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Renewable energy post-2020 – plan for growth - 08/06/2012

Road through fields with wind turbines in background © Mandel

Growth in the renewables market will slump unless the EU takes more measures now to reduce costs and stimulate investment. The Commission is presenting ways on how this can be done.

The EU is on track to achieve its goal of drawing 20% of its energy from renewable sources by 2020, as part of its wider strategy for tackling climate change.

That’s good news. More energy from wind, solar, hydro-electric and tidal, geothermal and biomass sources makes the EU less dependent on imported energy, as well as boosting innovation and employment.

However, industry is cautious about investing more in renewable energy. They are uncertain about future EU policy, and costs are not falling fast enough.

As a result, if the price of renewable energy remains much higher than the cost of fossil fuels, growth in the market is expected to decline after 2020.

To address these needs, a Commission report on renewable energy looks at ways to bring costs down through a more coordinated EU approach. It also begins the process of developing EU policy for beyond 2020.

Costs can be driven down by stimulating more competition in the EU energy market. Subsidies for fossil fuels should be phased out and energy taxes revised to boost investment in low-carbon technologies. At the same time, support for renewables should be gradually reduced or eliminated, to incentivise this sector to become competitive in the long term with other energy sources.

National support programmes should also be reformed to promote cost reductions. They should be made more consistent across the EU and simplified, reducing administrative costs for the industry.

The EU should encourage the production of wind and solar power where it is cheaper, as companies do for other products and services. EU countries can then buy wind or solar energy from another EU country or from outside the EU more cheaply than by developing their own renewable sources.

Next steps

The Commission is starting the process of developing policy options for beyond 2020 that promote more innovation and bring down costs. Developing a policy now will encourage industry to make the kind of long-term investment needed to develop renewable sources.

Last year the EU published its low-carbon roadmap covering all sections of the economy. It is also producing specific plans to cover individual economic sectors, such as its energy roadmap 2050 .

More on EU renewable energy

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