Renewables Are Key For Carbon-Neutral Future

News Article

The European power industry remains fully committed to the development of renewable energy to 2020 and beyond. In a response to a European Commission consultation on the EU's post-2020 renewable energy strategy, EURELECTRIC this week reiterated its commitment to the development of renewable energy sources (RES) as a central means of achieving a carbon-neutral power supply in Europe by 2050 and of diversifying power generation sources. Indeed, RES continue to represent a key investment opportunity for the power sector.

Yet in these troubled economic times, any RES strategy must strive for cost-efficiency, the response paper warns. Cost-effectiveness should thus be at the heart of the EU's post-2020 RES strategy. It can best be delivered through consistent, European and market-based approaches to RES development. Integrating renewables into the internal energy market is therefore one of Europe's most urgent challenges. Direct subsidies distort the market and are not the only way to support and secure investments - other means to be considered range from risk-sharing facilities (lending) to supporting research, development and demonstration (RD&D).

The paper suggests increasing cost-effectiveness by converging towards European-wide market-based support mechanisms that expose RES generators to market prices and incentivise them to progressively enter into the market on a level playing field with all other generators. Indeed, with several RES technologies well on their way to competitiveness, such progressive market integration should be possible from 2020 onwards. The EU Emissions Trading Scheme (EU ETS) should then become the main driver for the deployment of low-carbon generation, including renewables, and specific RES support should be phased out.

To propel low-carbon technologies towards competitiveness, policymakers should also focus more strongly on innovation and on RD&D. Public support after 2020 should be primarily oriented towards high-potential low-carbon technologies that have not reached market competitiveness by then.

While developing a strategy for the 2050 time horizon, EURELECTRIC's response also urges policymakers to not lose sight of the more immediate future up to 2020. Key actions to keep RES growth on track to meeting the 2020 target include:

  • achieving a well-functioning and integrated European energy market, which will help drive successful growth in renewable energy;
  • providing stability for investors by avoiding retroactive changes to support schemes;
  • removing obstacles to investments in RES and grid infrastructure, in particular addressing the lack of interconnections within Europe;
  • making full use of cooperation mechanisms as laid out in the RES directive; and
  • stressing cost efficiency, in the interest of consumers.