Energy efficiency and renewable targets key to a cost-effective EU 2030 framework

Lack of 'binding targets' in commission proposal is 'perplexing', according to Fiona Hall.

By Fiona Hall MEP

18 Feb 2014

An early agreement on an EU 2030 energy and climate framework is needed in order to seize opportunities for green growth and lead global efforts to combat climate change. 

The European parliament's report adopted by a clear majority on 5 February is therefore timely and welcome. The report calls for three binding targets for 2030, on greenhouse gas (GHG) emissions, renewables and energy efficiency which represents the most cost-effective approach, according to the European commission's own impact assessment.  

Energy efficiency is key for economic efficiency and therefore competitiveness. Recent analysis by the Fraunhofer institute shows that it would be cost-effective for the EU to reduce its energy use by as much as 40 per cent by 2030.

That is why MEPs support a 40 per cent energy efficiency target. Interestingly, most of the potential for energy reduction lies in sectors outside of the EU emissions trading system (ETS), such as buildings and transport.

First, this means that a single GHG target delivered mainly through the ETS would fail to reap much of the savings potential. Second, it implies that concentrating on energy saving, and hence GHG reduction, from non-ETS sectors would significantly ease the decarbonisation effort needed elsewhere, for example from energy-intensive industry. 

It was disappointing that nothing concrete on energy efficiency appeared in the recently published commission white paper. It is to be hoped that an ambitious 2030 target, in line with the parliament's report, will be proposed by the commission after the summer.

[pullquote]Renewable energy sources represent the biggest indigenous resource that Europe has and this resource is crucial for future EU energy security[/pullquote]. The EU spends €406bn, more than the total GDP of Poland, on energy imports.

While some countries pin their hopes on the shale gas bubble, delaying the necessary transition away from fossil fuels, and others commit to more expensive new nuclear plants. The renewables sector in Europe has quietly continued to grow and has created indigenous jobs throughout the recession.

The cost of renewables has already come down substantially, and the industry itself expects that onshore wind and photovoltaics will be competitive with conventional energy sources by 2020.

In some member states, this rapid fall in the cost of renewables has not been accompanied by corresponding reductions in national support schemes, a failing that the commission will seek to address in the forthcoming revision of state aid guidelines.

Lessons have been learnt about how best to support new technologies. But the biggest lesson to learn from the 2020 framework is that the approach laid down in the renewable energy directive has worked.

It has been the principal reason for the sector's six per cent annual growth rate and has given investors the confidence to lend to the sector at a competitive rate.

The commission proposal to discontinue the current approach is perplexing, not least because there is no clear process for reaching the EU-wide target. 28 isolated national energy plans will not produce the most cost-effective development of renewable energy across Europe.

Negotiations on the 2030 climate and energy framework are still in the early stages. member states will consider their position at the March council meeting.

With at least eight countries, including big-hitters Germany, France and Italy, already signed up to a three target approach, let us hope that the parliament's line will now gain wider approval.

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