renewable in europe

E R E F European Renewable Energies Federation

Renewables in Europe: Where we are and where we are heading

Rainer Hinrichs-Rahlwes, EREF-President

Budapest – March 27, 2014 Amstad Global's Project Finance in Renewable Energy


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Federation of associations from EU Member States, working in the sector of energy produced from renewable sources

Voice of Independent Producers of Energy from Renewables

Promoting non-discriminatory access to the energy market

About EREF


Status: Today


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• Renewables are reliable technologies against Climate Change RES are (nearly) carbon free or carbon neutral

• Provide significant contribution to Security of Energy Supply Wide range of RE technologies are proven and mature A mix of different technologies and resources is available

• Renewables reduce Dependency on Energy Imports RES are domestic energy sources

• Renewables mitigate the risks of Price Volatility of Fossil Fuels RE-technologies have high cost decreases Wind, solar and geothermal energy are free

Renewable Energies are mature ...


Moving towards 2020


EU on track to 20% Renewables?

6 Source: Eurostat


RES in 2012 and 2020-targets

7 Source: Eurostat


Progress towards 2020 RES-targets

8 Source: Eurostat


2010-2011 Growth Rates vs. AAGR required to meet 2020 ambitions

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

Transport

Electricity

Heat

overall

“Current policies being insufficient

to trigger the required renewable

energy deployment in a majority

of Member States.”

(COM 2013 175 final)

“In the heating & cooling sector

in particular, it seems

significant improvements in the

policy framework are needed.”

(COM SWD 2013 102 final)


The 2030 challenge


Europe is falling back Global uptake of policies for renewables and

considerable growth outside Europe: decreasing European share in growing global market

Lack of policy certainty in Europe (policy changes in MS and ongoing uncertainty about post-2020)

Stable and reliable integrated climate and energy framework for 2030 needed – including ambitious and binding targets for GHG-emissions reduction, energy efficiency and renewable energy.

Growing the economy

Economic activity valued €137 billion

Creating Jobs

Replacing fossil fuel imports

550 Mtoe by 2030 (€350 billion)

equivalent to consumption of Belgium, Germany,

Latvia, Poland, the UK and Spain

RES technology export instead of fossil fuel imports


Growing sector and growing industry but crisis has an impact

Benefits for economy and environment but debates on cost and prices

RED: Stable framework for solid growth but policy changes, partly retrospective

Milestone 2030: the missing link but extremely unambitious CEF 2030


The Commission’s Proposal: CEF 2030

GHG-reduction-target 2030: 40% (“domestic”)

“binding” EU-RES-target: 27% - no national targets

“ambitious policies” for energy efficiency – no target

minus 600,000 jobs

minus €258/358 billion of savings from fossil fuel imports compared to RES 30/35%-target

Source: European Commission - Impact Assessment


Facts: Historic and projected growth

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

BAU Roadmap 2050 (%)

Continued 2010-2020 growth post-2020 (%)

Energy Roadmap 2050 (COM):

BAU 25% RE in 2030

Continued growth after 2020:

40% RE in 2030

Target 27% in 2030?


CEF 2030: averting investment

Maintaining investors’ uncertainty in RE and EE * no clear direction provided by GHG-target and RES EU-target only

Shifting towards “other low carbon” technologies * “flexibility for member states” leads to increasing costs (for nuclear and CCS) instead of decreasing costs (renewables and efficiency) * weakening most promising and mature GHG-reduction technologies

Labelling: BAU = ambitious: 45% - 40% - 35% - 30% - 27% * 21% “expected” in 2020 (but: national policy changes – incl. retroactive) * plus 6% in 10 years: no incentives for enabling policies

Undermining successful policies at MS-level * binding national targets needed for policy certainty and subsidiarity principle


Steering in the wrong direction

CEF 2030: 27% RES less growth fewer jobs more import spending


Curing the deficits new commitment and strong policies needed

Completing Internal Energy Market including fair access for independent and new market players

Enhancing energy infrastructure (TSO & DSO)

Convergence of national RES-support policies

Effective carbon pricing: ETS-relaunch (and tax)

Phasing-out conventional and nuclear subsidies

Developing flexibility-driven energy market design

An integrated CEF 2030 with mutually reinforcing binding and ambitious targets for GHG-reduction, Energy Efficiency and Renewable Energy EU-targets and binding national targets


Environmental and Energy Aid Guidelines (EEAG 2014-2020)

Part of State Aid Modernisation (SAM)

College Decision envisaged for April 9, 2014

Replacing Environmental State Aid Guidelines

Guidelines: Facilitating implementation of legislation

Highly problematic prescriptions for renewables support

Competitive bidding as a rule

Mandatory direct marketing (support: premium or TGC)

Exceptions for small installations (<500/1000 kW – Wind: <3/6 turbines/MW)


Impact of (draft) EEAG 2014-2020

Partly in conflict with existing legislation (RED, TFEU)

Member States’ control of targets and support schemes

Discriminating against biomass (simple exclusion from bidding)

Member States’ control of their energy mix

Imposing competitive bidding as a rule for RES-support

Exceptions only for a transition period and with clear reasons

FIT and FIP without prior bidding only exceptionally allowed

Pre-empting policy decisions yet to be taken

CEF 2030, targets and instruments subject to ongoing legislation


The future: 2050


(April 2010)

100% RES in Final Energy consumption

€ 2.7 billion cumulative investment


100% RES-E

100% RES-H&C almost 100% RES-T


High RES in EC-“Energy Roadmap 2050”

Source: European Commission, Energy Roadmap 2050, Graph: EREC


2010 2020 2030 2040 2050

Reference 18.7 33.3 40.5 40.9 40.3

CPI 19.8 34.5 43.7 47 48.8

Energy Efficiency 19.7 36.8 52.9 59.5 64.2

Diversified supply technologies 19.7 36.6 51.2 54.4 59.1

High RES 19.8 36.6 59.8 76.8 86.4

Delayed CCS 19.7 36.5 51.7 58.3 60.7

Low Nuclear 19.7 36.4 54.6 58.8 64.8

0

20

40

60

80

100

%

Share of RES-E

Dominant RE-Shares in electricity sector


Enabling Policy Measures

Supporting the transition towards a fully sustainable

renewables based energy supply in all EU policy areas

Completing the Internal Energy Market

Ambitious framework for Europe’s energy demand

Effective and full implementation of the RES-Directive

Phasing out all subsidies for fossil and nuclear energy (and

establish a meaningful carbon price – e.g. re-launching ETS)

Binding renewable energy targets for 2030 in CEF 2030


Thank you for your attention!

Rainer Hinrichs-Rahlwes - EREF-President-