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Renewables Need Not Cost More: EU Energy Chief

Date: 16-Dec-11
Country: BELGIUM
Author: Barbara Lewis

A shift to renewable energy would ultimately cost around the same as business as usual and the EU needs to make progress on setting a 2030 target for greener fuel soon, the bloc's energy commissioner said.

Guenther Oettinger was laying out the European Union's latest road map for mostly eliminating carbon from the fuel mix by 2050 and guiding investors beyond the Commission's existing set of energy goals.

Green politicians and environmental groups welcome the new focus on cleaner energy, but want quicker progress away from fossil fuel and nuclear power, especially after Japan's nuclear disaster earlier this year.

"It's more or less the same if we go for business as usual or for more ambitious scenarios which involve a lot of renewables," Oettinger told a news conference on Thursday.

A leaked draft last week already showed that converting to a lower-carbon economy would increase electricity prices until around 2030, because renewable energy technology requires high start-up costs. They would fall after that, because fuel sources such as sun and wind are free.

Early investment decisions to replace ageing infrastructure with more intelligent, joined-up networks across the European Union can also limit costs. "It's sensible to invest now," Oettinger said.

For every U.S. 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, according to figures from the Paris-based International Energy Agency, which the Commission quoted.

Investors need interim targets for guidance, beginning with figures and followed by binding targets.

"If we're going to end up with zero by 2050, then we must have a realistic interim (renewables) target by 2030," Oettinger said.

"It may be that in two years' time, we have to lay down figures for this, or it may be that we lay down conditions, for example CCS (carbon capture and storage).

"In 2014, we want to establish what must be achieved by 2030."

BEYOND 2020

So far, a set of 2020 targets are a major plank of the EU's energy policy, which is aimed at ensuring sustainable, secure and competitive supplies, with reduced dependence on imports from energy giants such as Russia.

The three 2020 targets are to cut carbon emissions by 20 percent, to increase the share of renewables by 20 percent and to improve efficiency by 20 percent.

Beyond the end of the decade, road maps for various sectors are designed to aid investment decisions pending the setting of new formal targets.

The overarching aim, which Oettinger said was broadly agreed, is to cut greenhouse gas emissions by 80 to 95 percent of 1990 levels by 2050.

By 2030, he said, it should be possible for 30 percent of the energy mix to come from renewables, whereas by 2050 electricity production should be almost carbon free, although transport could still have fossil fuel in the mix.

Environmentalists and Green politicians expressed concerns that the Commission continued to support fossil fuels and nuclear power, although Oettinger said the Commission was neutral on nuclear power.

"The Commission will be tempted to overplay the role of coal and nuclear energy to appease the likes of Poland and France, but the numbers in the road map are unequivocal," Greenpeace EU Energy Policy Director Frauke Thies said.

"It proves that a modern energy system can't do without renewables and efficiency but can easily consign coal and nuclear power to the past."

Poland is 90 percent reliant on coal for its electricity, and France derives roughly three quarters of its power from nuclear reactors.

Jo Leinen, the German Social Democrat chairman of the European Parliament's environment committee, dismissed the road map as "only a wishlist," which understated "the enormous potential of renewable energy and energy efficiency."

Think tank the European Climate Foundation, which has drawn up its own road map to 2030, said the Commission's outline was an important step forward.

Now the Commission needed to translate it into "meaningful policy action," Arne Mogren, a director at ECF, said.

(Editing by Anthony Barker)

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