Europe Faces Renewable Investment Slump

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- The European Commission (E.C.) has warned that emissions targets beyond 2020 must be set soon or Europe risks a slump in renewable energy investment.

The Commission said that Mmember Sstates within the European Union (E.U.) must shift towards a more coordinated approach in establishing and reforming the support schemes in place for renewable energy projects. It also wants to encourage more renewable energy trading among Member States.

The E.C. highlighted that investors looking to invest in renewable energy projects beyond 2020 need "regulatory certainty" and that working towards that must start soon.

"We should continue to develop renewable energy and promote innovative solutions," explained Energy Commissioner Günther Oettinger. "We have to do it in a cost-efficient way. This means: producing wind and solar power where it makes economic sense and trading it within Europe, as we do for other products and services."

The Commission is proposing to start the process on preparing future policy options and milestones for 2030 and has identified three options:

• New goals for GHG (Greenhouse gas emissions) but no goals for renewable energy. The Emissions Trading System (ETS) would be the main instrument to cut down on CO2 emissions.

• Three national targets: Renewable energy, energy efficiency and GHG.

• E.U. wide targets: Renewable energy, energy efficiency and GHG goals.

Renewable energy associations and industry groups have been quick to support the Commission's call for urgency.

Stephane Bourgeois, Head of Regulatory Affairs at the European Wind Energy Association (EWEA) said: "European Ministers must turn this message into action and back a renewable energy target for 2030, as supported by the Strategy's Impact Assessment. A legally binding renewable energy target for 2030 is crucial if we want to foster Europe's leadership in wind energy, and in particular offshore wind".

The E.U. already has binding 2020 targets and is on track to generate 20% of its energy from renewable energy sources. To get there, the European Commission has said that member states have to continue to implement their national action plans and substantially increase the financing of renewable projects. Annual capital investment would need to rapidly double to €70 billion ($87.6 billion) until 2020, with the vast majority of it coming from the private sector.

In February this year, the E.C reported that the cost of raising the current target from a 20% reduction in CO2 emissions by 2020 to 30% had fallen 'considerably' since its original report in 2008. It credited the falling price to the recession, better climate change policies and lower electricity demand. However, it stopped short of requesting that the target be raised to 30%. For related information, see February 3, 2012, article - Cost of Cutting E.U. Emissions Falls.

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