On 22 January, a blockbuster EU climate and energy package is due to be unveiled, comprising new legislative proposals on subjects ranging from shale gas and tar sands to structural carbon market reform and industrial competitiveness.
Disagreement over an objective for renewable sources of energy (RES) seems to be one of the most controversial parts of the debate on the EU’s 2030 climate and energy package.
The European Commission and Parliament have already clashed over the 2030 framework.
Germany and seven other countries, including France and Italy, have called on the Commission to set robust renewable energy target for 2030, not mentioning whether it should be binding or not. Other states could probably accept a renewable energy target under certain conditions.
But there are also two countries explicitly against any such goal – the United Kingdom and the Czech Republic, not to mention Poland which opposes both an RES and CO2 reduction target.
According to the Czech government, the EU's climate and energy policies should be “based on a neutral approach towards all energy technologies”, including nuclear.
“RES represent just one of the possible ways towards low-carbon economy,” the government says in an official position document which mentions nuclear power as one of the other potential energy sources.
In the current climate package for 2020, there is a target of 20% share for renewables in the energy mix. But it was adopted in a different situation than the EU faces today, according to Edward Davey, the British secretary of state for energy and climate change.
“Most renewables technologies were immature; and we were at the peak of an economic boom,” Davey said during a Brussels speech in June. “Now, six years later, renewable technology is maturing and other technologies like carbon capture and storage and new nuclear are set to contribute to the low-carbon mix,” he added.
Both countries are planning to increase the share of nuclear power in their energy mix. The UK intends to build a two reactor nuclear power station at Hinkley Point, in the west of the country, offering a guaranteed power price for 35 years of the project, awarded to France’s EDF.
The Czech Republic wants to extend the lifespan of its Temelín nuclear power plant. It is also considering a scheme to ensure that the investment will pay back to the investor, the Czech energy group ČEZ.
The move is strongly criticised by green campaign groups in the Czech Republic. They argue the project will carry a heavy price tag for electricity users, recalling the hefty increase in power prices caused by the country’s flawed renewable energy support scheme. The so-called “solar fraud”, as it was called, resulted in a threat to Czech industries, which were punished with higher energy costs.
No support schemes
The very same argument is being used by opponents of binding renewable energy targets, who point out that renewable support schemes in form of feed-in-tariffs caused market distortions and higher electricity prices for European households and industries.
European enterprises have been paying more than twice the electricity price than their American counterparts and four times as much for gas following the US shale gas boom.
“The guaranteed buy-out price paid for by consumers has caused the electricity price to stop expressing real production costs; instead, it now rather expresses political objectives,” Ivo Hlaváč of ČEZ told EurActiv.cz.
“We are asking to stop or dramatically reduce subsidies for renewables in mature technologies, and to concentrate subsidies on R&D for the technologies of tomorrow,” said Gérard Mestrallet, the CEO of GDF Suez, at a press conference in Brussels in October.
On the other hand, Germany and the seven other proponents of renewables stress that such a goal would strengthen European competitiveness, resulting in more so-called ‘green jobs’ and economic growth.
Pushing for a single CO2 target
GDF Suez and ČEZ are part of an initiative by twelve European utilities, which are lobbing for changes to the EU’s climate and energy policy. They advocate for a single 2030 target focused on CO2 emissions reduction rather than focusing on a particular energy source.
Their main argument is that the current system – with a CO2 emissions reduction target, a renewable energy target and an energy efficiency target – is set up in such a way that the three goals clash with each other. For example the carbon market does not function well with the off-market support for renewables and support for energy efficiency, they claim.
In addition, focusing on renewable energy alone does not automatically result in lower CO2 emissions, they argue, citing the example of Germany, which aims for 80% renewables in 2050, but currently burns record amounts of coal.
Germany indeed burned the highest amount of coal in 20 years last year, according to media reports. The country, which is phasing out all of its nuclear reactors, has suffered from low CO2 prices, putting cleaner gas utilities at a disadvantage against dirtier and cheaper coal resources.