Europe set to decide energy future

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Europe’s climate and energy future hangs in the hands of politicians meeting in Brussels today and tomorrow. PV Tech summarises what's at stake and reviews the reaction so far.

The European Council is gathered to decide climate and energy policy up till 2030.

The latest proposals stand at a 40% reduction in greenhouse gas (GHG) emissions, 27% renewable energy generation and 27% improvements to energy efficiency.

With only binding, EU level targets for renewables and GHG – coupled with an EU level, non-binding energy efficiency target and no national targets.

According to EurActiv, targets will only be passed by a unanimous vote of all 28 member states – effectively handing member states the option to veto.

The energy efficiency target of 30%, labelled “business-as-usual” has already been watered down to 27%.

A proposal for a 15% crucial interstate energy exchange has already been floored by a spat between Spain, France and Portugal.

Green MEP Claude Turmes said on the veto option: “The utmost concession has been given to UK and Poland by extending the Council's veto right and thereby clearly sidelining the new Juncker Commission and the European Parliament.”

“The Energy Union has died before being born.”

In a speech yesterday, President-elect, Jean-Claude Juncker's said: “In tomorrow's increasingly competitive world, Europe will only be able to thrive if we get it right on Energy Union.”

“I would plead with Member States to find an agreement in the European Council so that we can go to Paris [for UN climate talks in 2015] with a clear mandate. We all have to be pulling in the same direction if progress is to be made,” Juncker said.

Green reactions

Europe’s Renewable Energies Federation called for 40% across all three GHG, efficiency and renewables targets.

The UK Renewable Energy Association says the proposed 27% renewables target “is a weaker market signal” than the current 20% renewables by 2020 framework. “The figure is not ambitious and the target is not binding on individual Member States,” said the REA.

REA chief executive Nina Skorupska said “so many mixed signals” is hindering the UK renewables market and “binding 2030 targets will give businesses the certainty they need”.

Skorupska also highlighted renewables businesses are “usually smaller and younger than fossil fuel and nuclear companies, a ‘technology neutral’ framework will leave them at a disadvantage”, but ambitious policies would deliver subsidy-free renewable energy for transport heat and electricity.

Skorupska also said stringent targets will boost “domestic skills and supply chains and, ultimately, the sustained cost reductions that will take these technologies to zero subsidy.”

Greenpeace said the current targets are “so unambitious that the same amount of renewable energy could be achieved without any new energy targets at all” – and called out the lack of action from leading solar nation, Germany. 

Fossil fuels reaction

The International Association of Oil & Gas (IAOG) producers, representing companies who explore for and produce oil and gas wrote to the European Council asking for “technology neutrality” and to phase out subsidies, mentioning the maturity of on shore wind, while saying nothing on fossil fuel subsidies.

IAOG also called for the EU Emissions Trading System to be the centre of a single target for GHG – with no mention of energy efficiency or renewables.  

IAOG argued for gas to replace coal, that EU emissions are insignificant globally and to prioritise “EU industry competitiveness and associated jobs” over emissions reduction and green job creation, before telling the EU to “step up its efforts to reach a global agreement in Paris in 2015.”

The letter talked up gas plants as “the best option available” and as the only option for “keeping lights on”, before dismissing renewables due to intermittency – leaving out storage or the interstate exchange of renewable energy.

Then arguing with “a fully integrated internal energy market, gas would be able to move freely throughout the EU, improve Europe’s security of supply and contribute to greater energy efficiency.”

IAOG suggested more fossil fuel use as a means to combating climate change, energy security and emissions: “The European Commission recognises that increasing domestic oil and gas production is a key action. Europe still holds significant potential: the Mediterranean, the Black Sea, the Arctic and shale gas alongside the remaining North Sea potential.”

“Current conditions have seen EU exploration activities fall to record lows. To develop that untapped potential, we need predictable national fiscal and regulatory frameworks. While we should avoid unnecessary legislation, policies encouraging the role of oil and gas in the future EU energy mix can help to trigger more investment – for the benefit of Europe’s security of supply, industrial competitiveness and economic growth.”

IAOG believes further fossil fuel use “would move the EU closer to reaching its energy and climate goals, without drifting us away from the objective of a prosperous and sustainable Union.”

Business reactions

The deputy director-general for CBI, a UK business lobbying organisation, Katja Hall said “bold decisions” are vital to give business “the clarity it needs to make long-term investment decisions,” calling for a single binding target of 40% for GHG, but no mention of energy efficiency or renewables.

Hall also pleaded the EU for “greater support for energy-intensive industries” to ensure they are not “left out of the transition to a low-carbon future”.

The Prince of Wales's Corporate Leaders Group (CLG), representing household names such as Acciona, Coca-Cola Enterprises, DSM, Ferrovial, Philips, Skanska, Shell, and Unilever said a “failure to agree a deal this week will delay much-needed low carbon investments in Europe and will impact innovation and low carbon competitiveness.”

In an open letter, the group urged a deal and not postponement, and a 40% GHG target, 30% renewables and 30%-40% energy efficiency target. “Some business voices believe the most cost-effective way forward is to focus on only this target alongside a strong ETS to drive low carbon investments” the letter states.

Philippe Joubert, chair of CLG called for a reform of the EU Emissions Trading Scheme and a strong carbon price, and a drive to “low carbon investments must be a priority alongside targets for low carbon and energy efficient technologies.”

The letter also said: “We urge you to ensure that low carbon technologies such as carbon capture and storage are included in the final Council text.”

Paul Polman, CEO of Unilever, represented by CLG, said: “We know that the economic cost of inaction is now greater than action. Investing in energy efficiency and renewables makes sound business sense.

“Without the right policy frameworks and political signals, even the most determined business action will not reach the scale we need to make a real difference,” said Polman.

Not just EU policy

From outside the Europe, the former Costa Rican president, Jose Maria Figueres accused Europe of “not kicking its coal habit” as “three-quarters of its coal-fired power stations may still be burning in 2030. That does not look ‘ambitious’”.

Figueres said “significant gains in renewable energy are under threat as the fossil fuel industry fights back”.

“Europe's future hangs on its decisions – but so does the rest of the world. Europe's continuing emissions will affect our people, our wildlife, our fisheries, our coral reefs, in my own country of Costa Rica and everywhere else.”

“Countries around the world look at the proposed 40% target with a sceptical eye,” said Figueres, “compared with what is feasible and what developing countries are pledging, Europe's present offer looks weak. That threatens progress in the UN climate process.” Figueres' sister is the executive secretary of the UN body that oversees that process.

Figueres accused the EU of “progress as usual” and asked “where is the ‘ambition’?”.

“European policymakers seem blinded by the theoretical importance of the trading system, which, as things stand, is not delivering. Decarbonisation is an intrinsic part of an agenda for jobs, prosperity and competitiveness, as well as a key component of energy security. Science, the economics and the people are all making the case for policymakers to lead. European politicians need to think of the next generation, rather than the next election.”

He said current targets are not enough. “European Council, it's your turn.”

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