BRUSSELS (Reuters) - Eight big energy firms called on the European Union to hurry up and deliver binding 2030 green energy targets, saying the industry needed guidance beyond existing policy if ambitions to move towards a low-carbon economy are to be achieved.
The EU has a set of 2020 goals to cut carbon by 20 percent, increase the share of renewables in the energy mix to 20 percent and improve energy efficiency by 20 percent.
EU “road maps” give general indications of future direction, but no formal policy beyond 2020, which the energy firms argue hobbles decision-making, especially in a sector investing for the very long term.
“New ambitious policy measures for 2030 and beyond are now critical for investors to develop and deploy the technologies and solutions of tomorrow,” the joint letter to the European Commission and EU national governments said.
It was signed by Britain’s SSE, Dutch power firm Eneco, Dong Energy of Denmark, Greece’s Public Power Corporation, Acciona of Spain, Italy’s Sorgenia, EWE AG of Germany and Portugal’s EDP Renewables.
To limit global warming through carbon emissions, EU policymakers see a need to move towards virtually carbon-free power generation by 2050.
Progress so far has been mixed.
The set of 2020 targets is a combination of binding and non-binding goals and only the binding targets are being met.
At the current rate of progress, the EU is only likely to make it halfway to its aim to cut energy use by 20 percent.
In addition to the debate that has divided member states on whether only binding targets work, a collapse in carbon prices has also hampered progress towards a greener energy mix.
Policymakers also have to focus on the weakness of the carbon market, which is intended to stimulate a shift to a lower-carbon economy.
But the price of carbon allowances on the EU Emissions Trading Scheme collapsed to record lows in December and are still around 9 euros, well below the level needed to spur investment in low-carbon energy.
“The low ETS carbon price with over supply of emission allowances for 2020 is far from providing the foundation for investments in renewable energy technologies,” the letter said.
The EU’s energy chief, Guenther Oettinger, has given the bloc a 2014 deadline to agree to 2030 energy goals but it is uncertain whether these targets will be binding.
The Commissioner has said policymakers should wait to see if alternative sources of energy like biofuels for road transport can compete with ordinary fuels before strict targets are set for 2030.
The companies said targets alone would not work without upgrades to the bloc’s ageing energy grids, making them cheaper to run and ensuring a more even distribution.
European Commission research shows improved energy efficiency could create around half a million jobs and 34 billion euros ($44.9 billion) in gross domestic product in 2020.
The cost to energy companies would be just one euro cent for every kilowatt hour of energy saved, the research shows.
For every dollar of investment not made in the power sector before 2020, an extra $4.3 would need to be spent afterwards to compensate for increased emissions, figures from the Paris-based International Energy Agency showed.
Reporting By Claire Davenport