Published on April 27th, 2017 | by Joshua S Hill0
Major Companies Urge EU To Adopt More Ambitious & Consistent Renewable Policies
April 27th, 2017 by Joshua S Hill
A group of fifteen major companies including Google and IKEA have joined the call urging the European Union to develop more ambitious, consistent, and cooperative policies for renewable energy, and a wish to see the region lead the way for innovation.
Fifteen separate companies were interviewed for a new report published this week by The Prince of Wale’s Corporate Leaders Group, in an effort to investigate the current effectiveness of European Union renewable energy policies, specifically those intended to encourage businesses to generate or source renewable energy, as well as how these policies could be improved moving forward. The report found that the general consensus was that inconsistent, vague, and unambitious renewable energy across the EU served only to stifle investment in renewable energy and were slowing the necessary transition to a low-carbon energy mix.
“Leading companies from across Europe are telling us that weak renewables targets hinder investment in cleaner energy, and lack of clarity at Member State level hampers decision-making,” said Jill Duggan, Director of the Corporate Leaders Group. “What the majority of these companies want is ambitious Member State targets for renewable energy to drive their investment and purchasing decisions. Those countries with the strongest targets will be the most attractive for inward investment.”
The European Commission is currently proposing a non-binding, EU-level renewable energy target of 27%, as part of the EU’s new Renewable Energy Directive, due to be agreed upon this year. The majority of companies interviewed in the Corporate Leaders Group study said that they think the EU should increase the target, and in fact “welcomed bold targets” that “are seen as a good way of delivering results in the private sector” compared to “unambitious targets” which “felt less likely to drive business investments.”
“We need stable and ambitious policies since any uncertainty can hamper or delay corporate investments,” the IKEA Group is quoted as saying in the report. “This would enable us to realise our investments faster. The EU level can play an important part in increasing the harmonisation of the policies.”
The report also determined from interviews that clear mandates for Member State commitments were vital for the overall success of the clean energy transition, as “the absence of binding targets on renewable energy devalues policy ambitions and creates an environment where investments are perceived as risky.” Additionally, a number of the interviews showed that companies doing business in Europe believe that greater consistency is needed in renewable energy policy between and within the EU Member States. The report concluded that “Europe’s Energy Union needs a common framework for cross-border co-operation that includes standard market design, templates for regional co-operation, and measures for enforcement.”
“Supporting businesses to transition to renewable energy is crucial for promoting growth and jobs in a sustainable economy,” said Nigel Stansfield, President for EMEA at Interface. “We need more consistent policy implementation across the Union, a framework for an integrated energy market, and stronger enforcement. There is a real opportunity here for the EU to show leadership and reassert the right and ambitious direction of travel.”
The fifteen companies interviewed for the report, 21st century energy: Business reflections on renewables in Europe, were ACCIONA, Anglian Water, BT, Doosan Babcock, DSM, EDF Energy, Eurelectric, GSK, Google, IKEA Group, Interface, LafargeHolcim, Philips Lighting, Sappi, and Stora Enso. Many of these companies have already made significant moves into the renewable energy sector by investing in projects, or committing to ambitious renewable energy targets. One example held up by the report is that of Finnish paper company, Stora Enso, at its Langerbrugge Mill.
“The mill produces paper products out of recycled paper, is self-sufficient in steam, produces about 75 per cent of its own electricity, and uses a biomass boiler to generate renewable energy.”
The report further found that the business case for renewable energy is not as linear as traditional business decisions. “Each of the companies interviewed had found that value comes in many guises — avoided costs, business diversification, energy bill reductions, or additional income streams, with different businesses having different experiences,” the report notes. “The premium on renewable energy costs as experienced in the past has often encouraged companies to explore much more proactive energy efficiency policies, resulting in an overall decrease in energy costs.”
“Our renewables programme is mainly driven by our sustainability commitment, however there is a financial case to be made,” Philips Lighting was quoted as saying. “At least in some cases, using renewable energy has been cheaper due to local or national schemes and incentives.”
However, the uncertain and unambitious policies, as well as the differing frameworks, standards, tariffs, subisidies, and regulations across EU countries serves to make it difficult to sell a medium- to long-term business case, especially “when companies normally operate on payback periods of three years or so.”