Green energy needs milestones to grow: EU Commission

June 8, 2012 by  
Filed under Green Energy News

Wed Jun 6, 2012 3:28pm EDT

BRUSSELS (Reuters) – Europe must agree on 2030 goals as soon as possible to spur investment in renewable energy, or green power growth will fizzle after 2020, the European Commission said on Wednesday in its latest strategy statement.

Many in the renewable energy sector agree on the need for strong guidance, and they want legally binding targets. But some of the EU’s 27 member states strongly oppose new legal goals for renewables and would prefer non-binding milestones or nothing at all.

The EU so far has a firm target to increase the share of renewables in the energy mix to 20 percent by 2020, which analysts and industry say it should meet and could exceed.

“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 the 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’s idea is that renewables, such as solar and wind power, should be generated wherever they are cheapest. It reiterated its backing for an integrated market that would connect to northern Africa, where it sees the potential for large-scale solar generation to supply Europe.

Subsidy schemes should be consistent across the bloc, the Commission said, adding that abrupt changes shatter investor confidence.

At the same time, Oettinger said subsidies should be gradually withdrawn as renewables become more and more viable.

“Basically, renewables have to be able to prove their worth on the international market, like all other goods and services,” he told reporters.

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

The renewables communication only lays out scenarios for how to move on from the 20 percent renewables binding goal, which is one of a set of three green energy targets to be achieved by 2020. The other targets are for a 20 percent reduction in carbon emissions and a non-binding 20 percent cut in energy consumption compared with projected levels.

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

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

Britain, for instance, has said the emphasis should be on the carbon goal and that a renewable target might put other low-carbon generation, such as nuclear or even natural gas, at a disadvantage.

Nuclear generation of power is carbon-free, while natural gas is the least carbon intensive of the fossil fuels.

Many in the renewable industry say the collapse of the ETS to less than 7 euros – far below the 20 to 50 euros analysts have said is necessary to encourage low-carbon investment – demonstrates the need for a renewables target.

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.

Oettinger said he had not decided on any one option and that it was up to member states to debate the possibilities.

Germany’s environment minister welcomed the strategy paper but took issue with the idea of harmonized EU support schemes.

“The European Commission has sent an important first signal with its strategy on renewable energy by 2020 in time to put in place investments and a reliable framework of conditions,” German Environment Minister Peter Altmaier said.

“However, it is important that member states can move according to national potential and developments. That would not be possible with a harmonized EU-wide standard support schemes.”

Among those calling for a strong increase in ambition is the European Renewable Energy Council (EREC), the umbrella organization for the European renewable energy industry.

It has urged a binding target to ensure renewables make up 45 percent of the energy mix by 2030 and also wants to raise the goal for carbon cutting to 30 percent from 20 percent for 2020.

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

The European Wind Energy Association said strong growth in renewables to 2030 could generate more than 3 million jobs.

(Additional reporting by Madeline Chambers in Berlin; Editing by Rex Merrifield, Jane Baird and John Wallace)

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