The EU countries have promised to get 20 per cent of their energy from renewables by 2020. The EU can meet this target but only if governments take action now to boost investment in the full range of renewable energies. They should concentrate as much on biomass and renewable gas as renewable electricity. As important is expanding the infrastructure needed to link renewable sources of energy with consumers. The EU needs to facilitate the rapid expansion of electricity grids, including the construction of an offshore grid spanning the North Sea and the building of a grid linking Southern Europe with North Africa.
The rapid expansion of renewable energy forms a key element of the EU’s drive to cut overall emissions of greenhouse gases by 20 per cent by 2020. Renewables will in the future provide cheaper (and more secure) energy than fossil fuels, and it is now accepted, following the publication of the British government’s Stern Review, that the cost of not controlling climate change is far higher than the cost of controlling it.
The EU currently generates around 8.5 per cent of its total energy needs from renewable sources. The member-states have agreed collectively to raise this proportion to 20 per cent by 2020. This is possible and would benefit Europe in a number of ways. It would help control climate change, greatly increase EU energy security and create many new jobs and industries. But this target will only be met if EU governments focus on increasing the use of renewable gas as well as electricity, and move quickly to improve electricity grid infrastructure.
Renewable energy is not just about renewable electricity. Only a fifth of EU energy consumption comprises electricity, so it will not be possible to meet the overall renewables target through increased use of renewable electricity alone. Governments need to focus on the full range of renewable energy sources, in particular biomass and biogas.
Biomass is easily the most important source of renewable energy across the EU. It utilises energy crops, waste wood, wood chips and forests as a source of heat and power. Not all biomass is good in climate terms, but it has a vital role to play. Biogas involves making gas from sewage, manure and agricultural waste, which is then fed into existing gas distribution grids. There is also scope for an increased role for biofuels, although the same caveats apply to biofuels as to biomass.
Increasing investment in renewable energy is only part of the challenge. Just as important is expanding the infrastructure required to link renewable sources of energy to energy-users. If the EU is serious about meeting the renewables targets – and the other 2020 targets agreed in the climate package in December 2008 – it needs to facilitate a rapid expansion of electricity grids (both onshore and offshore).
In order to link intermittent energy sources such as wind, Europe needs far more connections between national electricity grids (since it is likely that there will usually be enough wind blowing somewhere in Europe). For example, the EU should help to finance the construction of an offshore grid spanning the North Sea, linking Denmark, Germany, the Netherlands, Sweden and the UK. Similarly, it should support the building of a grid linking Southern Europe with North Africa, which would make it possible to import energy from African solar farms.
EU support for the expansion of electricity grids could be undertaken under the trans-European-network for energy (TEN-E) programme The EU should also stop spending money on things which damage the climate. Under the common agricultural policy (CAP), biofuel production receives subsidies, irrespective of whether the biofuel in question actually reduces emissions of greenhouse gases. Many biofuels are no more environmentally sustainable than gasoline, and sometimes less so. Subsidies to the agricultural sector should be linked to emissions of greenhouse gases. For example, subsidies to emissions-intensive forms of agriculture such as livestock farming should be cut and the use of artificial fertilisers discouraged.
(...) It was not until 2008 that the EU really got serious about renewables. The 2008 directive set binding targets for the proportion of energy consumption that must be produced renewably. Targets vary by member-state, depending on each country’s starting point and income level. Every member-state has to increase the proportion of its energy generated renewably by 5.5 percentage points between 2005 and 2020, with the remaining gap shared among the member-states according to wealth. Richer member-states are generally required to do more, poorer ones correspondingly less. For example, Sweden is supposed to raise the proportion of its energy generated renewably to 49 per cent by 2020, whereas Hungary’s target is just 13 per cent.
The directive obliges each EU member-state to outline the steps it will take to meet its target in a national renewable energy action plan (NAP), to be submitted by June 2010 to the Commission. NAPs will include sectoral targets for the shares of transport fuel which must be renewable (there is an EU-wide target of 10 per cent by 2020) and targets for the proportions of electricity and heating/cooling that must be renewable.
NAPs must also include proposals for removing the administrative barriers to greater investment in renewables and the obstacles to connecting renewable energy sources up to electricity grids. National governments will have to provide progress reports every two years. Member-states can agree to a ‘virtual’ transfer of renewable energy from other member-states that have exceeded their targets. Under certain conditions, they can count actual physical imports of renewable energy from non-EU countries (for example, from solar farms in North Africa) towards their national target. The directive also requires EU countries to take “the appropriate steps to develop transmission and distribution grid infrastructure, intelligent networks, storage facilities and the electricity system,” and to speed up authorisation processes for approving the expansion of grid infrastructure.
(...) The proportion of energy coming from renewables has increased by over a third since the publication of the Commission’s white paper in 1997. The biggest absolute increase has been in biomass, which accounted for 3.5 per cent of EU-27 energy consumption in 1997 and 5.4 per cent in 2007. However, in relative terms, renewable energy from wind-power has expanded most rapidly. Wind generated 0.5 per cent of the EU’s energy needs in 2007, a ten-fold increase compared with 1997, and wind accounted for over a third of all new generation facilities built in 2008. Renewables of all types accounted for almost 60 per cent of the new generating capacity in that year.
Much of the expansion in the EU’s renewable energy capacity over the last decade has been in Germany. In 1996, half of total EU renewable energy was accounted for by France, Sweden, Finland and Austria. By 2007, France, Sweden, Germany and Spain accounted for half. However, measured by the proportion of total energy used that is renewable, the top four member states in 2007 were Sweden (31 per cent), Latvia (30 per cent), Austria (24 per cent) and Finland (23 per cent). Germany managed over 8 per cent and France, Italy and Spain 7 per cent. The UK, which has the EU’s best wind, wave and tidal resources for generating renewable energy, derived just 2.1 per cent of its energy from renewable means. This put the country second from bottom, above only Malta.
Sixteen per cent of EU electricity was generated renewably in 2007. The three best-performing member-states were Austria (78 per cent), Sweden (60 per cent) and Latvia (49 per cent), reflecting these countries’ heavy investment in hydroelectric power. But the EU’s success in meeting the 2010 and 2020 renewables targets will largely depend on the performance of the big six countries : France, Germany, Italy, Poland, Spain and the UK.
Of these countries, Spain performs best, with 20 per cent of its electricity generated renewably, followed by Germany (15 per cent), Italy (14 per cent) and France (13 per cent). The UK (5 per cent) and Poland (4 per cent) stand out as the weak performers. The European countries which have achieved rapid growth of wind and solar energy – Germany, Spain and Denmark – have so-called feed-in tariffs (tarifs de rachats subventionnés). These guarantee relatively high prices for renewable energy, and hence help to overcome the cost disadvantage that renewables suffer compared with conventional energy sources. The guaranteed income stream means that investors have more certainty and so a lower cost of capital.
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