What is renewable energy?
Renewable sources of energy include wind power (both
onshore and offshore), solar power (thermal,
photovoltaic and concentrated), hydro-electric
power, tidal power, geothermal energy and
biomass (including biofuels and bio liquids). As
alternatives to fossil fuels, their use aims at
reducing pollution and greenhouse gas emissions.
Another role of renewable energy is the
diversification of our energy supply, with the
potential to reduce the dependence on oil and
What is our goal for the year 2020?
The Renewable Energy Directive adopted in 2009
renewable energy. The new law focuses on
achieving a 20%
share of renewable energy
in the EU overall
energy mix by 2020. Every Member State
has to reach individual targets for the overall
share of renewable energy in energy consumption.
In addition, in the transport sector, all Member
States have to reach the same target of a 10%
share of renewable energy.
Where do we stand in 2010?
According to the existing Renewable Energy
Directive, there are no
2010. However, in two previous Directives – 2001
Green Electricity Directive and the 2003
Biofuels Directive – there are laid down indicative,
non binding targets for two sectors: electricity
and transport fuel mix.
In the electricity sector, only seven out of 27
Member States expect to meet these 2010 targets.
In the transport sector, nine expect to meet
their 2010 targets. (See enclosed list for
The EU as a whole reached just over 18% for the
share of renewable energy in the electricity in
2010 rather than the target of 21%. For
transport, the EU reached 5.1% instead of 5.75%.
Will we reach our 2020 targets?
While Member States failed to reach their
indicative 2010 targets for the share of
renewable energy in the electricity and
transport sectors, the new renewable energy
Directive ensures that Member States take
remedial action: Member States National
Renewable Energy Action Plans are
required to contain all the measures effectively
designed to achieve the trajectory contained in
the Directive. In following these trajectories,
the failure to meet the 2010 targets will be
overcome and Member States can be on track to
reach their (legally binding) 2020 targets.
According to their national plans submitted in
2010, the Member
States will all meet their 2020 targets.
How much investment is needed to reach the 20%
To reach the 2020 targets, the Member States
have to implement their national action plans
and substantially increase the financing of
capital investment would need to rapidly double
to €70bn. This investment should mainly
the private sector. This could big energy
companies investing in wind or solar farms or
households investing in solar systems or other
forms of renewable.
What type of financing aid is provided by Member
A wide range of different financial instruments
are used in all Member States to help reduce
renewable energy costs. These instruments
include capital support: grants, loans and loan
guarantees, equity funds, and production aid:
feed in tariffs, premiums, quota/certificate
schemes, fiscal incentives and tenders.
What should the Member States do in terms of
The Commission recommends further reforms of
national renewable energy support schemes.
Support schemes need to ensure the
costs of renewable energy production continue to
fall but they also need to provide a stable
without any retroactive changes to discourage
Are we proposing a harmonisation?
No. We are
not proposing a harmonisation of
financing in this communication. The Commission
the coordination of renewable energy support
to use the cooperation mechanisms which are
already laid down in the 2009 Renewable Energy
Directive. For example, if a big wind park
produces in one country, another Member State
can agree to finance the park and count some of
the energy towards its own target. And if Member
States had a joint support scheme, consumers in
another country importing the electricity would
pay the feed-in tariff (or other form of
of financing, such as feed in tariffs,
will be necessary in the medium
or long term, when a truly European market is
can include greater cooperation in setting
tariffs, technology bands, tariff lifetimes etc.
It could also include completely joining the
support schemes (such as planned by Norway and
What are the cooperation mechanisms?
Cooperation mechanisms are means of allowing
Member States to benefit from a form of trade
of renewable energy whilst
still maintaining control over their national
support schemes and the achievement of their
national targets. Cooperation mechanisms include
statistical transfers, joint projects and joint
support schemes. According to their plans, Italy
and Luxembourg both expect to use these
mechanisms to help develop renewable energy in
another Member State and count it towards their
target. And nine countries (Czech Republic,
Germany, Spain, Lithuania, Hungary, Austria,
Poland, Slovenia, and Sweden) expect to exceed
their 2020 targets and could therefore have a
surplus available for transfer to another Member
State using the cooperation mechanisms
What is the advantage of a single European
energy market for renewables?
It is the economies
of scale of
the industry across the EU that will drive
production costs down and
keep the industry globally competitive, with a
huge potential for job creation. It is more
cost-effective to produce solar power where
there are more sunny days then where there are
few, the same with wind energy and windy days. Low
production costs will ultimately be reflected in
the power price, and both companies and
consumers will benefit.
What has the EU contributed so far to the sector
of renewable energy?
EU financial support given to renewables is
relatively low. For the period 2007-2009, funds
spent on renewable energy amounted to roughly
€9.8bn, (€3.26bn/a), the bulk of which in the
form of loans from the European Investment Bank.
During this period the financial support was
made up of:
€8.4bn in loans and assistance from the
European Investment Bank;
€565m from the European Economic Recovery
€110m for the "Intelligent Energy Europe"
Programme, which co-funds analysis and
policy research in renewable energy;
€499m of EU Structural and Cohesion Funds
were allocated by Member States, to projects
and demonstrations of renewable energy (with
a total of approximately €4.8 billion
planned for 2007-2013) ;
€250m from the EU R&D Framework Programme;
In addition, the EIP GIF budgeted €151M in
venture capital or loan guarantees;
Separately, the European Bank for
Reconstruction and Development granted SEI
loans of approximately €140M
What is the impact of renewable energy in the
field of job creation?
Renewable energy industries has a great
potential for creating jobs, for equipment
manufacturers, installers, technicians, builders
and engineers. The industry currently employs
over 1.5 million people and by 2020 could employ
nearly 3 million more, according to latest