Climate and energy package: MEPs and member states must 'rework' commission's 2030 proposals

The commission's binding 2020 target for renewables proved successful, however the recent 2030 proposal is a 'disappointing lame duck', argues Frauke Thies.

By Frauke Thies

27 Jan 2014

Last week the European commission released its set of proposals for a climate and energy framework for 2030.

With a binding greenhouse gas emissions reduction target of 40 per cent and a supposedly binding EU-wide target of 27 per cent for renewable energy without the necessary breakdown into national targets, the commission's proposals fall far below the adequate level of ambition.

Despite the many voices that have called for an ambitious and meaningful renewable energy target for 2030, including eight member states, the European parliament ITRE and ENVI committees as well as numerous businesses and NGOs, the commission has decided to put forward a disappointing framework proposal.

While the binding 2020 target for renewables proved to be a success story, significantly contributing to massive costs reduction and technology leadership in Europe, the proposal for 2030 sadly is a lame duck.

27 per cent renewables by 2030 is indeed barely more than the 24.4 per cent commission's business-as-usual scenario. In addition, it is an EU-wide target without binding national breakdowns.

With such a framework in place, member states would only be asked to make commitments towards renewable energy and the final outcome would entirely depend on fluctuating national political wills.

Such a level of uncertainty is of course not enough to provide the stability and predictability any investor would need.

In order to stimulate investments in renewables and photovoltaics in particular, generating growth, jobs and a much-needed economic recovery in Europe, the European council and the parliament now need to rework the commission’s proposals.

The renewables target has to be significantly increased and it needs to come along with the necessary national breakdown to make things happen.

The European photovoltaic industry association keeps on calling for a mutually reinforcing policy framework, including a truly ambitious and binding target for renewable energy.

Together with the different renewable energy associations represented in the European renewable energy council, we are convinced that a share of 45 per cent of renewable energy sources by 2030 would be entirely feasible and appropriate.

As part of its communications on the 2030 framework, the commission also launched a report on 'energy prices and costs in Europe'. Recently, the commission presented a staff working document on 'energy economic developments in Europe'. Both documents point to some of the substantial economic benefits of renewables.

According to the commission's analysis, unlike fossil fuels, renewables help reduce wholesale electricity prices. But while large energy consumers are directly benefitting from this effect, those benefits are currently not passed onto the final consumers due to a lack of competition in retail markets, high levels of market concentration and price regulation.

The commission's analysis also shows that, for 2010, the imported fuel costs avoided thanks to renewables are higher than the subsidies renewables have received over the same period.

Finally, while support to renewables is the only type of support made visible to the consumer, previous analysis from the commission acknowledges that many tax exemptions and subsidies given to other forms of energy are not visible but still financed by taxpayers.

More transparency on the support provided to fossil fuels and nuclear would demonstrate that the European economy would benefit a lot more from further investment in ever-cheaper photovoltaics and renewables rather than importing highly volatile fossil fuels.

Therefore the low level of ambition for renewable energy in the 2030 climate and energy framework appears all the more questionable.

We now look to the council to turn the proposals into truly ambitious targets in order to provide the necessary vision for investment in ever more competitive renewable energy technologies, such as photovoltaics, and reduce Europe's dependence on expensive fossil fuel imports.

Read the most recent articles written by Frauke Thies - Europe’s power markets should adapt to new realities