By D.A. Barber
Despite the sluggish global economy and the European debt crisis, there have been questions as to whether Europe will remain dedicated to renewable energy. But recent re-enforcement to policy changes in the region point to a solid commitment.
The European Union currently has a target of getting 20 percent of its energy from renewable sources and several EU member nations have already surpassed their needed targets. Some estimates indicate it’s likely that the entire region will move past the goal well ahead of schedule and that renewable electricity sources will meet 34 percent of demand in Europe by 2020, most of it from solar. Even with a few EU countries pulling back on government support in 2011, PV accounted for 26.7 percent of capacity additions and concentrating solar power increased 1.1 percent. 2011 was also a huge year for new investment in clean energy, increasing 5 percent to $260 billion with investment in solar surging 35 percent to $136.6 billion, according to a Bloomberg New Energy Finance report, Global Trends in Renewable Energy Investment 2011, released in January 2012. That’s a 5 percent increase over 2010 levels and almost five times the 2004 total.
EU Solar Growth
While much of Europe’s solar energy growth is in EU members countries where it would be expected, smaller regions are also moving ahead. A January 2012 report from the European Photovoltaic Industry Association (EPIA) found that Europe's 2011 PV market did show some slowing in the flagship countries but there is potential growth in some smaller regions for 2012 and beyond. Germany,the biggest PV market both in Europe and globally, is expected to continue to grow in terms of PV installations in the near future, but the smaller markets in Central and Eastern Europe are growing rapidly due to government support. For example, Ukraine plans to generate 30 percent of its energy from renewable sources by 2015, triple the level in 2010. New investors, such as the Austrian firm Activ Solar, are being drawn to Ukraine due in part to state support of clean energy development. Other regions with small but growing PV capacities include Austria (100MW) and Bulgaria (80MW).
(Source: EPIA)
New grid-connected PV capacity worldwide in 2011 rose by 67 percent to nearly 28GW, with 21GW of that in Europe with 60 percent in Italy and Germany alone, according to EPIA. Much of this new grid-connected PV in 2011 was due in part to regional policy adjustments and looming deadlines for feed-in tariffs (FiTs).
(Source: EPIA)
The February 2012figures from the European Wind Energy Association (EWEA) paint the same picture of growth in 2011, with wind and solar alone representing almost 70 percent of new capacity - a 10-fold increase over deployment in 2000. In total, EWEA says over 30GW of the 44GW of new power capacity came from wind and solar - a 37.7 percent increase over 2010 – with PV, accounting for 21 GW (46.7 percent) of new capacity.
Source: EWEA
EU’s Renewable Energy Directive
In January 2007, the European Commission published a Renewable Energy Roadmap outlining a long-term strategy that called for a mandatory target of a 20 percent share of renewable energies in the EU's energy mix by 2020. EU adopted the Directive in April 2009, which set individual targets for each member state.Later in March 2010, the “Europe 2020” strategy incorporated climate control goals to the binding EU-wide target of 20 percent renewable energy by 2020. It also improves the legal framework for promoting renewable electricity and requires national action plans for the development of renewable energy sources.
A recent report by the JRC did a technical assessment of the individual National Renewable Energy Action Plans (NREAPs) submitted to the European Commission and found that EU member states plan to reach an overall share of 20.7 percent of energy from renewable sources by 2020. The JRC assessment concludes that almost half the EU states are planning to exceed their own targets and will actually be able to provide surplus energy for other member states.
Energy Roadmap to 2050
In December 2011,the EU's energy commissioner called for renewable energy targets to be renegotiated in the next two years that go beyond 2020 to help businesses plan ahead. Günther Oettinger made the plea at the launch of the EU's Energy Roadmap to 2050, which details plans for the EU to virtually “de-carbonize” its energy infrastructure by mid century.Oettinger wants mandatory renewable energy targets for 2030 to be in place by 2014 and noted it should be possible for 30 percent of the EU’s energy mix to come from renewables.
Oettinger argues that a quicker shift to renewable energy would ultimately cost around the same as “business as usual” even with the high start-up costs. This is because even though converting to a lower-carbon economy would increase electricity prices until around 2030, prices would then fall because the fuel sources from sun and wind are free. The Energy Commission quoted figures from the Paris-based International Energy Agency, which suggests that for every U.S. dollar of investment not made in the power sector before 2020, an extra $4.3 will be needed afterwards to compensate for increased emissions.
Germany’s Renewable Energy Policies
Germany, currently the world's strongest PV market, added 3GW in December 2011 as developers raced to meet a year-end deadline for claiming generous subsidies. That brought the annual total to about 7.5GW and stabilized the price of many components that fell in 2011, according to Bloomberg. German Environment Minister Norbert Roettgen said on January 19, 2012, that he plans to reduce aid for solar each month instead of the current twice-yearly cuts because installations have exceeded government targets. That decision is expected to support demand during the first months of 2012 as investors push to grid-connect before this new plan is introduced.
Germany's Kreditanstalt fur Wiederaufbau (German Development Bank) announced in October 2011 that is was committing to underwrite renewable energy investments with $137.3 billion over the next five years. The government's 6th Energy Research Program has already made $274.6 billion available for energy storage research over the next three years and financed 40 percent of all PV installations in Germany in 2011.
As the world's fourth-largest economy and Europe's biggest, part of Germany’s renewable energy advances come as the country surges forward to wean itself off of nuclear energy, a source of about 28 percent of the country's electricity. German Chancellor Angela Merkel announced on May 30, 2011, that Germany would close all of its 17 nuclear power plants between 2015 and 2022 in favor of renewable sources. Germany now produces 20 percent of its electricity from renewable energy sources - up from 6 percent in 2000 - and Germany's solar facilities have already surpassed hydropower in the country's total energy mix. It is estimated that renewable energy in Germany will increase to 35 percent by 2020 and 80 percent by 2050, putting the country closer to becoming the first to rely entirely on renewable energy.
EU Smart Grid Policies
An EU mandate to have smart meters installed in 80 percent of European households by 2020, and 100 percent by 2022, has caused utilities – particularly in the U.K., France and Spain – to aggressively push plans to meet the goal. In fact, some individual countries have set their own even higher targets. Italy was the first EU country to embrace the smart grid technology and Sweden made the technology mandatory in 2009. But some countries, such as Germany and The Netherlands, are resisting smart meter technology due to privacy concerns.
Nevertheless, some of the more ambitious forecasts for just how many smart meters will be installed beyond the 7.6 million connected in 2010 range from 100 million by 2016, to 106 million by 2020.
In October 2011, the European Commission unveiled a multi-billion dollar plan to modernize and extend Europe’s energy infrastructure and eliminate delays in authorization for new European power lines. The money will be made available under the proposed EU budget for 2014 - 2020 and be awarded to projects that span at least two EU countries. That same month, IBM joined an EU-funded consortium to help develop a smart grid that uses at least 50 percent renewable energy sources and allow smart devices to use renewable electricity based on near real-time pricing and availability.
Beyond 2020
The 2020 binding targets are a major plank of the EU's energy policy and the 2050 Roadmap announced in December 2011 claims that for those countries upgrading their energy infrastructure over the next decade, "early investments cost less." It also notes that the cost of the transition can be minimized by realizing economies of scale and developing an EU-wide energy network by expanding their “smart grid” quickly.
Utilities in Europe during 2012 will need to adjust for the impact of a slow economy and adapt to tougher rules on emissions to meet these goals. The key issue, according to the Bloomberg report, is whether EU governments will keep up their investor-friendly commitments to clean energy policy and incentives.
In February 2012, during the third Solar Thermal Electricity Industry Forum in Cologne, Germany, the European Solar Thermal Electricity Association (ESTELA) called on Spain to halt its moratorium on feed-in tariffs for renewable energies due to concerns as to what the consequences could be with regard to European companies competing worldwide. ESTELA called on Spain to resume renewable energy FiTs as soon as possible and encouraged it to regulate the next deployment of CSP plants in Spain until 2020.
The 2020 targets have been working to varying degrees in the different EU member states. The main issue the EU is now dealing with is “what happens in 2021?” This is prompting the EU to push forward on targets for 2030 and beyond to 2050 to further stabilize investor confidence.