(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON Feb 10 The argument that renewable
energy should be favoured because it will create "green jobs" -
a view held by environmental groups, policymakers and companies
in the renewables sector - is trumping economic logic and
leaving consumers out of pocket.
Developed countries are overhauling their ageing fossil fuel
energy and at the same time responding to new challenges
including energy security and climate change.
Europe's wind lobby, the European Wind Energy Association,
estimates that nearly a half of all new power generation
capacity installed in the European Union since 2000 was from
renewable sources. What is the objective of this shift?
Is it simply to meet binding renewable energy targets agreed
by the bloc three years ago, or is it to help cut carbon
emissions, create green jobs, promote a diverse fuel mix, or
cheap energy? Or a combination of these?
One clue comes from an EU programme meant to help countries
share the effort and cut the cost of reaching renewable energy
targets: its failure so far shows how the sector, and "green
jobs", are treated as a special case compared with other energy
The EU's Renewable Energy Directive sets stretching national
targets with the collective aim for the bloc to get a fifth of
all energy from renewable sources by 2020.
Given that different regions have different energy
resources, the law allows countries to meet their targets by
developing renewable energy beyond their own borders elsewhere
That works like carbon offsetting, where countries,
companies or members of the public pay someone to cut carbon
emissions on their behalf, but for renewable energy instead.
No country has yet used the option, and only two of the 27
member states are even considering it (Italy and Luxembourg).
That's despite the fact almost half of the countries expect to
generate renewable energy to spare, and so for sale.
The result has produced some odd decisions: last year
cloudy, northern Britain installed more solar power (700
megawatts) than sunny Greece (350 MW) or Spain (400 MW), using a
price premium called a feed-in tariff which was a third or more
above that of leading solar power countries, Italy and Germany.
The European Commission 12 months ago tried to coax member
states out of such illogical choices, reminding them of the
Directive's "cooperation mechanisms" which it said could save up
to 10 billion euros ($13.30 billion) a year.
The Commission said that money was tight, that annual
renewables investment was half that needed to meet the 2020
target, and so it made sense to use funds more efficiently.
"Billions of euro could be saved if member states treated
renewable energy as a commodity in a single European market
rather than in national markets," it said in January 2011.
"Given the fiscal constraints member states currently face,
with combined government deficits of 868 billion euros, every
effort should be made to minimise costs. The first step to such
a change is the use of the new cooperation mechanisms created by
the Renewable Energy Directive."
A year on, nothing has changed: still no country has made
use of the mechanism, a European Commission spokeswoman
confirmed on Thursday.
What does that tell about national motives?
Do countries dislike meeting their environmental targets in
No they don't. Many EU countries including Spain, Italy,
Denmark and the Netherlands have actively bought carbon offsets
to meet Kyoto targets for cutting greenhouse gases, where
they've funded emissions cuts in developing countries because
it's cheaper than at home.
Are countries protective about their energy resources,
perhaps preferring to develop these at home instead of in other
Possibly, although the logic of the trading scheme is to
free up resources to develop local, non-renewable energy
resources where a country has a natural advantage in these.
Do countries, instead, view green energy as a strategic
sector for the future, where they want to establish a foothold?
This is more likely: policymakers are pinning growth hopes
on the green economy and the seductiveness of green jobs is a
part of that: it seems countries don't want to develop such jobs
for their neighbours.
The implication is they've been persuaded that green energy
jobs are better than other energy jobs, since they could use the
scheme instead to explore local shale gas, ramp up nuclear power
or exploit abundant liquefied natural gas.
An interesting first major test case might be a "Project
Helios", at present just an idea favoured by Athens to develop
its solar resources and to help towards Germany's target.
German ministers and Chancellor Angela Merkel last year
tentatively supported the idea, as a cheaper alternative to
developing more solar power at home: Germany has nearly 40
percent of global capacity.
German environment minister Norbert Roettgen is concerned,
however, for the 100,000 domestic jobs which he says depend on
Meanwhile, British solar power companies and the
environmental group Friends of the Earth have taken the UK to
court to slow the rate at which it pares solar support.
"Premature cuts could threaten 29,000 jobs," says the
website of one of the companies, Solar Century.
($1 = 0.7517 euros)
($1 = 0.6312 British pounds)
(Reporting by Gerard Wynn)