A new report has concluded that the European Union needs to do much more if it is to not only meet its own energy and climate targets, but also if it intends to remain a global leader in renewables and successfully transition to a cleaner energy system.
The European Union should raise its renewable energy target to 30% by 2030, continue to reduce costs and support the integration of renewables into the energy system, further reform electricity markets, and push the electrification of heating, cooling, and transport. These are the conclusions from a new report published by trade association WindEurope, formerly the European Wind Energy Association, titled Making Transition Work, and released this week. The report outlined four separate “megatrends” that the authors felt were currently “defining the evolution of the European power system and wind markets,” including the transition from fossil fuels to renewables, abrupt and in some cases retroactive regulatory changes in energy markets altering the industry to the detriment of the wind energy industry, the growing importance of emerging and developing economies outside of Europe, and the continued falling costs of renewables.
As a result, the authors present several policy recommendations deemed necessary to ensure Europe continues to lead the global wind energy race.
“Wind energy is no longer a nice-to-have add-on in the power mix,” said Giles Dickson, CEO of WindEurope. “It’s a mainstream and essential part of electricity supply, now able to meet up to 12% of Europe’s power needs. It has also become a mature and significant industry in its own right, now providing 330,000 jobs and billions of euros of European exports.”
According to WindEurope, “a common energy strategy reflected in clear and ambitious political commitments is paramount to provide the right investment conditions.” Therefore, the European Union “should raise its ambition to at least 30% of renewables in gross final energy consumption by 2030.” Additionally, the report’s authors highlighted the importance of the revised Renewable Energy Directive and the need for appropriate legislation on energy market design — both of which are vital to the continuing development of the European wind industry.
Further, is the need for continued technological innovations — specifically, innovation to increase wind cost reductions, and to improve the management of very high shares of wind into the power system.
The authors of the report also pointed out the benefit that the electrification of other sectors — specifically heating, cooling, and transport — will have on the European market for wind energy. Specifically, according to the report, the electrification of these sectors would add new sources of demand for clean energy — estimates currently predict that up to 8% of additional power demand to 2040 could be possible worldwide.
“With all the talk about the transition to low-carbon, things should be looking good for the wind industry in Europe,” explained Dickson.
“But they’re not. Government policy on energy across Europe is less clear and ambitious than it was. Only 7 out of 28 EU Member States have targets and policies in place for renewables beyond 2020. We have dysfunctional electricity markets. The transition to auctions has been less smooth than it should have been. And we’re lacking long-term signals for investment.
“New wind installations were down 9% in the first half of 2016 year-on-year. The market for new onshore wind is increasingly concentrated in a small number of countries. Germany accounts for half of new investments even with declining numbers. France is OK for now, but the UK has put the brakes on onshore wind. Spain remains stuck in neutral. And most of Central and Eastern Europe has become a no-go zone for wind investments. It shouldn’t be like this. Energy transition means investing in new renewable power plants. Onshore wind is not just renewable, it’s the cheapest form of new power generation available today. It’s increasingly flexible. And it doesn’t take long to build.”
Many look at Europe as the traditional leader of wind energy, but the facts no longer bear this out. According to Dickson: “Europe is far from being no. 1 on renewables. China beats us on total volume and new installations, India on policy ambition, and the US in many areas of technology, especially on grid integration. We still have a competitive industry that’s winning orders overseas. But we will lose that competitiveness if we don’t have a strong domestic market.”
But WindEurope is happy to report that the outlook for offshore wind in Europe is clearer, with a total of €14 billion of new investments attracted in the first half of 2016, and the continued and rapid decline of costs.
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