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Renewable Energies

Renewable energy

"Renewable energy" (RE) refers to energy that can be derived from regenerative energy sources like wind, solar, biomass, biodegradable waste or feedstock, geothermal, wave, tidal and hydropower. Currently, the European RE sector has an annual €20 billion turnover and provides jobs to app. 300 000 people while meeting approximately 8.5% of Europe's energy needs.

Challenges

The development of renewable resources is held back by three factors. First, the external costs of energy use are not fully reflected in energy prices. Therefore, demand for RE, which on the whole has low external costs, is sub-optimal. Second, important learning curve effects which would lower prices in several technologies are exploited more slowly on account of present low levels of demand. Finally, the fragmentation of RE support systems and the existence of administrative and market barriers mean that the potential of the internal market is not fully exploited.

Roadmap

The European Council in March 2007 set a binding target of a 20% share of EU energy consumption for RE by 2020. This target offers to producers a huge opportunity to grow while cutting production costs. The lead market initiative complements other Union activities on renewable energy sources, notably the energy/greenhouse gas reduction strategy and the European Strategic Energy Technology Plan.

Documents

• Mid-term progress report of Renewable energies (published in September 2009)
• Action plan for Renewable energies

 

Mandatory national targets for 2020

The demand for renewable energy is significantly policy driven. Key legislation, in particular the climate change and energy package including the Renewable Energy Sources Directive (RES), is now in place and provides a stable policy framework within the EU and for the Member States. The RES Directive and the binding targets agreed by the Member States represent one of the strongest signals the EU has sent in terms of a regulatory framework from which a particular sector can benefit and which is aimed at driving developments within the sector. The RES Directive was adopted by the Council on 6 April 2009.

The agreed text contains the following main elements:

• Binding targets for the share of renewable energy in energy consumption in each Member State in 2020 are established; 20% share of EU consumption in that year compared to 8.5% in 2005.
• An "indicative trajectory" is laid down for progress including a 10% target for renewable energy in transport
• Accounting rules are laid down for counting renewable electricity in transport towards the 10% renewable target in the transport sector
• Member States must produce renewable energy action plans in 2010
• A system of "cooperation and flexibility mechanisms" is established, allowing one Member State to "statistically transfer" to another Member State credits for renewable energy consumed on its territory. The cooperation and flexibility mechanisms will allow Member States with higher GDP, higher targets and lower potential to buy credits from those with lower GDP, lower targets and higher potential.
• Rules are set for the import of renewable electricity from third countries. They require physical trade. EEA countries can join the system of cooperation and flexibility mechanisms (providing they adopt targets of comparable ambition).
• Member States must introduce defined improvements to the administrative procedures with which renewable energy producers must comply.
• Member States must increase the use of renewable energy in the construction, ensuring that new and refurbished public buildings fulfil "an exemplary role".
• Grid access - reinforced in relation to infrastructure development and priority/guaranteed access.
• Member States and the Commission must each report biannually on progress made. The Member State report covers the general implementation of the Directive.
• The Commission must report in 2010 on ways to improve the financing of renewable energy and the coordination of projects that involve several Member States.

A template for National Renewable Energy Action Plan has also been developed and MS have already a RES binding target. MS will have to comply with this template and submit their national action plans by 30 June 2010. National Action Plans can be of relevance for monitoring the progress of LMI on RES implementation.

More information:

Overview of all programmes and funds

The European Commission Task Force on financing low-carbon energy produced in July 2008 a compendium of all programmes and funds existing in EU which can be used to finance Renewable Energy Sources.

The Communication on financing low carbon technologies, which is foreseen late in 2009 has the following aims:

• To analyse and quantify the current investment to develop and commercialise low carbon technologies in the EU;
• To assess the investment needed in view of the new energy and policy goals, for the actions proposed in the SET-Plan;
• To propose a partnership plan on European Union level - involving industry, Member States, the financial community and the European Commission - to decrease the mismatch between current investment level and investment needed.

More information:

• The European Commission Task Force - the overview of all programmes and funds