* China also asked for technology flexibility
* Grid urgently needs updating
* 100 bln euros needed for power transmission lines
By Barbara Lewis
PARIS, May 4 Free access to emerging renewable energy markets such as Brazil, China and India will be a major factor in helping the European Union maintain its lead in green energy, according to draft documents seen by Reuters.
A draft European Commission communication on renewable energy, expected to be published later this month, said EU member states need to share renewables across borders with the help of improved infrastructure and underlined the urgency of agreeing on new laws to guide investment.
The EU is a pioneer in green power and officially is on track to reach a goal of increasing the share of renewables, such as solar, wind and wave, in its energy mix to 20 percent by 2020.
For the future, however, progress could be much harder to achieve as member states squabble over policies to replace existing targets and as subsidies for renewable energy fall victim to the region's economic crisis.
The emergence of China as a leader in green technology is also challenging the ability of the European sector to export technology and expertise as Chinese rivals threaten to grab market share.
"All in all, renewable energy export opportunities will strongly depend on the elimination of trade barriers in and free access to key emerging renewable energy markets such as in China, India and Brazil," an impact assessment accompanying the a Commission communication on renewable energy said.
China's Vice Premier Li Keqiang visited Brussels this week for talks on energy cooperation.
"We hope that the EU will exercise more flexibility in exporting higher technology to China. Therefore, we can benefit from each other's strengths," Li said in an address.
Some in the European solar industry have been agitating for action to fight off competition from cheaper Chinese products, perhaps through trade moves and defensive duties.
Others have said a better way to save European jobs could be for EU firms to learn from China, whose strength is in producing on a large scale.
The draft communication on renewable energy said the way forward is to ensure a single, open EU energy market as well as access to markets outside the 27 member states.
EU policy has created "cooperation mechanisms" to lead to greater trade in renewable energy, but so far only two member states said they would use these mechanisms to achieve part of their 2020 goals, it said.
At the same time, 10 member states expect to have a surplus of renewable power, it said without naming them.
To help achieve the Commission dream of a single energy market with a rising share of renewable power, an estimated 100 billion euros ($131.1 billion) needs to be spent on electricity transmission lines alone.
Investments are far more likely if the Commission, the EU's executive arm, can achieve speedy agreement on what policy should follow its 20 percent target in the years after 2020.
The communication lists a set of options for moving on from the 2020 target, ranging from firm goals, with financial support agreed across the EU, to no targets at all.
Some business leaders are keen for more binding targets to be agreed, while others resist regulation. Member states also have various objections, with coal-reliant Poland the most high-profile opponent of low-carbon goals.
The European Commission has strongly backed green growth as a way out of recession, and the draft documents seen by Reuters said a strong renewables sector could generate more than 3 million jobs.
At the same time, the impact assessment said the cost of financial support for renewable power could result in higher energy prices, affecting consumers and energy-intensive industries.
Other risks include public resistance. Although the public has largely accepted renewable power, some campaigners have raised issues about land use and the environmental effects of proposed infrastructure.
The Commission routinely does not comment on leaked drafts. ($1 = 0.7625 euros) (Additional reporting by Silviu Pop in Brussels, editing by Jane Baird)