Energy Watchdogs Cast Doubt on EU Renewable Goals

At the first EU summit of 2011 in Budapest today, EU leaders aimed to gain consensus on broad plans for huge infrastructure investments and energy market integration, both necessary to attain the goal of 20 percent renewable power by 2020. While some optimistic appraisals of the EU’s renewable potential have recently appeared, critics cite lack of specific measures for reducing reliance on fossil fuels, increasing energy efficiency and securing the needed investment for energy infrastructure.

Hungary plans to focus on energy while it holds the rotating EU Presidency in the first half of 2011. After the Feb. 4 Summit, EU Energy ministers will meet on Feb. 28 with plans to adopt joint conclusions on two energy documents issued by the EU Commission in late 2010, according to EuroActiv: one outlining its energy priorities toward 2020 and beyond, including reaching a 20 percent renewable energy contribution by 2020, and the other on infrastructure priorities. Hungary will also press for agreement on the EU’s updated Energy Efficiency Action Plan to be presented by the Commission in early March, which the EU hopes will be endorsed at the second formal meeting of energy ministers in June, EuroActiv also reported.

Some independent assessments say the EU will easily meet the 2020 goal, such as an analysis released by the European Wind Energy Association (EWEA) in January of the 27 National Renewable Energy Action Plans submitted to the EU Commission. According to the EWEA, the EU as a whole will easily surpass the 2020 renewables goal — meeting 20 percent of aggregate energy consumption with renewables and 34 percent of electricity use with renewables. The biggest component will come from wind (14 percent), followed by hydropower at 10.5 percent, biomass at 6.6 percent, 2.9 percent from solar projects and 0.3 percent from geothermal energy.

An even more optimistic report from PriceWaterHouseCoopers in March 2010 had said Europe could get all its electricity from renewables by 2050 — without the expansion of nuclear energy.

The EU released its “Energy 2020: A strategy for competitive, sustainable and secure energy” on Nov. 10, 2010, stressing the linkage between energy policy and carbon emissions mitigation and the EU’s goal of reducing its carbon output by 85-90 percent by 2050. It also stresses the importance of integrating the EU energy market in order to remain competitive and calls for nearly two thirds of the EU’s electricity to come from low carbon sources by the early 2020′s (the current level is 45 percent). This was followed by an infrastructure priorities report on Nov. 17, 2010, as well as a communication on the common energy market on Dec. 13, 2010, highlighting the tools in place (and others needed) to prohibit market misconduct.

But, there’s some skepticism on the EU’s energy priorities as set forth so far.

The International Energy Agency (IEA) released a study in September 2008  which concluded that as a whole the EU’s renewable energy and efficiency  goals for 2020 were unlikely to be met. “Oil, gas and coal production in the EU is set to decline significantly by 2030 and be only partially offset by increases in renewable sources of energy.” The report continues: “…under currently implemented policies, the renewables share in final energy demand rises by 4 percentage points between 2005 and 2020, reaching 12.5% in 2020.”

The IEA report did show that the electricity contribution from renewables would exceed the target. But, to attain its broad renewable goals, the report suggested that the EU needed to enact more stringent enforcement of the targets and substantially increase R&D in renewables — a reallocation from nuclear power given that 40 percent of funding targets nuclear fusion, a technology only expected to contribute after 2050.

Environmental advocates and Green Party MEPs have criticized the plans for a lack of specifics measures and point out that the EU is already lagging behind its 2020 goals for energy efficiency by half. EU Parliament Green MEP Claude Turmes (Luxembourg) has pointed to the lack of efficiency targets mandates, which have also been sought by builders, EuroActiv reported. Indeed, the EU hopes by 2020 to save about one-fifth of energy in comparison to 1990, but most member states aren’t nearly ready for the strict measures required, the German Press Agency (DPA) reported.

In order to meet even the more modest 2020 goal, the EU needs new transmission and storage infrastructure, which will require €1 trillion in investment by 2020 (about €200 billion in transportation infrastructure alone) to meet energy and climate goals, most of which will come from market sources.

The plans outlined in the Nov. 17 report include creating an integrated energy network and a new transmission grid (see the “electricity highway” below), as well as smart grids (which help consumers reduce consumption), gas and oil pipelines, and carbon capture and storage infrastructure. EuroActiv reported Nov. 18, 2010 that by 2020 the EU hopes to commission the first “electricity highway” to transport renewable electricity (such as solar in the South and wind in the North Sea) to consumption hubs.

Upon the release of the EU infrastructure priorities, the Renewables Grid Initiative (RGI), a coalition of businesses and NGOs promoting 100 percent grid integration of renewable energy, criticized the lack of clear directions for investors or how it will meet the 2020 targets. RGI’s Executive Director Antonella Battaglini criticized the report for lacking a differentiated approach and legal follow-up as well as for not building sufficient public support for infrastructure development.

Johannes Teyssen, Chief Executive Officer of EON (a major German electricity provider), urged more integration of European energy markets in a Jan. 19 speech in Berlin ahead of the Feb. 4 Summit, warning that otherwise, Europe would fall behind in competitiveness to countries such as China, UPI reported. This market integration requires harmonization at many levels, including regulation of transmission system operators and legislative support for renewable energy sources. Germany, in particular, has been reticent to abandon or reduce the above-market prices for renewables mandated by its Renewable Energy Law (EEG), which has led to the country’s strong solar industry.

Assuming the EU reaches consensus on its energy plans in the coming months, aggressive action on infrastructure development, R&D and energy efficiency — alongside the drive for energy market integration — will be necessary to achieve its dual goals of renewable energy growth and carbon mitigation in 2020 and beyond.

Photo of the Hungarian Parliament by Adam Jones, Ph.D.

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