Commission calls for liberalised energy market and 2030 targets for emissions reduction

 European Energy Commissioner Günther Oettinger

The European Commission has called for continent-wide 2030 goals for carbon emission reduction to be set as soon as possible in order to promote investment.

Any agreed milestones “should enable renewable energy producers to be increasingly competitive players in the (liberalised) European energy market," a statement said. The document examines four different possible scenarios.

To reach the current 2020 targets, of 20% of electricity supplied from renewable sources, Member States have rapidly to implement their national plans and double investment in renewable energy to €70bn. However, the lack of certainty on the direction of future policies beyond 2020 is perceived to be hindering this process.

The statement proposes that renewable energy such as solar and wind power should be generated wherever they are cheapest on the continent, but that no overarching European goal should be set for the amount to be generated. Instead, goals for renewable energy, energy efficiency and greenhouse gas emissions would be set at a national level. This would mean that the main instrument for cutting carbon emissions and encourage investment in renewables would be the EU Emissions Trading Scheme (ETS).

Subsidies for renewable energy would be gradually withdrawn as they become cost-competitive with other sources of electricity and heat. Support schemes should also be consistent across Europe, to avoid unnecessary barriers.

"We should continue to develop renewable energy and promote innovative solutions. We have to do it in a cost-efficient way," said Energy Commissioner Günther Oettinger.

The Commission repeated its backing for an integrated market and a pan-European grid that would connect to large solar and wind farms in Northern Africa. Morocco already has an aim of generating 40% of its electricity from solar by 2020. The Commission foresees an increased use of the cooperation mechanisms contained in the Renewable Energy Directive, which allow Member States to achieve their national binding targets by trading renewable energy between them.

Greater cooperation is particularly called for in the Mediterranean. "An integrated regional market in the Maghreb would facilitate large-scale investments in the region and enable Europe to import renewable electricity," the statement says.

Oettinger wants agreement on a new policy regime before he leaves post along with the rest of the Commission officials in 2014. “Without a suitable framework (after 2020) renewable energy growth will slump,” he warned.

Liberal Democrat MEP Graham Watson supported the call for a single, liberalised energy market and consistency across Europe. "More trading of renewable electricity within the EU is exactly what we need,” he said. “We all need to be importing and exporting our renewables. The sun is always shining and wind always blowing somewhere in Europe, and a single market for renewables will make the green energy switch work."

But he cautioned that this would not happen without investment in new high-voltage direct current grid infrastructure, and the budget for this is currently under threat. "The next EU budget is due to put €9bn towards cross-border energy links, but that money is being squeezed," he said.

The Commission's energy infrastructure package estimated that about €100bn is needed for new electricity transmission lines alone. The creation of the single market, the introduction of new technologies, market players and ancillary service providers, all depend on the construction of new infrastructure and the implementation of the smart grid.

Hans ten Berge, the secretary general of Eurelectric, the association representing Europe’s electricity industry, reacted to the statement by calling for “a level playing field for mature RES and other generation technologies", and consistent policies to be applied under the EU ETS. "With technologies like onshore wind and solar PV reaching maturity, Europe must integrate renewable energy into the market," he said.

However, many in the industry think that there should be a binding target for renewables for 2030 just as there has been for 2020, because without it there would be no guarantee of realising the aims of the overarching EU 2050 carbon reduction target of 80-95% and the EU Energy Roadmap 2050.

The Coalition of progressive European energy companies, which represents SSE, Eneco, DONG Energy, EWE, Acciona, Sorgenia, PPC, EDP Renewables and Stadtwerke, said this “is needed to bridge the policy gap between 2020 and 2050 and to allow the renewables industry to mature and to reach cost competitiveness."

"European Ministers must turn this message into action and back a renewable energy target for 2030, as supported by the Strategy's Impact Assessment", added Stephane Bourgeois, Head of Regulatory Affairs of the European Wind Energy Association (EWEA). "A legally binding renewable energy target for 2030 is crucial if we want to foster Europe's leadership in wind energy, and in particular offshore wind".

Agreement also came from Lübbeke, Senior Renewable Energy Policy Officer at the World Wildlife Fund, who argued that it would "keep Europe at the forefront of innovation, aiding economic recovery by boosting jobs and help to cut the hundreds of billions of euros Europe pays every year for important coal, oil and gas".

The Commission is to shortly produce proposals to further develop the EU's sustainability framework and the most appropriate use of bioenergy after 2020, and guidance on best practices and experience gained on support schemes to encourage greater predictability, cost-effectiveness, avoid over compensation.