Now is the time for the EU to be ambitious

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Ilaria Valtimora
January 8, 2018
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Now is the time for the EU to be ambitious

It is nine years since the European Parliament mandated that at least 20% of energy used in the European Union must come from renewables by 2020. At the time, this seemed an ambitious goal, particularly without binding targets for individual nations.

Binding national targets would be helpful, of course. But, even without them, a report from the European Commission in February 2017 said the EU is on track to hit 20%.

We aren’t as confident. The report shows that the proportion of renewables in the EU energy mix grew from 12.4% in 2009 to around 16% now. Good progress, but it suggests hitting 20% by 2020 is only a possibility, not a foregone conclusion. We’ll see.

Either way, 2020 is near and it’s time for the EU to be ambitious again. In November 2016, the European Commission published a revised Renewable Energy Directive to ensure a target of at least 27% by 2030, which the EU energy council supported last month.

But is it enough? We think the council could have been bolder, given that the falling cost of wind and solar makes both more attractive – and we aren’t alone. Ahead of the meeting, the EU came under pressure from over 50 corporates including Amazon and Ikea to back a 35% target. This followed the proposal of a 35% target by the European Parliament in November.

And industry association WindEurope’s chief executive Giles Dickson says the target set by the energy council is “deeply disappointing from an economic perspective”. He argues that the difference between a 27% and a 35% target is €92bn in investments not made and 132,000 jobs not created.

Finally, Europe’s climate commissioner Miguel Arias Canete told ministers during the negotiations the level of ambition was “clearly insufficient”. He said the falling prices for renewables meant the EU could reach a target of 30% of renewables with similar costs as had been previously estimated for the 27%.

The 27% also gives less incentive for the best-performing nations to keep pushing on renewables. The latest Renewable Energy Progress Report published by the European Commission in December, which covers the period from 2004 to 2015, shows that 11 states achieved their 2020’s renewables target five years early.

Ten out of 28 member states are already near or exceeding the 27% target, and five – Austria, Denmark, Finland, Latvia and Sweden – were over 30% in 2015. Plenty of these countries will continue pushing on renewables regardless of the EU targets – these aren't everything, after all! – but it does mean there would be less incentive for them to do more, and that is only likely to curtail the amount of investment in wind in the next few years.

And the worst performers will likely continue as slowly as ever.

This sounds like we are being pessimistic for the sake of it. We’re not, and we think there is good news in the council’s plans. The 28 member states have agreed to give three years’ visibility on volume and budget of public support schemes for renewables.

They have also agreed on the need to cut barriers to corporate power purchase agreements. This gives energy producers and buyers the clarity they need.

But, with more action on renewables in countries including the US, China and India, we think the EU could do more. A higher target could help the EU really stand out.

It is nine years since the European Parliament mandated that at least 20% of energy used in the European Union must come from renewables by 2020. At the time, this seemed an ambitious goal, particularly without binding targets for individual nations.

Binding national targets would be helpful, of course. But, even without them, a report from the European Commission in February 2017 said the EU is on track to hit 20%.

We aren’t as confident. The report shows that the proportion of renewables in the EU energy mix grew from 12.4% in 2009 to around 16% now. Good progress, but it suggests hitting 20% by 2020 is only a possibility, not a foregone conclusion. We’ll see.

Either way, 2020 is near and it’s time for the EU to be ambitious again. In November 2016, the European Commission published a revised Renewable Energy Directive to ensure a target of at least 27% by 2030, which the EU energy council supported last month.

But is it enough? We think the council could have been bolder, given that the falling cost of wind and solar makes both more attractive – and we aren’t alone. Ahead of the meeting, the EU came under pressure from over 50 corporates including Amazon and Ikea to back a 35% target. This followed the proposal of a 35% target by the European Parliament in November.

And industry association WindEurope’s chief executive Giles Dickson says the target set by the energy council is “deeply disappointing from an economic perspective”. He argues that the difference between a 27% and a 35% target is €92bn in investments not made and 132,000 jobs not created.

Finally, Europe’s climate commissioner Miguel Arias Canete told ministers during the negotiations the level of ambition was “clearly insufficient”. He said the falling prices for renewables meant the EU could reach a target of 30% of renewables with similar costs as had been previously estimated for the 27%.

The 27% also gives less incentive for the best-performing nations to keep pushing on renewables. The latest Renewable Energy Progress Report published by the European Commission in December, which covers the period from 2004 to 2015, shows that 11 states achieved their 2020’s renewables target five years early.

Ten out of 28 member states are already near or exceeding the 27% target, and five – Austria, Denmark, Finland, Latvia and Sweden – were over 30% in 2015. Plenty of these countries will continue pushing on renewables regardless of the EU targets – these aren't everything, after all! – but it does mean there would be less incentive for them to do more, and that is only likely to curtail the amount of investment in wind in the next few years.

And the worst performers will likely continue as slowly as ever.

This sounds like we are being pessimistic for the sake of it. We’re not, and we think there is good news in the council’s plans. The 28 member states have agreed to give three years’ visibility on volume and budget of public support schemes for renewables.

They have also agreed on the need to cut barriers to corporate power purchase agreements. This gives energy producers and buyers the clarity they need.

But, with more action on renewables in countries including the US, China and India, we think the EU could do more. A higher target could help the EU really stand out.

It is nine years since the European Parliament mandated that at least 20% of energy used in the European Union must come from renewables by 2020. At the time, this seemed an ambitious goal, particularly without binding targets for individual nations.

Binding national targets would be helpful, of course. But, even without them, a report from the European Commission in February 2017 said the EU is on track to hit 20%.

We aren’t as confident. The report shows that the proportion of renewables in the EU energy mix grew from 12.4% in 2009 to around 16% now. Good progress, but it suggests hitting 20% by 2020 is only a possibility, not a foregone conclusion. We’ll see.

Either way, 2020 is near and it’s time for the EU to be ambitious again. In November 2016, the European Commission published a revised Renewable Energy Directive to ensure a target of at least 27% by 2030, which the EU energy council supported last month.

But is it enough? We think the council could have been bolder, given that the falling cost of wind and solar makes both more attractive – and we aren’t alone. Ahead of the meeting, the EU came under pressure from over 50 corporates including Amazon and Ikea to back a 35% target. This followed the proposal of a 35% target by the European Parliament in November.

And industry association WindEurope’s chief executive Giles Dickson says the target set by the energy council is “deeply disappointing from an economic perspective”. He argues that the difference between a 27% and a 35% target is €92bn in investments not made and 132,000 jobs not created.

Finally, Europe’s climate commissioner Miguel Arias Canete told ministers during the negotiations the level of ambition was “clearly insufficient”. He said the falling prices for renewables meant the EU could reach a target of 30% of renewables with similar costs as had been previously estimated for the 27%.

The 27% also gives less incentive for the best-performing nations to keep pushing on renewables. The latest Renewable Energy Progress Report published by the European Commission in December, which covers the period from 2004 to 2015, shows that 11 states achieved their 2020’s renewables target five years early.

Ten out of 28 member states are already near or exceeding the 27% target, and five – Austria, Denmark, Finland, Latvia and Sweden – were over 30% in 2015. Plenty of these countries will continue pushing on renewables regardless of the EU targets – these aren't everything, after all! – but it does mean there would be less incentive for them to do more, and that is only likely to curtail the amount of investment in wind in the next few years.

And the worst performers will likely continue as slowly as ever.

This sounds like we are being pessimistic for the sake of it. We’re not, and we think there is good news in the council’s plans. The 28 member states have agreed to give three years’ visibility on volume and budget of public support schemes for renewables.

They have also agreed on the need to cut barriers to corporate power purchase agreements. This gives energy producers and buyers the clarity they need.

But, with more action on renewables in countries including the US, China and India, we think the EU could do more. A higher target could help the EU really stand out.

It is nine years since the European Parliament mandated that at least 20% of energy used in the European Union must come from renewables by 2020. At the time, this seemed an ambitious goal, particularly without binding targets for individual nations.

Binding national targets would be helpful, of course. But, even without them, a report from the European Commission in February 2017 said the EU is on track to hit 20%.

We aren’t as confident. The report shows that the proportion of renewables in the EU energy mix grew from 12.4% in 2009 to around 16% now. Good progress, but it suggests hitting 20% by 2020 is only a possibility, not a foregone conclusion. We’ll see.

Either way, 2020 is near and it’s time for the EU to be ambitious again. In November 2016, the European Commission published a revised Renewable Energy Directive to ensure a target of at least 27% by 2030, which the EU energy council supported last month.

But is it enough? We think the council could have been bolder, given that the falling cost of wind and solar makes both more attractive – and we aren’t alone. Ahead of the meeting, the EU came under pressure from over 50 corporates including Amazon and Ikea to back a 35% target. This followed the proposal of a 35% target by the European Parliament in November.

And industry association WindEurope’s chief executive Giles Dickson says the target set by the energy council is “deeply disappointing from an economic perspective”. He argues that the difference between a 27% and a 35% target is €92bn in investments not made and 132,000 jobs not created.

Finally, Europe’s climate commissioner Miguel Arias Canete told ministers during the negotiations the level of ambition was “clearly insufficient”. He said the falling prices for renewables meant the EU could reach a target of 30% of renewables with similar costs as had been previously estimated for the 27%.

The 27% also gives less incentive for the best-performing nations to keep pushing on renewables. The latest Renewable Energy Progress Report published by the European Commission in December, which covers the period from 2004 to 2015, shows that 11 states achieved their 2020’s renewables target five years early.

Ten out of 28 member states are already near or exceeding the 27% target, and five – Austria, Denmark, Finland, Latvia and Sweden – were over 30% in 2015. Plenty of these countries will continue pushing on renewables regardless of the EU targets – these aren't everything, after all! – but it does mean there would be less incentive for them to do more, and that is only likely to curtail the amount of investment in wind in the next few years.

And the worst performers will likely continue as slowly as ever.

This sounds like we are being pessimistic for the sake of it. We’re not, and we think there is good news in the council’s plans. The 28 member states have agreed to give three years’ visibility on volume and budget of public support schemes for renewables.

They have also agreed on the need to cut barriers to corporate power purchase agreements. This gives energy producers and buyers the clarity they need.

But, with more action on renewables in countries including the US, China and India, we think the EU could do more. A higher target could help the EU really stand out.

It is nine years since the European Parliament mandated that at least 20% of energy used in the European Union must come from renewables by 2020. At the time, this seemed an ambitious goal, particularly without binding targets for individual nations.

Binding national targets would be helpful, of course. But, even without them, a report from the European Commission in February 2017 said the EU is on track to hit 20%.

We aren’t as confident. The report shows that the proportion of renewables in the EU energy mix grew from 12.4% in 2009 to around 16% now. Good progress, but it suggests hitting 20% by 2020 is only a possibility, not a foregone conclusion. We’ll see.

Either way, 2020 is near and it’s time for the EU to be ambitious again. In November 2016, the European Commission published a revised Renewable Energy Directive to ensure a target of at least 27% by 2030, which the EU energy council supported last month.

But is it enough? We think the council could have been bolder, given that the falling cost of wind and solar makes both more attractive – and we aren’t alone. Ahead of the meeting, the EU came under pressure from over 50 corporates including Amazon and Ikea to back a 35% target. This followed the proposal of a 35% target by the European Parliament in November.

And industry association WindEurope’s chief executive Giles Dickson says the target set by the energy council is “deeply disappointing from an economic perspective”. He argues that the difference between a 27% and a 35% target is €92bn in investments not made and 132,000 jobs not created.

Finally, Europe’s climate commissioner Miguel Arias Canete told ministers during the negotiations the level of ambition was “clearly insufficient”. He said the falling prices for renewables meant the EU could reach a target of 30% of renewables with similar costs as had been previously estimated for the 27%.

The 27% also gives less incentive for the best-performing nations to keep pushing on renewables. The latest Renewable Energy Progress Report published by the European Commission in December, which covers the period from 2004 to 2015, shows that 11 states achieved their 2020’s renewables target five years early.

Ten out of 28 member states are already near or exceeding the 27% target, and five – Austria, Denmark, Finland, Latvia and Sweden – were over 30% in 2015. Plenty of these countries will continue pushing on renewables regardless of the EU targets – these aren't everything, after all! – but it does mean there would be less incentive for them to do more, and that is only likely to curtail the amount of investment in wind in the next few years.

And the worst performers will likely continue as slowly as ever.

This sounds like we are being pessimistic for the sake of it. We’re not, and we think there is good news in the council’s plans. The 28 member states have agreed to give three years’ visibility on volume and budget of public support schemes for renewables.

They have also agreed on the need to cut barriers to corporate power purchase agreements. This gives energy producers and buyers the clarity they need.

But, with more action on renewables in countries including the US, China and India, we think the EU could do more. A higher target could help the EU really stand out.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.