EU energy policy is missing its biggest opportunity: the current narrative is all about using fossil fuels, in fact, renewable heating and cooling technology already exists, argues Nigel Cotton.
Nigel Cotton is Director of Technology and Innovation at the European Copper Institute.
On 26th and 27th February, the European Commission is hosting a high-level conference in the Charlemagne entitled “Heating and Cooling in the European Energy Transition”. Heating and cooling matters: half of every unit of energy consumed in Europe goes on heating and cooling for our homes, our factories and our buildings.
However, I am concerned that EU policy on heating and cooling is heading in the wrong direction. In mid-January, Miguel Arias Cañete, the Climate Action & Energy Commissioner, supporting President Juncker’s priority on Europe’s Energy Union, told the International Renewable Energy Agency that he was “committed to make Europe the world’s number one in renewables”. But the 6th February conference on the Energy Union in Riga failed to talk about renewable heating and cooling solutions to any extent, and leaks of the Energy Union paper suggest the emphasis will just be on using fossil fuels as efficiently as possible, which will only delay the deployment of renewable technology that is proven and available.
The phrase “energy transition” seems to have become a byword for “business as usual”. The current conservative approach on fossil fuel, rather than enforcing the switch to renewable technology, is putting off valuable investment. Despite that, even if we reduce our off-take of fossil fuel from external sources by 20%, we will still be 100% dependent on those sources. Why are we not building into our policies a switch to domestic sources as required under Regulation (EU) No 994/2010 where Member States are required to establish a strategy both to promote energy efficiency and to switch from gas to renewable energy sources?
Renewable heating and cooling technology could save Europe €100 to €200 billion a year in imported fuel costs, create local jobs, reduce our dependency on non-European suppliers and help in the fight against climate change. Instead, this opportunity is being wasted, allowing important liquidity to drain out of our economic system when we could be using it to create wealth – and local jobs – here in Europe.
We need to plan our energy future in a manner which builds in renewable heating and cooling solutions, which cuts the amounts of money and energy we are wasting, drives industrial leadership and reduces our dependence on fossil fuels. We already have the three essential elements for that plan: energy conservation, energy efficiency and renewable heating and cooling.
Energy conservation means buildings that think for themselves in an energy-conscious manner – while saving ten to fifteen per cent of our energy bills. Energy efficiency means, for example, replacing boilers which are outdated with more efficient and/or renewable sourced ones. That sets us on the path to near- zero energy buildings and provides a gain of twenty per cent in fuel use.
Renewable heating and cooling means fitting a solar thermal panel, installing a biomass boiler, placing a heat pump or choosing a geothermal plant. It breaks our addiction to fossil fuels, it uses technology which delivers the same level of comfort and service and it saves thirty per cent or more of our energy bills
There is no hierarchy among energy conservation, energy efficiency and renewable energy- just opportunity. But we should be putting them first, not last in our choice of energy mix. An Energy Union based solely on unambitious energy efficiency and existing fuels from different channels does a disservice to entrepreneurs in the European energy sector.
Europe will prosper from a greater reliance on indigenous and sustainable production. We can increase our competitiveness and best serve our society through the intelligent application of new technology. We can create a wide range of jobs demanding a wide range of skill-sets: raw material cultivation/extraction, manufacturing, engineering, distribution and installation. Alongside those we have world-class research and development in both academia and industry sectors like equipment manufacturing. Many of these jobs are local – installation for example, which accounts for up to half the end value – while some, such as R&D, are pan-European. But whichever they are, we are replacing imports with home-grown European employment.
Energy is not just a simple story about carbon; it is a story about the damage that all greenhouse gases are doing to our environment, to our weather and to our economy. At the same time, we cannot position European industry for the future if it is running on fuels rich in greenhouse gases and imported from parts of the world with which it is difficult to compete. It is therefore crucial to address the supply side of the heat sector with a dedicated strategy, to reduce persistent fossil fuel subsidies and convert them into help for consumers to finance upfront investment in RES technology.
Europe’s policy makers should set their sights to develop a strong home market and give renewable energy investors the confidence to commit capital with a return in line with the challenges they face. The European Commission’s much-vaunted Investment Package should be looking to finance energy projects in the range of megawatts, not gigawatts, to encourage consumers and small businesses to commit and to encourage investment in decentralised energy.
For their part, consumers should come to understand that changing their boiler is probably the biggest thing they can do for themselves and for the environment. There are 120 million central heating units in Europe. 100 million of them are twenty years old or more – well past their use-by dates. We need a scheme to replace those old boilers with renewable heating sources. At the moment, about 4 million out-of-date boilers a year are being replaced. The industry already has the capacity to replace twice that figure. Let’s mobilize the spending power of our citizens to bring forward replacement and improve the environment and economic activity in their cities.
A “cash-for-scrap” boiler replacement scheme, funded either at national or European level, could get the ball rolling and would represent an infinitely better investment in our economy and the future of our climate than the €1.9 billion of subsidies currently going to Germany for hard coal and the €280 million going to the UK for oil and gas production.
Starting this week, we have the opportunity to define our energy future and to develop energy entrepreneurship. We should empower our citizens and our cities to take control of their energy use and create an Energy & Climate Union which will safeguard our environment, our economy and deliver sustainable jobs. And for that to happen, renewable heating and cooling has to be centre stage – not hidden away, but part of the solution.