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Euro Commission off target

By Dave Elliott

The European Commission (EC) has been negotiating new EU energy and climate targets for post-2020. There was a lot of lobbying. The UK, along with the Czech Republic, was strongly opposed to the EU setting a new renewable energy target for 2030, favouring an overall 50% by 2030 reduction target for greenhouse gas (GHG) emissions instead. That it said would leave it up to each country to decide on how to achieve it optimally.

UK Energy and climate secretary Ed Davey said: ‘We need a technology neutral approach to how individual countries meet their emissions targets … we will therefore oppose a renewable energy target at an EU level as inflexible and unnecessary.’ Similarly, Chris Davies, a Lib Dem MEP, warned against the cost of a ‘almost religious commitment to renewables. Overall, having a renewable energy target is an expensive way of reducing CO2 emissions, and rules out other long-term options such as carbon capture and storage’. Labour also said a 2030 renewables target ‘overlooks a number of low-carbon but non-renewable technologies, such as carbon capture and storage.’

Odd that – CCS is years away at best and few claim it will be cheap. Similarly for the (unmentioned) nuclear option. While renewables are getting cheaper rapidly – solar PV especially. That was one reason why Germany, Denmark, Austria and Finland backed a new EU renewables target: it was also claimed it would create around 568,000 more jobs across Europe by 2030 than an emissions target alone.

However, the CEOs of Europe’s ten largest energy companies, including E.ON, CEZ, Enel and RWE, said that high subsidies for renewables threatened the functioning of the energy market and could cause winter blackouts. They called for an end to renewable subsidies and for the EU to scrap its renewable energy target. They were then opposed by a group of 77 renewables companies/associations, including the European Wind Energy Association, Dong and Alstom, who urged continuing help for renewables and a binding EU target for renewables for 2030.

In the event, the EC decided to go for a 40% GHG cut target for 2030 and a 27% overall EU renewable energy target for 2030 (up from 20% for 2020), but with no national renewable energy targets set. So DECC won on that, but not on the 50% GHG target. The Renewable Energy Association was dismayed: it said the current EU mandatory 2020 UK targets had been ‘particularly valuable when  negative rhetoric from ministers has damaged market confidence in the UK’. But the Daily Mail loved it! Free of EU targets, post 2020, we could forget wind power and focus on nuclear and shale gas!

The ECs decision to avoid imposing mandatory national targets for renewables for 2030 certainly reflects a weakening political commitment to renewables. The EC’s proposed 27% overall EU renewables target is quite low, and it’s not clear what mechanisms there will be to ensure that even this is reached. Will the overall 40% technology unspecific GHG target be enough to do that? The EC did propose that the 40% emissions target would have to be achieved ‘through domestic measures alone’, meaning that member states couldn’t offset their reductions by paying for ‘offset’ carbon cutting in other countries.  But for some countries, the emphasis could mainly be on nuclear and gas/CCS, with renewables being sidelined. 

With the EU’s economic constraints clearly in mind, these proposals are plainly a political  compromise: ‘What we are presenting today is both ambitious and affordable,’ Commission President Jose Manuel Barroso said. But it’s not yet a done deal: the proposals have yet to be finalized; they are subject to review by heads of government and it is not expected that formal legislative EC proposals will be agreed before 2015. So there is time for some haggling. Green groups have said the new targets lack ambition and the 40% emissions cut was ‘dangerously low’, especially since the previous 20% by 2020 GHG target had already been reached by the EU as a whole by 2012. Some countries, including the UK, had urged the Commission to propose a higher target of 50% by 2030, others had held out for 35%. But Climate commissioner Connie Hedegaard said that, given the economic climate ‘a 40% emissions reduction is the most cost-effective target for the EU and it takes account of our global responsibility’.

So what’s the bottom line? It should be easy for many countries (the UK apart!) to meet the new 27% renewable energy target by 2030 should they wish. Indeed five EU countries had already achieved 27% or more (in some cases much more) by 2012, and by 2020, that number should rise. The 27% overall EU target is thus limited and may relieve many others from having to try so hard. Given it’s enthusiasm for nuclear and shale gas/CCS, and its current pathetic 4.1% renewable energy contribution against its 15% 2020 EU imposed renewable energy target, you can see why the UK government wanted to avoid yet more imposed EU renewables targets post 2020…and to go for an overall GHG target instead.

About the best you can say is that the 40% GHG target will put pressure on some EU countries to cut emissions, but unless you believe nuclear and CCS will get cheap and are the way ahead, the loss of national renewables targets is serious: some of these green energy technologies may be expensive at present, but most look certain to get cheaper in the medium term, with huge potential for expansion across the EU. By contrast it’s hard to see nuclear and CCS as serious and significant options in the short term, or even the long term. But in the UK that may be what is in store. As DECC has already indicated, after 2020, renewables expansion will slow, while there is talk of expanding nuclear to perhaps 75GW, supplying 86% of UK electricity by 2050, with, in the interim, shale gas presumably topping up supply, aided by CCS to limit emissions. And this in the country with the EU’s largest renewables resources, mostly so far untapped.

No question then renewables are facing some political problems, with the EUs backtracking being a major worry. The problems may not be insurmountabale, but, political change apart, it might help if, in addition to continuing price reductions for existing renewable energy technologies, completely new technological ideas emerged. As I will be reporting in the next few posts, that is happening: it may be that innovation will move things along when politics has stalled.

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