BRUSSELS May 21 An energy policy vacuum is
looming in the European Union after a firm set of policy goals
for renewable energy, carbon cutting and energy saving expires
To open up the debate on policy direction for renewable
energy, the Commission has put together a communication,
expected to be published officially next month.
A draft seen by Reuters early this month showed a concern
with the economics and with the need to achieve free access to
emerging renewable energy markets, if the EU is to retain its
technological lead in green energy.
Energy Commissioner Guenther Oettinger has said he wants
agreement on a new policy regime before the end of the current
Commission, whose mandate expires in 2014.
An overall aim is that renewable energy should be developed
in "a sustainable, market-integrated and cost effective manner".
The following are some of the main questions addressed in
the draft communication and accompanying impact assessment:
WHAT IS THE RATE OF GROWTH?
So far renewables have grown faster than expected.
This may not continue. Factors contributing to investor
uncertainty include: the lack of a target beyond 2020; a
weakened carbon price; sudden withdrawals of subsidies, for
instance, for solar.
Unless new policy goals are agreed for the next decade, the
Commission predicts a business-as-usual scenario would mean
renewable energy would increase its share very slowly, reaching
25 percent in 2030 and just over 29 percent in 2050.
The sector's growth declines from 6 percent per year in the
current decade, to only by 1 percent per year between 2020-2050,
resulting in reduced job creation and greater dependency on
The renewable energy directive adopted in 2009 only requires
the Commission to present a post-2020 renewable energy roadmap
in 2018, the communication notes, but adds the Commission senses
"a growing belief amongst stakeholders that planning for the
post-2020 period requires consideration already today".
For now, the only firm incentive in place beyond 2020 is a
decreasing EU Emission Trading Scheme (ETS) cap by a factor of
1.74 percent per year.
WHERE WILL THE MONEY COME FROM?
Costs for onshore wind and solar energy have declined
sharply and they are expected to be competitive in several
markets by 2020, the Commission says.
"The Commission advocates moving as rapidly as possible
towards schemes which expose producers to market prices and
encourage cost reductions avoiding over compensation," it says
in the communication on renewables.
For newer technologies, however, it predicts "certain cost
effective and well-targeted support schemes will still be
necessary beyond 2020".
It also argues abrupt withdrawals of subsidies in some
member states have been "disruptive".
To try to ensure best practice, the Commission intends to
prepare and publish guidelines on the creation, design,
structure and reform of renewable energy support schemes in
WHY DO WE NEED RENEWABLES?
The EU wants renewables to ensure security of supply and
reduce dependence on foreign imports, as well as to cut carbon
More than half the energy consumed in the EU comes from
countries outside of it, making the EU the world's largest
energy importer. It imports more than 80 percent of the oil and
more than 60 percent of the gas it consumes.
The Commission has said that last year oil imports alone
cost 315 billion euros ($400.74 billion).
To keep climate change below 2 degrees Celsius, both the
European Council of ministers and Parliament have set the
objective of reducing greenhouse gas emissions by 80-95 percent
by 2050, compared with 1990 levels, but this is a political
rather than a legally enshrined goal.
WHAT ARE THE POLICY OPTIONS?
Future options range from business as usual, meaning no new
policy framework after 2020, although the ETS, designed to cut
greenhouse gases, would remain in place, to a full update of the
set of targets, backed up by financial support schemes.
HOW MUCH WILL THE GRID COST?
Huge investment is needed to help bring about the Commission
dream of a single European market, maximising use of renewable
power across borders.
Commission estimates find about 100 billion euros are needed
for new electricity transmission lines alone.
The Commission's multi-annual budget for 2014-2020 in theory
will include around 9 billion euros for spending on strategic
energy projects, with an impact on several EU countries rather
than just one member state.
($1 = 0.7860 euros)
(Editing by Alison Birrane)