One for All - an energy policy for the EU
By Prof. Derek Taylor, Former Energy Advisor to the European Commission
Part 2. The Road to an Energy Union
In 2007, in response to a proposal by UK Prime
Minister Tony Blair and as agreed by the Glen Eagles European Council, the
European Commission produced an Energy and Climate Policy. This text – or
rather a series of texts – tied together for the first time the future of
energy in the European Union (EU) and the state of the climate. A vital feature
and driver of the policy was the EU’s “Kyoto commitment” to reduce its
greenhouse gas (GHG) emissions by 20%, relative to the 1990 emissions, by the
year 2020.
The energy policy was built on the three classic
pillars of security of supply,
competitiveness and sustainability. A distinguishing feature was its three
very specific targets which were central to the overall objective of the
policy. These were an increase to 20% of renewable energies, a 20% improvement
in energy efficiency and the achievement of the 20% reduction in GHG required
under the Kyoto Convention. All three targets were to be achieved by 2020.
The day after the policy was published, I made
what was probably the first public presentation of it to a large conference in
Brussels. In this I referred to the policy as the “twenty, twenty, twenty by twenty
twenty policy” (or 20,20,20 by 2020). Interestingly, I was criticised
internally in the Commission for “trivialising” the policy. However, it was
such an easy way to remember it – and taken up immediately by the Press – that
in many of its later documents, the Commission characterised the policy in
exactly the same way.
The renewable
energies (RES) target was a “win-win” target. The more RES we have, the
better our security of supply will be as it should reduce our dependency on
energy imports. It is also more sustainable with very low or zero GHG emissions.
One the other hand, the cost is generally higher than for conventional fuels
and nuclear, so does not improve our competitiveness. It was agreed – after
considerable discussion – that each Member State should have its own “binding”
target to reflect its present capacity and potential for growth. Significant
progress has been made. The share of RES in the EU’s final energy mix has risen
from 8.7% in 2005 to 15% in 2013 – so the 20% target looks achievable. Most States appear reasonably well on track –
but some, in particular the UK and the Netherlands, look to be falling well
short.
Energy
efficiency is very much a “win-win-win” situation.
If you do not have to use energy you save money and resources plus increase
your energy security. It fits well with the three pillars and is very popular
with the public and politicians, until …… you come to try to legislate it! Then
it becomes rather more difficult. We can legislate for more energy efficient
buildings but cannot force everybody to improve their home insulation. We can
legislate for more efficient energy-using products, but we cannot force people
to scrap their latest piece of equipment and replace it by a more energy
efficient (and possibly more expensive) model. Progress has been made in the EU
and some States have already reached their self-defined efficiency targets. In
spite of this, the Commission now estimates that improvements will only total
17.6% by 2020 – in spite of much lower than expected demand brought about by
the financial crisis and recession. (This possibly accounted for one-third of
the expected improvement).
The GHG
reduction is simply a “must do”. The main sources of these gases, in particular
the carbon dioxide, are fossil fuels. However, such fuels provide us with
nearly three-quarters of our total primary energy, so weaning ourselves off
them is extremely difficult. On the other hand, reducing our dependency on them
also reduces our dependency on imports and improves our security of supply.
Alternative forms of energy can be more expensive and/or less reliable. Many
difficult decisions need to be made. The main instrument designed to try and
bring about the necessary innovation and technology change in the most
economically efficient way, is the EU’s Emission
Trading System (ETS). It could take up several blogs to describe and analyse
the ETS and its costs and benefits. Here I will say that it has not yet
performed as well as it was hoped (something of an understatement), but I
believe that its presence has had some impact on our energy system and dampened
the growth of fossil fuels, in particular coal, in Europe. Whatever the reason,
the EU is well on track to achieve its 20% reduction in GHG emissions by 2020.
In 2014, the European Council agreed that energy
and climate policies remain as one of the five priority areas for the EU.
Agreement was also reached on a 2030 Framework for Climate and Energy
and on the European Energy Security Strategy. (I would note here that the
Commission has an excellent website from which all such documents can be easily
downloaded http://ec.europa.eu/.
Drawing these together and building on them, the Commission has now proposed an
Energy Union. At the core of this
will be “an ambitious climate policy”
and “secure, sustainable, competitive and
affordable energy”.
An important difference between the 2007 policy
and the new Energy Union will be the new
targets. Both renewable capacities and energy efficiency will have a target
of at least 27% by 2030. The European Parliament, in particular, would like
higher targets and they will be reviewed in 2020 “with a view to increase them
to 30%.” The Member States have also agreed to reduce the EU’s GHG emissions by
40% (relative to 1990) by 2030. This is the EU’s position in the COP21
negotiations. In fact, the sectors covered by the ETS will be required to cut
their emissions by at least 43%. As a result the ETS “emission cap” will start
to reduce at a rate of 2.2%/year after 2020 (as opposed to 1.74%/year now).
Finally, in the Roadmap to 2050, the European Council and the European Parliament
have endorsed a GHG cut of between 80% and 95% by 2050. For the industrial
sector this will require an 83% to 87% reduction. For the power sector the GHG
emission reduction will have to be between
93% and 99%. This clearly has dramatic consequences for the future of
fossil-based fuel use in Europe. For example, given the expected lifetime of a
new coal-fired power plant, who would take the decision to build one now in
Europe? The same argument will soon be applicable to gas-fired plants. They
will be driven out of our energy mix – unless they can remove their carbon
emission by using carbon capture and
storage (CCS). However, in Europe, our progress on CCS has been lamentably
slow – it could be too little and too late.
We have very good intentions – but we are still a long
way of achieving our goal of a clean, secure and affordable energy for all!
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