Renewable energies: the best competitive option

By Dominique RISTORI, Director-General DG Energy, European Commission

In the context of a successful implementation of the Paris Agreement the energy transition is a clear priority. Indeed, two third of greenhouse gas emission are related to the production and use of energy.

Europe is already playing a leading role in the clean energy transition. It has managed to successfully decouple its greenhouse gas emissions from its economic growth. Between 1990 and 2016 greenhouse gas emissions in the European Union were reduced by 23% while the economy grew by 53% over the same period, showing that growth and decarboni- sation can go hand in hand.

Beyond the decarbonisation objective, the technology towards the clean energy transition represents an important economic opportunity.

It is a source of growth and jobs and it can contribute to the creation of a strong and competitive industrial basis in Europe.

In this context, renewable energies are an important driver and impressive progress has been made demonstrating European leadership in this sector and in the implementation of the Paris Agreement.

Indeed, the EU is on track to meet its 2020 energy objectives and the renewable energy sector accounts for almost 1.1 million jobs in Europe representing a turnover of over €150 billion. EU companies have a share of 30% of all patents for renewable technologies.

Renewables are also playing a growing role in the electricity sector and are now representing 30% of the electricity produced in Europe. These positive trends have been supported by the European regulatory framework as well as by rapidly decreasing costs of renewable energy technologies.

For instance, the cost of offshore wind set at €150/MWh a few years ago is now around €60/MWh in the Netherlands and in Denmark. Renewable energy projects with tenders relying only on the wholesale price and no longer on subsidies are now being developed in Europe.

This is the case for instance of a solar power plant in Ourique, Portugal. In general, the cost of solar power has decreased significantly in the recent past.

But if Europe wants to remain at the forefront of the clean energy transition and maintain its leadership further efforts are needed as other important economies are now developing at full-speed renewable energies.

For this purpose, the Commission adopted the Clean Energy for All Europeans package which is now being negotiated by the co-legislators, with the support of the Commission. This package sets Europe on the right path to modernise the energy system, decarbonise the economy and unlock the growth and jobs potential of the energy transition.

It puts in place the right regulatory framework to incentivise investments towards renewable energies and ensure their secure, competitive and cost-effective deployment and integration in the whole energy system.

Such regulatory framework will ensure reaching the at least 27% renewable energy target in the final energy consumption at EU-level by 2030, providing investors’ certainty and visibility.

It moves away from national targets and contributes to the progressive Europeanisation of renewable energy policy, thus setting the conditions for sustained investments and opportunities in bigger markets going beyond national borders.

This is also further facilitated by the proposed measures to adapt support to renewable energy, ensuring its progressive cross-border opening and putting an end to retroactive changes.

The new rules also enable consumers and renewable energy communities to produce, sell or store their own renewable electricity, allowing them to play a central role in the energy transition.

At the same time, it is important to adapt and modernise the electricity system in order to integrate in a secure and cost-effective way the growing share of variable and distributed renewable energy.

Indeed by 2030, 50% of the electricity produced in Europe will be coming from renewable energy and already today more than 90% of renewable electricity is connected to distribution grids in Europe.

Therefore, the EU proposes measures to adapt the electricity market design so that it becomes more flexible and reacts more quickly. It also facilitates the integration of digital technology to increase the intelligence of the energy system.

This package also seizes the new economic opportunities for renewable energies and ensures their deployment in sectors such as transport and heating and cooling where important potential remains untapped.

Beyond the regulatory framework, the Commission is supporting the development of renewable energies through specific instruments and initiatives.

For instance, the Clean EU Energy Islands Initiative will accelerate their deployment in Islands. Islands should become pioneers and leaders of the energy transition and not followers. This will also contribute to boost their economic activity and benefit their local population.

In addition, the Commission is strongly supporting the development of innovative renewable energy solutions such as geothermal, tidal and marine energies that contribute to the EU competitiveness and global leadership in low-carbon solutions.

The Commission is setting up a Clean Energy Industrial Forum where industry, research and innovation, social partners and consumers associations will join forces to boost the EU’s industrial basis and stimulate investment, growth and jobs in Europe.

In summary, renewable energies represent a clear and profitable economic opportunity while contributing to decarbonisation.

It is therefore key to maintain a high level of ambition during the negotiation process of the Clean Energy for All Europeans package if we want to reap all the benefits of the energy transition in terms of decarbonisation, security, competitiveness, industrial leadership and well-being for our citizens.