2014 will be important for European and global energy and climate policy.
In preparation for the international climate conferences 2014-15 the EU will have to define its emission targets for the next 15 years and beyond. That process has started. The Commission will present its proposals on January 22.
The targets must be ambitious.
Reducing emissions by less than 45% would be incompatible with the 2050 reduction target of at least 80% over 1990.The EU should therefore also confirm its emission targets for 2040 and 2050.
Fixing targets will not be enough: it also needs a clear view on how to achieve them.
For 2010-20 the EU has relied on three major instruments.
- Emission caps
- Energy efficiency standards for automobiles, appliances and buildings
- Renewable energy objectives
It should continue this way.
Emission caps apply to power, steel, chemical, coal, glass and cement companies.
As in the past, the power sector will have to bear the brunt: cutting its C02 emissions by 45% in the next 15 years will imply profound changes for the utility sector: the closure of more coal- fired power plants, a further switch to gas power plants and above all more imports of nuclear, gas or renewable electricity from neighbour countries. A European electricity market is overdue: There is no more need for member countries to be self-sufficient in electricity.
Steel, chemical, glass, paper and cement industries will have to undergo similar structural adjustments. These are crucial for raising energy efficiency and lowering energy imports.
Emission allowances will need to be reduced by 45% until 2030 to end the over-supply of allowances and the low CO2 prices of € three to five/ton, which have handicapped investments in energy efficiency and wind/solar power generation without exorbitant subsidies.
This will enable the emission cap & trading system play a pivotal role for reducing energy consumption and promoting the use of renewable sources.
Raising energy efficiency must remain the second pillar of the energy and climate strategy. It will help to reduce energy consumption and maintain the competitiveness of European business.
The EU should therefore continue setting energy-efficiency standards for main energy-consuming sectors and encourage more research efforts.
Trucks, electric engines, electric appliances and above buildings are the areas on which to focus the attention.
Buildings are the biggest energy consumer followed by power generation, with respectively 40 and 25% of consumption.
The EU should tighten its energy efficiency target for buildings. 3% of the building stock should undergo annual renovation. This will give a big push to employment in the building and related industries
Member states should launch programmes for improving heating installations and insulation, to be financed by a combination of private funds, bank loans and subsidies from European structural funds.
Raising the share of renewable energy must be the third axis. Without raising the share of renewable energy in energy supply it will not be possible to reduce emissions by at least 80% until 2050.
In view of the different renewable potentials of member states the EU should fix an indicative 30% share of renewables for 2030, leaving member countries to set their national targets. By 2040 most member countries should be able to supply essentially all electricity from a combination of solar, hydro, wind and geothermal power.
In parallel subsidies should be phased out. The fast technological advance and decline of costs and prices allows doing so.
During the next 15 years the efforts should focus on the inter-connections of the European grids, which are indispensable for a better capacity utilisation.
Eberhard Rhein, Brussels, 13/1/2013Author : Eberhard Rhein