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European ministers sanction strategy, but only half hearted pm target to double use of renewables

The EU energy council stopped short of giving its full support to increasing the average share of total EU renewable energy consumption from 6% to 12% by 2010. The group of energy ministers nonetheless requested the Commission "to develop a comprehensive strategy for the promotion of renewable sources" under a series of broadly agreed principles, as well as began to prepare for an action plan on energy and climate change.

An EU Commission proposal to double the share of renewable energy in the European Union by 2010 received a lukewarm response from energy ministers at a closed-door meeting in Brussels on May 27. Despite a deal of rhetoric extolling the virtues of renewables, the energy council stopped short of giving its full support to increasing their average share of total EU energy consumption from 6% to 12% within 13 years.

"Member states and the Community should formulate indicative targets as an orientation" for the share of renewables in Europe's energy mix, resolved the ministers. They described the 12% goal as "ambitious" yet it "could provide useful guidance for increased efforts at European Union as well as member state levels."

Despite this less than enthusiastic response, the energy council nonetheless requested the Commission "to develop a comprehensive strategy for the promotion of renewable sources" under a series of broadly agreed principles. It also set the wheels in motion for preparation of an action plan on energy and climate change to meet the EU's goal of a 15% cut in greenhouse gases by 2010. The plan, emphasised the council, should pave the way for removal of the direct and indirect subsidies of fossil fuel and for the introduction of taxes to encourage sustainability in energy use.

This was enough for Britain's energy minister John Battle to describe the meeting as positively inclined towards renewables and C02 emission cuts. "We agreed the paper in principle basically, but we had been discussing the gas directive for six hours by the time we got to renewable energy so it wasn't seen as the real crisis of the conversation," he said afterwards. "I thought people were reasonably upbeat about the policy. It is there as a doc to be taken much further," he added.

Fiscal instruments

The principles for the renewables strategy include "appropriate regulatory measures" at national level to encourage purchase of renewable energy; the authorisation of "investment aid" for renewables as long as the "beneficial effects of such measures to the environmentÉ outweigh the distortive effects on competition;" the harmonisation of technical standards; "adequate" support for renewables under the EU's fifth framework programme; and the continuation of national research, development and demonstration programmes.

"It is important to use economic measures and incentives and/or fiscal instruments," including taking into account the external costs to the environment of power generation, to "improve the competitive situation of renewables," states the council.

Significantly, the council resolution on a "community action plan for renewable energy sources" also acknowledges the importance of "customer choice for renewable energy" and makes reference to the concept of green pricing, stating: "as a suggestion for action in this field, energy distributors could, by means of special tariffs, give the possibility to customers to buy electricity from renewables."

The goal to double the use of renewables in Europe's energy mix was put forward by Commission staff in a Green Paper, "Energy for the future: renewable sources of energy," under preparation since last year and the subject of a European congress in Athens earlier in the month (Windpower Monthly, June 1997).

But while acknowledging that renewables "are of major importance to achieve a sustainable economic growth," and that "active government policy" is necessary to improve the competitiveness of renewables, the ministers were divided over how much to spend on the promotion of clean energy technologies.

Altener disappointment

A conservative Commission proposal for a five year extension of Altener, the EU's programme for the promotion of renewable energy, was left on the table. The Commission had proposed a budget of ECU 30 million for the first two years. But both the duration of the programme, which expires this year, and the budget allocation were questioned. Some EU ministers said Altener II should get only ECU 10 million annually for just two years.

Nevertheless, an action programme to ensure that Europe meets its target for a 15% cut in CO2 emissions by 2010 is now in the works. "It is part of the preparation for Kyoto," said Battle after the meeting, referring to climate change convention scheduled for December in Japan. But, with no ministers present from either France or Ireland, detailed discussion of targets was out of the question, he added. "But I thought the tenor of it was quite good. I was quite encouraged." At the next council meeting he expects further discussion of "not just the targets, but some of the policy objectives and how we will achieve them." The 15% cut was agreed by council in March and last month environment ministers agreed a negotiating position for Kyoto to argue for a cut of 7.5% by 2005, according to a report by ENDS Environment Daily.

Renewable energy programmes head the energy council's list of seven areas of action to meet these goals. Other areas include programmes for more use of CHP and greater energy efficiency in both generation and consumption of electricity. Two important policy measures are also listed: "progressive reduction/removal of fossil fuel and other subsidies, tax schemes and regulations which counteract an efficient use of energy; an increase of minimum tax levels as a way to reduce GHG [greenhouse gas] emissions and improve energy efficiency." The council also "welcomes the initiatives of the electricity industry" to deal with C02 emissions and stresses that utility promotion of renewables is a means to achieving greenhouse gas reductions.

Levelling the energy playing field in favour of renewables would appear to be a major policy aim. "In principle, energy pricing that better reflects cost provides both economic and environmental benefits: the phased reduction of fossil fuel subsidies and the incorporation of identifiable and measurable externalities into prices will in general be key components of the response to climate change," emphasises the council. But such changes must be made within the "investment cycles and structural changes in the economy," ruling out a fast track approach to sustainability. There is recognition, however, that "strong and structural changes in the energy economy will be required." These, as the council so rightly states, are matters "which still have to be decided upon."

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