Energy

Co-operation and delivery

Marie-Donnelly2 Marie Donnelly believes that the UK and Ireland are leading the way in renewable energy co-operation. The European Commission’s Director for New and Renewable Sources of Energy took stock of Europe’s overall progress towards 2020 at the Irish Renewable Energy Summit.

Ireland’s co-operation with the UK on renewable energy is a “leap into the future above and beyond what any other member state or member states have thought about,” according to the European Commission’s lead official in renewable energy policy.

Marie Donnelly, the Commission’s Director for New and Renewable Sources of Energy, was speaking at this year’s Irish Renewable Energy Summit.

The European Commission is “here to help” but also “here to learn” as the UK and Ireland will “discover issues and find solutions” that could be transferred to other parts of the continent.

“We have embarked in Europe on a visionary journey towards 2020,” she told delegates. “We are still at the very early stages and it can go either positively or negatively in the remaining years.”

The rationale for a climate and energy package is one of the major issues being debated in the “Brussels ring” of EU institutions, in the light of the economic downturn and the euro zone crisis. Some stakeholders suggest that the strategy should be revisited and postponed until a time when more resources are available to put it into action.

Donnelly reminded delegates that competitiveness was the first reason for the strategy. “It’s all about the economy and about money going into and out of our economy,” she commented. “We import 75 per cent of our energy needs every year in the European Union and that costs us €275 billion. That’s €275 billion that leaves the European economy every year.”

In the Republic of Ireland alone, fuel imports cost €2.6 billion per year. Her colleagues in Brussels were constantly surprised by the scale of Ireland’s ambition but it reflects the country’s export-orientated economy.

Some studies suggest that for every €100 spent on importing fuel, primarily gas and oil, about €16 stays in the economy e.g. in salaries, distribution networks and taxes. When that energy is sourced and generated within a country, as much as €76 is retained in the economy.

The second reason for the package is security of supply. How to structure an energy system to ensure a steady supply of power is a technical, political and regulatory question. This was covered in last November’s communication (policy proposal) on the internal market which emphasised the importance of balancing markets.

“We need flexibility in the system and we need to value flexibility,” she added. “We need to put a money value on it.” New approaches were needed. Demand response should be taken literally and not reinterpreted as demand management.

At any point in time, the European Union is storing a six-week supply of gas and oil but it cannot store electricity. This will be a key research issue going forward as the whole European energy system is moving towards electricity.

Fair support

The Commission is also reviewing the 2009 Renewables Directive and says that the “effort has to go up” as 2020 approaches. It is convinced that the EU will achieve the 2020 target for renewables (20 per cent) but Donnelly added: “We cannot afford, at this point in time, to dismantle that framework and to fiddle with it to the point that it becomes a disincentive to investment across the European Union.”

In the last nine months, nine member states had changed their renewables support schemes “in an abrupt way and, in some instances, in a retroactive way.”

The price of technology, particularly in photovoltaic energy, has come down “dramatically” and she accepted that any support scheme for renewables “should reflect real costs”. If a government, though, has signed a contract against costs incurred by developers, it must honour that contract.

“By all means, adjust your support schemes,” she stated. “By all means, take on board the price of technologies. By all means, please dialogue with industry but don’t do it retrospectively because, to some extent, you are ‘cutting off your nose to spite your face’.”

The Commission appreciated that the subsidies were an “aberration” in the single market “but they are there because they are delivering on our political objective.” During 2013, the Commission will publish guidance on how to structure support schemes for renewable energy. This will draw on information from industry and member states, and also investors in the financial markets.

“The idea is to put a spotlight on the support schemes that operate in the European Union and bring transparency to the elements that are a constituent part of those schemes.” The document would also “lay the terrain” for any support schemes that are needed post-2020.

The Renewables Directive calls on member states to simplify their procedures in renewable energy policy. “Some member states have done this. Others have not,” she reported. “Our report will be quite pointed in terms of those member states who have not because it’s a, relatively speaking, low cost action that can be hugely beneficial to the economy in terms of the results it can produce.”

A new EU budget for 2014-2020 has been agreed by national governments in the European Council. The Commission had sought €9 billion for the Connecting Europe facility but this has now been set at €5 billion. 220 projects of common interest have already been earmarked.

The energy budget in the Horizon 2020 research programme is expected to be higher than it was in 2007-2013. The Commission wants to see a focused investment in ‘low cost, low carbon’ energy, energy efficiency and smart cities and communities.

Have your say on post-2020 energy policy

On 27 March, the European Commission adopted a green paper which set a post-2020 framework for climate and energy policies. The green paper is likely to result in one or more policy proposals by the end of the year. It covers:

• the type, nature and level of climate and energy targets

which should be set for 2030;

• how coherence between policies can be achieved;

• how energy can contribute to competitiveness; and

• how different national capacities can be taken into account.

A consultation is running until 2 July and views are welcome from all EU citizens and organisations. The full document and details on how to respond are available at ec.europa.eu/energy

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