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Europe’s renewable ambitions

Europe has some high reaching goals when it comes to renewables, but are they achievable? Giles Crosse finds out.

Renewables are really climbing the ladder within the EU, which has already earmarked aims to achieve a 20% share for the entire Union by 2020. The Commission’s energy portal suggests that the 2020 renewable energy policy goals are likely to be met, and exceeded, “If Member States fully implement their national renewable energy action plans and if financing instruments are improved.”

Table 1 – Renewable energy in final energy consumption - progress report
EU member state Share of renewable energy in final energy consumption (%)
2006A 2007A 2008A 2020T
United Kingdom 1.5 1.8 2.2 15
Ireland 3.1 3.4 3.8 16
France 9.6 10.2 11.0 23
Denmark 16.8 18.1 18.7 30
The Netherlands 2.5 3.0 3.2 14
Italy 5.3 5.2 6.6 17
Latvia 31.3 29.7 29.8 40
Greece 7.2 8.1 7.9 18
Slovenia 15.5 15.6 15.1 25
Malta 0.1 0.2 0.2 10
Belgium 2.7 3.0 3.3 13
Spain 9.1 9.5 10.7 20
Germany 6.9 9 8.9 18
Cyprus 2.5 3.1 4.1 13
Luxembourg 0.9 2.0 2.1 11
Lithuania 14.7 14.2 14.9 23
Portugal 20.5 22.2 23.0 31
Finland 29.2 28.9 30.5 38
Poland 7.4 7.3 7.8 15
Bulgaria 9.3 9.1 9.3 16
Hungary 5.1 6.0 6.6 13
Estonia 16.1 17.1 18.9 25
Czech Republic 6.4 7.3 7.2 13
Slovakia 6.2 7.4 8.3 14
Austria 24.8 26.6 28.3 34
Sweden 42.7 44.2 44.4 49
Romania 17.5 18.7 20.3 24
EU 27 8.8 9.7 10.3 20

So, there are opportunities, but also challenges involved in making the switch. Among these are embedding the correct new and forthcoming legislations that will drive progress.

“A proper implementation of the 2009 EU Renewables Directive by EU Member States is the key to achieve 2020 targets,” says Max Rathmann, consultant at Energy & Climate Strategy, Ecofys, The Netherlands. “A large share of such new national policies are still forthcoming or have only recently been implemented and their effect cannot yet be seen in deployment statistics.

“Implementation includes, within each of the 27 Member States, a dozen or more single adaptations to policy measures. There is no silver bullet, you need to get all conditions right: planning, permitting, grid, support schemes for the more expensive technologies, as long as external costs of conventional technologies are not fully internalised, de-risking investments, plus investment certainty in order to attract sufficient capital from investors and banks at low cost.”

Rathmann also feels forthcoming efficiency policies at EU and national level will make it easier to achieve the envisaged shares of renewables in overall lower energy consumption. “Again, there is no silver bullet project. Renewables are characterised by their comparably decentralised and small-scale nature.

“Also, a diversity of technologies exists and needs to be deployed in order to reach 2020 and more ambitious future targets. In the electricity sector hydropower has shown most growth and contribution in the 20th century, more recently onshore wind dominated new installed capacity, it will continue to play a key role, with an increasing role alongside for PV and offshore wind.

“Not to forget the various biomass technologies and concentrating solar power, plus probably tidal and wave in later years. To illustrate this, PV produced in the first half of 2011 for the first time more power in Germany than hydropower. Where hydropower dominated historically, it now is only the fourth most important renewables technology in terms of power production behind wind onshore, biomass and PV.”

Challenges ahead

What kind of challenges are involved in bringing on sufficient new capacity to hit EU renewable energy targets? “Within the heating and cooling sector most countries lacked, or still lack, proper policies to stimulate or enforce use of renewable heat. Given the huge potential for renewable heat this is probably the most important challenge,” says Rathmann. “In the biofuel sector proper implementation of sustainability criteria is of key relevance.
“Planning and permitting procedures are often not yet suited to renewables. As long as the external cost of conventional technologies are insufficiently internalised, for example via the CO2 price, financial support schemes like feed-in tariffs or quota obligations are needed,” he continues. “Their design and stability needs to be improved in many Member States to give sufficient investment certainty and make renewables the economically most favourable choice for investors, including the large institutional investors like pension funds.”

Another pressing matter within EU circles concerns the grid, and developing the right efficiencies to enable more sensible power sharing across any future renewable European continent. “On the 2020 time scale, grid enforcements are especially needed on a regional level to integrate wind power from regions with weak grids,” Rathmann suggests. “Supra-national planning of infrastructure is needed to optimise the energy system which will consist of more and smaller production units. An example surrounds the offshore interconnections which will facilitate the coupling of electricity markets and increase the capability of the system to incorporate offshore wind energy.”

Looking forward, Rathmann points to key technologies within the heat sector such as biomass, solar thermal and heat pumps as potential game breakers. Alongside these, he also feels the vast potential of low-cost energy efficiency improvements needs to be harvested. Perhaps most importantly, are the EU’s renewable energy ambitions actually achievable?

“From a technical perspective the 2020 targets are absolutely achievable, it all depends on the political will to implement the proper political framework,” Rathmann replies. “Recently, Ecofys has shown in ‘The Energy Report’, published with WWF, that almost 100% renewables are feasible globally by 2050, within that perspective 20% in 2020 is just a first step. In the end, getting the conditions right for very high renewables shares post-2020 is more important than whether the 2020 target is reached in 2019 or 2021.

“More technologies and more Member States than today will play an important role in the growth of renewable energy production,” he continues. “It will be exciting to see what further cost reductions and capacity increases have been achieved in PV, offshore wind, concentrating solar power, and whether the sleeping giant, the renewable heat sector, starts to grow more rapidly.

“If things go well a renewable energy target for 2030 will be decided by then, and ambitious post-2020 caps in the Emission Trading scheme, and even the laggards among the Member States and utilities will have realised that renewables are no longer a niche market but mainstream and act accordingly, making investment decisions for new conventional capacity an exception.”

Elsewhere, Lucie Tesnière is Policy Adviser to the European Renewable Energy Council, which in May 2011 took the bold step of calling on the European Commission, Member States and the European
Parliament to deliver on the European Union’s long-term climate commitment, by proposing and endorsing a legally-binding EU target of at least 45% renewable energy by 2030.

“We should definitely be able to move beyond the overarching targets, and in some ways I feel it is possible we might hit something in the region of 24% overall by 2020 across the EU Member States,” she says. “The most important legislation overall has been the Renewable Energy Directive, which is really key to all of the goals towards 2020. Then there are additional legislations, proposals and communications being developed by the Commission, some of which will be adopted and contribute to the right positive change.

“Something to remember is that when the initial guidelines were being put in place, from 2006/13, the real issue of climate change had not yet been completely realised, and the rise in price in the barrel of oil had not yet really kicked in,” Tesnière continues.

“To an extent this may be why we don’t always necessarily see the renewables aspirations correctly reflected in actual budgets, something like 69% of R&D budget in the EU for example has been directed towards nuclear, with perhaps 15% moving to develop better renewable technologies, this perhaps is where targets and the overall industry as a whole might do better.”

Tesnière also believes that in terms of communications the infrastructure overall requires some streamlining, with a better grid framework and better ideas for a longer-term time frame. “For example in the Roadmap 2050,we are looking at new energy sources for the next 20 to 40 years, and we need to think about which scenarios those will work in, plus we really require more binding renewables targets to 2030 in addition to add clarity and help encourage this longer term strategic change.

“The biggest issue at the moment is really the economic crisis, because this is going to impact upon the funding which is available from public sources and there are likely to be subsidy cuts too, to those companies which are looking to develop the new tech that is going to impact and enable scale up,” she says.

“The International Energy Agency (IEA) is also talking about the bigger picture and we need to be aware of that too. If you look at the relative high prices in terms of crude oil, there are relative comparisons which can be made in terms of the right energy choice.
“There is every possibility that sums similar to the budget deficits of Greece and Portugal put together might be mitigated by making wiser energy investment choices in the immediate term, rather than waiting and then dealing with the rising price of crude.

“I would like to see more integration overall within the EU, and perhaps some better grid connectors, plus we would like better potential to tap into more investment and better distribution in the terms of energy being used,” Tesnière concludes.

Long way to go

Within any realistic scenario, there is still a long way to go. The Commission’s January 2011 “Renewable Energy: Progressing towards the 2020 target” report recognised the need to, “Make faster progress in developing the electricity grid to balance higher shares of renewable energy.” It also revealed a strong requirement to, “Streamline infrastructure planning regimes while respecting existing EU environmental legislation and strive to conform to best practice.”
Of course, the EU is far better positioned to achieve this than may other places in the world, given the opportunities provided by its structure, which enable far tougher regulatory frameworks. These have already had marked effects in other areas of sustainability, such as waste and recycling, though these are also show how even legislation and punitive fines can’t always push Member States, such as Greece for example, to get their act together.

Yet in spite of these risks, the overall mix of legislative force, technology development and overarching desire at least give Europe’s ambitions a decent shot at success over the next decade.

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