impossible,” said Arthouros Zervos, EREC president and chief executive of Greece's biggest electricity producer, PPC.

EREC also wants the EU’s CO2 cuts target for 2020 raised from 20% to 30%.

Zervos called for a stable policy on subsidies for renewables, arguing that fossil fuel subsidies were much higher than those for green energy, and “negative, disruptive changes” and retroactive changes were a particular problem.

EWEA says that strong growth in renewables to 2030 could generate more than 3 million jobs.

Positions: 

"European Ministers must turn this message into action and back a renewable energy target for 2030, as supported by the Strategy's Impact Assessment", said Stephane Bourgeois, Head of Regulatory Affairs of the European Wind Energy Association (EWEA) in Brussels. "A legally binding renewable energy target for 2030 is crucial if we want to foster Europe's leadership in wind energy, and in particular offshore wind".

Eurelectric, the association representing Europe’s electricity industry, reacted to the communication with a call for renewables to be put on an equal footing with other technologies, consistent policies to be applied under the EU ETS, a strengthening of the scope of renewables development and a clear distinction to be made between pre and post-2020 planning.

“The growth of renewables is a welcome development,” said Eurelectric’s secretary-general Hans ten Berge, “it contributes to diversification, security of supply, and the shift towards a greener, low-carbon economy. With technologies like onshore wind and solar PV reaching maturity, Europe must integrate renewable energy into the market. In a difficult economic environment, European citizens and businesses deserve cost-efficient solutions. To this end, we must build on the experiences from the pre-2020 period when designing the post-2020 framework: this means a more European approach, more market, more consistency and a level playing field for mature RES and other generation technologies.”

But the Coalition of progressive European energy companies – which represents SSE, Eneco, DONG Energy, EWE, Acciona, Sorgenia, PPC, EDP Renewables and Stadtwerke – renewed their call for a binding EU 2030 renewables target, which they said “is needed to bridge the policy gap between 2020 and 2050 and to allow the renewables industry to mature and to reach cost competitiveness. In the absence of a binding 2030 target, renewable growth is put at great risk, which will undermine the decarbonisation scenarios of the EU Energy Roadmap 2050, as well as the overarching EU 2050 carbon reduction target of 80-95%.” 

To give investors a better long-term perspective, the Renewable Directive’s Energy Roadmap for the post-2020 period should be brought forward from 2018 to 2014, they said. “It should be recognised that the binding 2020 renewables target has worked – in the absence of a robust carbon price – to create new European industries, growth and jobs, whilst diversifying energy supply and reducing European energy import dependency. Now the time has come to focus on the 2030 policy framework, of which a binding renewables target must be the cornerstone.”

Marc Oliver Herman, Oxfam’s EU biofuels expert, welcomed the “ambitious” EU renewable energy policy announced but found it “shocking that the Commission’s blueprint ignores that the current EU biofuels policy is driving up global food prices and helping push people in poor countries off their land.”

“When they meet next week,” he continued, “EU Ministers have the chance to tell the Commission that a renewable future for Europe must not come at the expense of millions of families in developing countries struggling to feed their children. Ministers must urge Energy Commissioner Oettinger to reform the flawed 2020 biofuels policy before moving on to 2030. This means scrapping the binding 10% 2020 target for renewable energy in transport, as this will be largely met through biofuels produced from food crops.”

The position found an echo with the World Wildlife Fund. "A renewable energy target for 2030 is an essential element in the post-2020 strategy,” said Imke Lübbeke, Senior Renewable Energy Policy Officer at WWF European Policy Office. “It will keep Europe at the forefront of innovation, and will aid economic recovery by boosting jobs. An increasing role for renewable energy will also help to cut the hundreds of billions of euros (€315bn) Europe pays every year for imported coal, oil and gas."

On the same theme, Daniel Fraile, the Climate Action Network's Europe Senior Energy Policy Officer said that "a stable policy framework, if well designed, will help realize investments and support continuous growth of the European renewables industry, which will in turn create jobs.” Before making renewables compete in a market specifically designed for inflexible conventional generation, fossil fuel subsidies had to be removed and energy markets reformed, he expounded. "It is important to understand that conventional energy sources have enjoyed huge financial support for decades, which distorts the market and does not allow renewables to compete on a level playing field," he said.

The bioenergy company, Novozymes, issued a statement welcoming the plan to propose legislation on the post-2020 regime in 2014. “Renewed ambitious mandatory targets for renewable energy should be part of the new framework,” it said. “Combining targets for GHG emissions reduction with targets for renewables and energy efficiency hold true post-2020. They will guarantee we achieve long term GHG emissions reduction and energy security objectives in a cost effective manner, using most sustainable renewable energy technologies. This is particularly relevant for the transport sector where energy demand is growing and GHG emissions are increasing.

"More trading of renewable electricity within the EU is exactly what we need,” said the Liberal Democrat MEP Graham Watson. “We all need to be importing and exporting our renewables. The sun is always shining and wind always blowing somewhere in Europe, and a single market for renewables will make the green energy switch work"

"But in order to do that we need the capacity for long-distance electricity transmission,” he went on, “and by and large our power lines currently stop at national borders. The next EU budget is due to put €9bn towards cross-border energy links - but that money is being squeezed."

Timeline: 
  • 2014: EU's energy commissioner has called for a new climate policy regime to be agreed before the expiry of the current Commission's mandate in 2014
  • 2020: Deadline for the EU's three 20% targets to be met - a 20% cut in CO2 emissions and increase in the share of renewables in the energy mix - both measured against 1990 levels - and for a 20% improvement in the EU's energy efficiency performance, compared to 2005.
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