By Christopher Hopson in Brussels
Monday, January 06 2014
Updated: Tuesday, January 07 2014
Although few would admit to it, the EU commissioner for climate action could well turn out to be the most important person in Europe right now for the wind and solar industries.
Her flagship environmental policy – which she is fighting to get approved by the European Commission (EC) and the 28 EU states — is a new package of targets for 2030 covering climate emissions, renewables and energy efficiency.
Much is at stake. New targets would ensure long-term demand for renewables; provide certainty for investors, manufacturers and developers; focus minds on the development of smart grids and interconnectors; and reduce the long-term use of fossil fuels while providing thousands of jobs and holding onto Europe’s leadership in green energy.
But getting 28 nations to sign up to the deal is no simple task. The potential stumbling blocks are numerous — from the anti-renewables stance of coal-reliant utilities and countries such as Poland, to problems surrounding high energy prices and the EU’s struggling Emissions Trading Scheme (ETS).
“In the European Commission we are bombarded daily by those telling us why it is good enough to continue with business as usual,” Hedegaard tells Recharge. “[There are] some very strong vested interests out there who are very scared of losing their old energy monopolies.”
Hedegaard’s spirit, passion and commitment in advancing Europe’s green agenda is palpable, but some of her commission colleagues do not appear to share her enthusiasm.
Campaigners tell Recharge that EC president José Manuel Barroso met Hedegaard and energy commissioner Günther Oettinger twice recently to discuss the targets. According to leaks from the meetings, Barroso is only considering an emissions goal — a 40% reduction on 1990 levels, up from the current 20% by 2020 — but no binding targets for renewables and energy efficiency.
Oettinger, a frequent sparring partner for Hedegaard, recently said the bloc was in “wide agreement” on the 40%, but divided on the merits of a renewables target — and not even talking about an energy-efficiency goal.
“The EU’s credibility is at stake, and President Barroso’s too,” says Friends of the Earth Europe. “He rightly wants to leave a legacy as a bold climate and energy legislator, but he will not if he oversees the EU breaching its own commitment to a 2°C global temperature rise. Nor if he artificially caps investment and job creation in the renewables and energy-efficiency sectors.
“Barroso and his commission must choose how they want to be remembered.”
Hedegaard says the commission is doing lots of behind-the-scenes analysis and political work discussing how many targets there should be and the interaction between them. A White Paper on the issue — which will also cover the future structure of the ETS and renewables subsidies — will be released on 22 January. The document is due to be discussed, and potentially approved, by the EU heads of state in March.
However, Poland remains the biggest obstacle. The country, which depends upon coal for 90% of its energy, has called for the 2030 targets not to be finalised until 2015.
The UK also opposes a technology-specific target, instead calling for an ambitious 50% CO2-reduction target that would allow member states to choose the best mix of renewables, nuclear, carbon capture and storage, or energy-efficiency gains.
“We must be careful that when we construct it [the 2030 package], it does not necessarily have to be a ‘copy-paste’ of what we did up to 2020, but there must still be a strong component of both renewables and energy efficiency in European climate policies,” she insists.
Hedegaard says that part of her problem is the many myths that have grown up around renewables, which often makes negotiations difficult, particularly when she is trying to persuade fellow commissioners.
For example, an influential coalition of ten utility chief executives, calling themselves the Magritte Group, are calling for renewables subsidies to be scrapped altogether, arguing that they are pushing up power prices and distorting the market. Members include the bosses of France’s GDF Suez, Germany’s E.ON, Spain’s Iberdrola and Italy’s Enel.
“One of the myths is that clean-energy sources are expensive, despite the fact we can prove that when you have lots of renewables you actually end up with lower prices in the medium and longer term,” says Hedegaard.
“What we need is more good examples of jobs well done. We need to see more renewables companies and organisations coming forward, and being loud and clear about the real potential of these technologies. And we need that help right now.”
The ETS, which caps the amount of greenhouse gases that can be emitted by regulated installations, remains the key element of any future climate and energy package. But prices have been so low in recent years, due to a glut of allowances, that it has not been pushing anyone to reduce emissions.
In early December, the European Parliament backed plans to strengthen the troubled ETS by holding back 900 million carbon allowances. This policy, known as backloading, was expected to be agreed by the Council of Ministers at the end of last month.
Yet while allowances have been cheap, Europe’s consumers have been experiencing rising energy prices.
“During the economic crisis, particularly over the past 12 months, there has understandably been a very strong focus on Europe’s energy costs,” says Hedegaard. “So part of what we present in January will be a full analysis of those costs.
“The purpose is to try to inject some facts back into the European debate. There are so many myths out there as to why energy costs in Europe are higher than anywhere else. We need to get the facts right.
“How to have more coherent and smarter grids, and how to get interconnectors in place, are also very key questions if you want to bring down the cost of energy in Europe.”
One fact worth noting, she says, is that in “crisis year 2012”, Europe spent €545bn ($750bn) on importing fossil fuels.
“That’s a lot of money to send to Russia, Saudi Arabia and Qatar, instead of investing in our own energy activities and creating European employment.”
The commission acknowledges that there is “room for improvement” in current European support schemes. There is acceptance that too much may have been invested in technologies that don’t need it, and that there is a need to avoid overcompensation of renewables.
However, Hedegaard argues that Europe could lose out on the jobs front because renewables and energy-efficiency growth provide jobs. “The question is, how do you weigh up these two very important factors against each other?” she asks.
Around 1.2 million people were estimated to be employed in renewables in Europe in 2012. The commission believes with the right policies that could grow to 2.7 million by 2020, and up to four million by 2030.
Some sources in Brussels suggest the most likely outcome of the internal commission debate will be putting forward ambitious 2030 targets for both climate and green energy, but not to fix a similar target for energy efficiency.
While this would not be ideal, it would be good for Europe’s renewables industry, and also help negotiations towards a global climate deal in Paris in 2015.
Despite all the difficulties, one thing is certain — that Hedegaard will continue to fight hard on all fronts against some tough opponents. It is a challenge she appears to relish, and one she is convinced she can win
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