The Commission needs political courage to promote a dynamic domestic market for renewables. Is Mr Juncker up to the task? asks Claude Turmes.
Claude Turmes is a Green MEP from Luxembourg.
The idea of an Energy Union was initially promoted by the future President of the European Council, Donald Tusk, with the willingness to decrease our worrying energy dependence to Russian gas. As necessary as the pursuit of this objective is, the Energy Union thought by Tusk and today designed by the Juncker Commission is choosing the wrong path and maintains Europe locked in the energy system of the past: fossil fuels and nuclear. This union (which I would like to call energy and climate union) once more constitutes a missed opportunity to initiate the European energy transition based on the principle of “efficiency first” and on the large-scale deployment of renewables.
I am convinced that renewable energy sources should be the backbone of the energy system of the future. Renewables represent hope. Hope in our capacities to fight climate change and to limit the increase of the temperature to 2°C (even 1.5°C) by the end of the century. Hope for the 1.3 billion of vulnerable people (almost the equivalent to the population of India) who are unable to access electricity despite an endless potential on the earth, notably in rural and remote areas in Africa. Hope for economic growth and competitiveness of SMEs and manufacturing industry regarding the potential revenues induced by innovation in the field of renewables. And hope for the workforce in light of the immense potential on job creation linked to renewables: in 2012, there were 1.2 million direct and indirect jobs in the renewable energy sector, a figure likely to increase up to 1.7 million jobs in 2030 in Europe and 6.9 million jobs worldwide.
From renewables to nuclear and gas: did Juncker change his mind?
When coming to office, President Juncker showed ambition on renewables. He pledged in favour of a European Union becoming “the world number one in renewable energies“. Only a few months later, these words sound terribly empty. On the contrary, the energy and climate union is likely to be turned by the Juncker Commission into a “gas and nuclear union”. Do we really want to build more gas pipelines and replace our dependence to Russia by dependence to Iran and Turkmenistan? In the year of the COP 21 conference in Paris, not a single action on renewable is outlined in the roadmap to the energy union while the Commission intends to publish this year a new Nuclear Illustrative Programme. What is the message there to the world? This is a real provocation.
Renewables: beyond the myth
To become a credible leader on renewables, we first need to deconstruct myths around the exploitation of renewable energy sources: no, renewables are not over-subsidised. And no, they are not expensive. Other energy sources, chiefly nuclear but also fossil fuels, benefitted from way more public support than renewables. Hence they are now relying on their vested interests caused by this large historical support. Still in 2015, some governments massively subsidise nuclear, such as the UK State aid to Hinkley Point worth € 20 bn. Cost reductions achieved by renewables over the last decade are extraordinary. For instance, solar photovoltaic module prices were divided by five in six years and a further halving of costs is anticipated. At the same time, nuclear new built in Olkiluoto and Flamanville are estimated between € 8 and 10 bn each. The recent financial performance of the so-called European leader, Areva, clearly illustrate that there is no business model for nuclear, not even to mention the EUR 700 billion legacy to future generations to handle dismantling costs and radioactive waste management.
I would like to move away from this negative spin around renewables. Renewables are not a problem but on the contrary represent a solution for a better energy future at European and global level. They are present in infinite proportions throughout the world and as such are a unique means to democratise and pacify access to energy.
A vivid domestic market for renewables
To become a world leader, we need first to do our homework. We need to work on a market design respectful of the high share of renewables, to ensure the full implementation of the legislation to meet our 2020 objectives, and to adopt national binding targets for 2030, preventing free-riders from passively getting the benefits from ambitious countries. The Commission should also favour a gradual convergence of national support schemes through regional cooperation, while maintaining the stability of the regulatory framework to keep investors’ confidence. Unfortunately, the directorate-general for competition rather launched a crusade to destroy national support schemes, undermining small-scale renewables development and citizens’ involvement as only large companies would be in a position to succeed in fully open auctions and tendering procedures. Such undemocratic change would kill self-consumption of self-produced energy and only serve the interests of big oligopolies. Retroactive changes such as the ones implemented in Spain notably are equally not acceptable. Power generation is not the only focus, and I reckon increasing electric mobility is a good way forward only if in parallel the share of renewables reaches a much larger share of the electricity mix. Beyond electricity, I encourage the Commission to think of a strategy for heating and cooling.
A stronger innovation and industrial policy
The Commission seems to make the right observation when indicating that “energy dependence should not be turned into technology dependence“. This is absolutely true and technology security is a must. Europe still has world industrial leaders in the wind and smart grids sectors. The wind sector recently reported great trade performance in a context of a fast growing world market: overall, every 12 days there is new wind capacity added in the world equivalent to an EPR nuclear power plant (1650 MW)! The challenge is to keep this leadership in the next phase of development of wind energy: off-shore, notably in the North Sea. In addition to wind, photovoltaic must be at the heart of an industrial policy for renewables. The EU thus needs to maintain its leadership on some segments and to reinstall a leadership confiscated by China in equipment production (cells and modules). The energy transition is not all about technologies, it is also about social innovation and system integration and cities are in the best situation to actually trigger this shift.
Support to exports and solutions agenda for international talks
2015 is the year of the Paris conference (COP 21) and the EU should use this opportunity to develop new markets for our renewables know-how in the urban environment. Making cities smarter throughout the world would ensure a sizeable market for European companies on green technologies exists. Not only urban areas are concerned: rural areas are also in desperate needs of electrification and small-scale photovoltaic systems coupled with batteries are part of the solution. This is very much relevant to supply African remote regions with the necessary power.
To conclude, the Commission needs political courage to promote a dynamic domestic market for renewables, coupled with proactive industrial, innovation and commercial support to open the door to the energy transition and restore the hope of many people throughout the world. This is the only way to become a “world number one” and to establish a strong, resilient and democratic energy and climate union.