Public funding for green energy in a context of crisis

Sara Pérez Díaz19/04/23

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Table of contents

• Introduction

• Renewable energy sources situation in

Europe

• European trade unions’ view of green energy

• Supporting schemes in RES

• Crisis and renewable energy source support

• Future expectations

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Introduction

• ETUI “Public funding for green energy in a context of crisis”

• Partners ISTAS, Spain IRES, Italy LRD, UK Wuppertal Institute, Germany Umea University, Sweden Institute for the studies of societies and knowledge,

Bulgary

• General european overview and 6 country reports

• June – December 2012

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Renewable Energy Situation

• 12.4% share renewable energy in gross final energy in 2010

• Increase of 60.2%, 1999-2009• 19.8% share in electricity consumption• Economic activity (27-EU): 127 trillon €

in 2010 Photovoltaic sector followed by wind power

and biomass Germany followed by Italy, France and

Sweden

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Employment

• 1,148,600 jobs in the 27-EU in 2010 (Eurobserv’ER) 22% increase on 2009 2011: 1.186.000 jobs. 3% increased.

• By country Germany: 361,360 jobs France: 174,735 jobs Italy: 108,150 jobs Spain: 98,300 jobs

• By technology Biomass: 273,000 jobs PV: 268,110 jobs Wind power: 253,145 jobs

• According to European Comission study: Reaching 2020 targets: 2.8 millions jobs 2030: 3.4 millions jobs

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Employment

• 2030, 45% RE in final energy: 4.4 millions jobs (according the European Renewable Energy Council)

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European Trade Unions’ view

• Ambitious climate change policies Cut emissions by 25-40% by 2020 and 80-95% by

2050 (ETUC)

• RES: independent, secure and distributed energy supply

• European energy pact with public investment European regulation should ensure RES national

targets (ETUC)

• Development of new jobs and just transition Transition must creates decent new jobs ETUC aims to develop transition programs to

anticipated changes in employment patterns

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Support schemes

• Most experience with supporting RES: electricity sector. EU Directive 2001/77/EC, required MS to

increase the share of RES

• Electricity sector: feed in-tarif, feed in-premium and quota obligations.

• Heating and cooling: investments grants, tax exemptions and obligations

• Transport: combination of obligation with tax exemption

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Support schemes

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Support schemes

• EU level: overall net support 35€ billions in 2010 2012: 42€ billions

• Expenditures for electricity are dominant: mostly paid by final consumer (all countries studied)

• 80% total energy subsidies in the EU-15 are paid to fossil fuels and nuclear energy. 19% to RES (European Enviroment Agency) OECD more than 60€ billions in 2010 only fossil

fuels.

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Support schemes

• Few countries hold a mayor part of support expenditures (Ecofys). 2009 Germany: almost 11 billions €; Italy and Spain: 5 billions € France: 3 billions € Sweden and UK: less than 2 billions €

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Crisis and RES support

• Financial new investments in RES significant lower in 2010 in Europe and North America. It’s growing in China and other emerging economies.

• Biggest reductions: European solar and US wind• Sector has generally grown during the crisis.

Growing share of RES and job creation• RES sector not very hit by economic crisis.

Except Spanish case where thousands of jobs were lost

• Lastest data after project closure may indicate that crisis consequences are still being suffered (e.g. 2011/2010 employment)

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Crisis and RES support

• 2010 and 2011 some countries modified PV feed in tariff schemes: Czech Republic, Spain, France, Italy, UK and Germany Rapid fall in cost of technology, too high retribution

• Wind energy also affected by cutbacks: UK and Spain

• Price of electricity: argument to modify and reduce economic incentives. Controversial issue.

• Many countries suffering industry destruction

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Not only economic crisis

Support schemes modifications not always as a consequence of economic crisis

• Failure of Conventions on Climate Change• Other technologies decissions.

Competitive market.Lobbies actions

• Crisis at Fukushima. Nuclear decissions Can benefit gas-fired generation more than RES

• Effect of regulatory uncertainty on investment

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Crisis and industry leading role

European Commission: Innovation Union Competitiveness report

• Europe has historically been strong in RES technologies

• Economic crisis has had a mobilisation effect on the United States and the rising Asian economies: now patents in green energy and environmental technologies are higher than EU.

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Future expectations

• Support schemes continued to be justified Abscence of internalisation of external costs Removal of all subsidies for conventional generation

• Support post-2020 Technologies close to market: operative supports Technologies in initial stage of development. R&D

support• Trade Unions organizations regards RES

sector as an economic oportunity in the context of crisis and as a source of jobs

• iea world energy outlook 2013 “New policy scenario”: Global subsidies should doubled from 2012 to 2035. 101 billion $ in 2012 / 220 billion $ in 2035

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Future expectations

• Further investment required in infrastructure, smart grids and storage: Italy and Germany

• Regulatory changes risk national RES targets.• Need to analyze the social and economic

impact on new regulatory changes• Making support schemes more market-oriented

and exposing renewables to market price signals

• No consensus level of support RES: national control or EU level benchmarks

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Future expectations

• European Comission guidance RES support schemes: Best practice Flexible support schemes (automatic reductions) Periodic review and adjustment of support levels Stable scheme financing. Avoid retroactive changes Feed in premiums preference over feed-in tariffs Simple and transparent administrative rules Transparent and non-discriminatory cost allocation

rules for grid access Towards europeanisation: common methods for

setting supports° Common cost elements and calculation methodology

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Thank you for your attention

www.istas.net/greeneconomy sperez@istas.ccoo.es