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Günther H. OETTINGER EU Commissioner for Energy Renewable Energy 2000-2010 – Trends and Outlook for the Future Speech by Commissioner Oettinger at the 10th anniversary EREC Conference Brussels, 29 September 2010

Commission Européenne - SPEECH/10/540   29/09/2010

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SPEECH/10/540

Günther H. OETTINGER

EU Commissioner for Energy

Renewable Energy 2000-2010 – Trends and Outlook for the Future

Speech by Commissioner Oettinger at the 10th anniversary EREC Conference

Brussels, 29 September 2010

Introduction

Ladies and gentleman,

It is my pleasure to take part in this conference organised by the European Renewable Energy Council on the occasion of its 10th anniversary.

It is an opportunity to reflect on the successes and challenges of the renewable energy industry in the last 10 years. It is also an opportunity to reaffirm the actions that still need to be taken in the next 10 years, to achieve the 2020 objectives set for the energy sector.

At a time of global economic downturn, it is my belief that we all share a responsibility.

A responsibility to look to the future. This encompasses a responsibility to facilitate the provision of sustainable energy to Europe's citizens at an affordable price.

It has often been said that what we need is a new energy revolution. A revolution that will help us decarbonise our energy mix. I believe we have come a long way in the last 10 years. It is now widely accepted that renewable energy sources and technologies have to play a vital role in the process.

The industry, policy makers and citizens have all fought hard to make renewable energy a flagship policy, and we have succeeded.

We are seeing significant growth in all sectors: 61% of all new electricity generation capacity in 2009 came from renewables (mainly wind and PV). In 2008, the biofuels share of transport fuels was around 3.5%, and the renewables share in the heating and cooling sector was around 12%. As a result, the total share of renewable energy in final consumption has increased above 10% in 2008.

We still have a long way to go to reach the 20% target by 2020. But we can now say that there is a consensus inside the EU that renewable energy is key for reaching our climate and energy goals.

European renewable energy policy is now firmly established, on the basis that it contributes to European sustainability and climate change objectives, it improves the security of energy supply; and it helps develop innovative hi-tech European industries, generating new jobs and economic growth.

New ambitious and binding targets for 2020 combined with concrete legislative initiatives and strengthened support to research and development have created a new momentum in the field of renewable energy.

The EU has been the world's "prime mover" in developing renewable energy for decades; clearly we now have competition, but Danish, German and Spanish companies still dominate the industry. This is not a passing enthusiasm of Europe – we have created a solid regulatory framework to support the doubling of renewable energy in Europe by 2020.

I would not like to dwell too long on the progress made so far. We have seen impressive figures from the industry in recent years.

What is important, is that we all know that there is still a lot to do.

Instead, I would like to outline the two main issues we now have to concentrate on:

  • the importance of implementation and enforcement of the Renewable Energy Directive in all Member States; and

  • the importance of having a long-term vision beyond 2020, to 2050.

1. Implementation and enforcement

The immediate priority now is implementation and enforcement of the Renewable Energy Directive. We, in the Commission, are determined to make sure that the Directive is implemented in spirit and to the letter.

The first critical test is the submission of National Renewable Energy Action Plans. These action plans must outline precisely how Member States intend to reach their renewable energy target by 2020.

The Commission has received [21] of these plans to date and is now in the process of evaluating them.

The National Action Plans are crucial for the success of the policy not only in helping Member States provide a long-term vision for investors in renewable energy, but also in providing a Europe-wide picture of the potentials for renewable energy.

Equally important, the plans will be vital in terms of enforcing the agreed policy. I have asked my services to use all available means to ensure that all Member States make progress towards their target. For me this is a common commitment. And we all have to contribute.

Moving – and moving swiftly – to a low carbon economy will of course involve significant investments. The Commission will therefore by the end of the year, examine what actions can be taken to strengthen the financing of renewables, not only for established technologies but also for research and innovation.

The Commission aims to examine the effectiveness of current financing instruments, both European and national. This should lead to recommendations for their improvement, much as we have done in earlier reports on renewable energy national support schemes.

On national support schemes, it is clear that greater effort is needed in their management and reform. However, it is also clear that a gradual approach is needed to reform, delivered in a manner which does not undermine existing successful policies and measures.

We will therefore have to continue to examine the effectiveness of support schemes, and to explore the scope for better coordination or integration of national support schemes. This is important to make sure that the development of renewable energy occurs efficiently across the single market.

In the field of research and innovation, it is also clear that we are not investing enough. Today the total (public and corporate) spending on low carbon technologies in Europe is around 3 billion € per year. According to our estimates, this figure needs to almost triple to 8 billion € per year if we want to meet our political ambitions and if we want Europe to be competitive. I hope that the European Strategic Energy Technology Plan (SET-Plan) will allow for a much needed industry-led definition and development of technological programmes that can be best carried out at EU level.

2. A vision beyond 2020

Consolidating and implementing the new Directive and finding the right financing tools are the necessary first steps. But moving to the sustainable energy vision and placing this at the heart of energy policy requires substantial new and ambitious measures.

Renewable energy policy goes beyond 2020. That is why in our policies we are taking guidance from the 2050 Roadmap work. With the renewable energy share of electricity expected to more than double by 2020 (to over a third), can we be sure that our electricity infrastructure will support increasing renewable energy production beyond 2020?

Two issues I would like to highlight for the purpose of developing long-term thinking.

(a) First, the need for a better integrated electricity infrastructure for the connection of renewables.

The European Union has made considerable progress towards achieving a functioning internal energy market, but market failures persist in certain areas. And market integration is still hampered by the lack of interconnections, especially in Central and Eastern Europe.

Massive investment is needed in the coming years. Not all of it will be taken up by the market alone.

The Commission is going to table an Energy Infrastructure Package by the end of this year. This package will address the main shortcomings of the current TEN-E framework and existing market and regulatory failures. The Package will also cover offshore grids which are critical in terms of facilitating investments in offshore wind, and ensuring security of electricity supply throughout Europe. We will identify key regulatory issues that need to be addressed in order to enable more integrated grid solutions to be developed in the longer term.

I expect the package to be followed by a legislative proposal for a new EU Energy Security and Infrastructure Instrument in 2011, as requested by the Council in its March 2009 conclusions. In this context, it may be justified to go beyond a simple up-dating of the existing instrument and look at a more comprehensive way of addressing the challenges we face.

We must start this process of reflection together.

(b) Without 'Smart grids' the visions for a renewable energy dominated supply system will not be possible.

We know that times are changing and that there are drivers changing the traditional distribution of electricity and gas.

Smart grids will bring many benefits both for the management of the grid, and for the final small customer. It will bring a benefit for the functioning of the market, by making customer-switching easier. With time, new products which allow customers to behave rationally, for the benefit of the environment, and for their own benefit, are coming. System peaks for example could be avoided in this way, or managed much better. If the predicted electric car market penetration takes place, these could act as balancing power for example.

For this switch to lead to climate benefits, investments in smart grids must also be translated into energy savings, to allow the rational use of energy and the possibility to integrate clean distributed generation to the grid. The development of smart grids thus also calls for partnerships between governments and industry. I have asked my services to work on concrete policy options to develop smart grids, to be presented in the course of next year. We must clearly define what needs to be negotiated and what has to be left to the market to freely determine.

Lastly, let me refer to the Commission's Energy Strategy for 2011-2020 which will appear in due course. This document aims to identify all the important things that need to be done to further shape the energy market in a way that efficiency is improved, that renewables can be developed and integrated, and that the functioning of energy market is improved. I am confident this Strategy will further clarify to you the way the Commission aims to approach long-term policy considerations in the energy field.

Beyond 2020, our work on longer term plans – 2050 and the low carbon economy – are ongoing. Such a Roadmap will aim to outline scenarios for low carbon energy systems. We thank EREC for their work already on this. Before the end of the year there will be an official public consultation so that all views can be taken into account. We will be undertaking our own analysis and development of scenarios, with a view to preparing a policy document next year.

Conclusion

In conclusion, let me congratulate EREC and others in this room that have already helped put renewable energy policy at the forefront of energy policy. It is evident that we have come a long way, but it is also clear that many challenges remain. We need to develop our thinking on many issues to realise the long-term benefits of renewable energy. I trust that we can continue our excellent cooperation also to tackle these new challenges.

I look forward to a debate and to learn more about how you, the renewable energy industry, and other stakeholders think we can address the challenges that we face in the best possible way.


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