Following intense negotiations the European Union has announced a series of climate-based goals for the whole Union as part of the new EU framework on climate and energy for 2030.
Announced on Wednesday, the new framework includes a reduction in greenhouse gas emissions of 40% below 1990 levels, a Union-wide binding target for renewable energy of at least 27%, renewed ambitions for energy efficiency policies, a new governance system, and a set of new indicators to ensure a competitive and secure energy system.
“Climate action is central for the future of our planet, while a truly European energy policy is key for our competitiveness,” said European Commission President José Manuel Barroso. “Today’s package proves that tackling the two issues simultaneously is not contradictory, but mutually reinforcing.”
“It is in the EU’s interest to build a job-rich economy that is less dependent on imported energy through increased efficiency and greater reliance on domestically produced clean energy,” continued Barroso.
“An ambitious 40% greenhouse reduction target for 2030 is the most cost-effective milestone in our path towards a low-carbon economy. And the renewables target of at least 27% is an important signal: to give stability to investors, boost green jobs and support our security of supply.”
While the 27% is a step in the right direction, some critics are suggesting that it doesn’t go far enough, specifically in regards to the lack of nationally binding targets.
“While it is pleasing to see the EU Commission recognise that renewable energy is a key part of future energy solutions across Europe, the lack of ambition in not ensuring there are national binding targets for renewable energy is a disappointment,” said RenewableUK Chief Executive Maria McCaffery.
”This is a missed opportunity for member states to take collective and serious action on the drive for clean, sustainable, renewable energy, which is the best option for reducing our carbon emissions.”
The United Kingdom was one of the loudest voices during negotiations, calling for at least a 40% cut in greenhouse gas emissions, and RenewableUK hope that the UK will similarly lead the way with binding renewable energy targets.
“The Commission has gone out of its way to point out that member states are still free to set their own nationally binding renewable energy targets, so it is not too late for the UK Government to take leadership on this issue,” said McCaffery. “To meet the binding Greenhouse Gas targets and also the UK Government’s stated aim of tackling climate change, we need to keep investing in the world beating renewable sources we have, which can also bring thousands of jobs and help our energy security.”
The 2030 framework will be supported by a detail analysis on energy prices and costs, which assess the key drivers and compares prices across the European Union with those of its main trading partners.
Joshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium. I love words with a passion, both creating them and reading them.
The European Union could cut its carbon emissions by as much as 40% (against 1990 levels) by the year 2030 using nothing but “low-cost” measures, according to a new study from the Potsdam Institute for Climate Impact Research.
The study — undertaken with the aid of 11 other notable research groups — makes it clear that significant cuts can be made to the EU’s greenhouse gas emissions, even relatively rapidly, while having only very negligible negative effects (if any) with regard to the economy. To be precise, the study predicts that such cuts “would be likely to cost less than an additional 0.7% of economic activity.”
The findings were released today ahead of the announcement next week of the European Commission’s proposals for a new set of climate targets and policies to replace the current targets for 2020s. According to various reports, key figures within Brussels still remain divided on the level of emission reduction targets that should be adopted for 2030, with speculation mounting that the bloc could opt for a weaker than expected target of 35 percent. Moreover, it remains uncertain as to whether or not member states will opt to extend current targets for the use of renewable energy and energy efficiency measures through to 2030 or back UK calls for such technology-specific targets to be shelved. The new report argues that more ambitious emissions targets of up to 40 percent can be met using existing and cost-effective technologies.
“In the next two decades, it is possible to achieve the transformation using existing technologies,” stated lead researcher Brigitte Knopf of the Potsdam Institute for Climate Impact Research. Who also noted that “the modelling showed that after 2030 new technologies would be required to deliver the deep 80 percent emission cuts the bloc has pledged to provide by 2050.”
Continuing along that line of reasoning, Knopf argued that aggressive new targets and policies are a necessity — both with regard to achieving cuts now, and also with regard to spurring the development of “innovative new technologies”.
“A clear price signal has to be set today, for instance in the European Emissions Trading System,” she said. “It would provide an incentive for innovation that would prevent energy systems from being locked into long-lasting investments in CO2-intensive technologies, such as coal-fired power plants.”
Interestingly, the modeling from the new study also suggests that there are a number of quite different options available to policymakers for achieving the goal of a 40% cut by 2030 — anything from ramping up the deployment of renewable energy technologies, to improving energy efficiency, to building more nuclear power plants, etc.
Nathan For the fate of the sons of men and the fate of beasts is the same; as one dies, so dies the other. They all have the same breath, and man has no advantage over the beasts; for all is vanity. – Ecclesiastes 3:19
Behind the heated debate in Brussels about climate and renewable energy targets, what is really happening is that concern over high energy prices has taken precedence over climate concerns in Europe. Competitiveness has caught up with climate policy. Indeed, the two issues have become so intertwined that when the European Commission will present its new climate and energy policy on 22 January, it will at the same time launch a new industrial policy. Similarly, EU leaders, who were to meet twice in February and March to discuss energy prices and climate policy separately, have merged these meetings into a single summit to address both issues at the same time. Our correspondent Sonja van Renssen digs behind the climate and energy headlines.
EU climate commissioner Connie Hedegaard and energy commissioner Günther Oettinger still don’t agree on what greenhouse gas emission reduction target the EU should adopt for 2030. Hedegaard wants 40%, Oettinger 35%.
This is the news that emerged from a deadlocked meeting within the Commission on 10 January that was supposed to agree the 2030 proposals internally.
Many believe that 40% will prevail. If it does, it is also the only target the Commission is likely to propose: forget a new renewables target – if there is one at all it will be non-binding and less than 30%, which, according to the Commission’s own new 2013 reference scenario, published over Christmas, is really nothing more than business as usual.
A new energy efficiency target long ago disappeared from the Commission’s agenda.
Thus, the famous 20-20-20 targets for 2020 will not get a proud sequel for 2030. This despite the European Parliament’s vote on 9 January in favour of three binding targets for greenhouse gas emissions (40%), renewables (30%) and energy efficiency (40%). Despite the fact that on 23 December, Ministers from Germany, France, Italy, Austria, Belgium, Denmark, Ireland and Portugal sent the two Commissioners a letter urging them to retain a renewable energy target in addition to a reduction target. Despite the letter by Germany, the UK, France and Italy last week urging a 40% climate target. Despite also pressure from the renewable energy sector and parts of industry to maintain an ambitious climate and renewable policy.
The truth is that at this moment many member states and industry fear that a strong climate and energy policy will be bad for their economies.
If in an interview with Energy Post last December, Hedegaard still insisted three binding targets were needed, today she is fighting to defend her 40% emission reduction target. The Commission’s 2050 low-carbon roadmap says this equates to the most cost-effective path to an 80-95% emission reduction in 2050. In contrast, 35% is only just above business-as-usual – a 32% decrease in emissions in 2030 – according to the Commission’s new 2013 reference scenario. The debate within the Commission is over an un-ambitious vs. very un-ambitious climate and package that ignores the findings of its own impact assessment, critics say.
D-Day for climate policy
The critics have a point. The truth is that at this moment many member states and industry fear that a strong climate and energy policy will be bad for their economies. Relatively high energy prices in Europe compared to the US which benefits from its shale gas boom plus the economic recession have forced their way into the heart of the 2030 climate and energy debate. Consider that EU leaders were due to meet twice early this year: in February, to discuss energy prices and competitiveness, and in March, to discuss climate policy. The two have now been merged into a single summit on 20-21 March in line with EU policymakers’ wish “to be coherent”, according to a Commission source. In addition, it now appears that on 22 January – long pencilled into energy journalists’ diaries as D-Day for the 2030 climate and energy package – the European Commission will also launch a new industrial policy for Europe. Indeed, it may launch the two with a single press conference!
Although policymakers recognise that competitiveness is not determined by climate policy alone, the fear is that EU climate and energy policy may be the straw that breaks the camel’s back. European industries have been claiming this for some time. Several of them were prioritised by the Commission for a “fitness check” or “cumulative cost assessment” to work out how much EU climate policy is actually costing them. The results are gloomy: EU climate and energy policies have raised the cost of producing a tonne of aluminum by as much as 11% (€228), reported the Centre for European Policy Studies (CEPS) last autumn. Just before Christmas, it announced that European steel companies pay twice as much for electricity and four times as much for gas as their US counterparts.
Energy prices report
These sector-specific conclusions appear to be borne out by a leaked draft of a report on energy prices seen by Energy Post. This paper is also due from the Commission on 22 January. Bearing in mind that the draft appears an early version, it nonetheless suggests that the findings for steel are on average true for all industrial and retail consumers in Europe. From 2005-12, European industrial consumers faced real price rises of 40% for electricity and 30-35% for gas, even as prices went down in the US and grew more slowly in other parts of the world.
EU climate policy has been an easy scapegoat.
But the report also points out that these are average figures that hide an extremely diverse picture across Europe. According to the report, prices in different European countries can vary by a factor of 3-4. In 2012, industrial electricity prices were below the weighted EU average in 18 member states, comparable to prices in Turkey, Mexico, Brazil and China. In Romania, electricity prices have actually decreased since 2007. In Germany, energy-intensive industries are exempted from carbon and renewable levies plus grid access fees; similar exemptions exist for industries in other countries.
Felix Matthes the Öko-Institut recently argued that German industry pays about the same for electricity as in the US. In the aluminum sector, about a third of all plants still buy electricity through long-term contracts, which mean they have seen just one-tenth of the cost increase of plants exposed to market prices. (Though many of these are due to terminate soon and may not be renewable under EU competition law.) Finally, despite the clear price difference with the US, there is no sign of EU industry doing less well on EU and US markets, concludes the prices report.
Yet energy is getting more expensive in Europe compared to the rest of the world and this threatens at least some industries. The question is what to do about it? EU climate policy has been an easy scapegoat, with much mudslinging at the EU Emission Trading Scheme (ETS), which makes industry pay for its carbon emissions. But the Commission has so far found no evidence of “carbon leakage”, i.e. industry leaving Europe for regions with looser carbon constraints. Yes, some industries are looking elsewhere, but this is “driven mainly by global demand developments, and input price differences”, according to yet another report from the Commission. And yes, says this report, energy prices are going up, but carbon costs are not a major factor. (This may also be because of the leakage protection measure – extra free allowances – in place so far).
The Institutional Investors Group on Climate Change (IIGCC), which manages €7.5 trillion in assets, wrote to European Commission president Jose Manuel Barroso on 9 January: “As shareowners in energy intensive companies, we have discussed with them the competitiveness risks of the EU ETS for their European operations and they have reported that this is not an issue.”
Instead, the biggest problem is the commodity price of fuel. The draft energy prices report shows that this typically makes up the bulk of energy prices, followed by taxes and network charges. The gas price is something policymakers can partly do something about, for example by working to complete the single European energy market. What they can do much more about however, is taxes. The share of tax in the total energy price for industrial consumers can be high in Europe, while in the US, China, and India there is no taxation on natural gas and electricity for industry. Moreover, the tax component increased by more than any other in recent years, says the Commission in its prices report. But taxes are primarily a national, not European, competence.
Untangling the causes of high energy prices does not answer the question of how to deal with them, however. Interestingly, in its draft prices report, the Commission suggests that European energy-intensive industry has been able to hold its own so far in part because it has decreased its energy intensity (defined by the Commission as the amount of energy consumed to produce a unit of value-added of one million Euros). In contrast, US industry has started consuming more with the arrival of cheap shale gas. It also says Europe has been helped by restructuring away from energy-intensive sectors, although it maintains an overall share of manufacturing in value added above that of the US.
It is alarming that industries that depend on energy efficiency legislation are apparently leaving Europe.
“In many cases decreasing energy intensity could mitigate the impact of increasing energy prices,” the Commission suggests. This suggests that a strong policy push for efficiency makes competitive sense. Greater efficiency and technological innovation are essential to a healthy European industry. The European paper industry, represented by CEPI, has become one of the first to embrace this with an innovation competition last year.
Viewed in this light, it is alarming that industries that depend on energy efficiency legislation are apparently leaving Europe. “If words were action in the field of energy efficiency, then I would be opening new factories in Europe but as they are not we have just closed a factory in Italy and are planning to open three new plants in the US, Asia and Turkey,” wrote the CEO of Knauf Insulation, Tony Robson, to Barroso on 9 January.
Competitiveness is also about preventing low-carbon leakage. It is also about maintaining an expanding cleantech industry. Policymakers cannot ignore high energy prices and the risk of carbon leakage of course, but a failure to maintain a strong climate, renewable energy and energy efficiency policy may not be the right remedy. It may hurt Europe’s growing green sector while doing little to reduce energy prices for industry.
A small town in Austria that had no significant industry or trade business is now thriving thanks to local renewable resources. Güssing, (population: 4,000) sits in eastern Austria. In 1988, the entire region with a population of 27,000, was one of the poorest districts in the country. It relied on agriculture, there was no transportation infrastructure, unemployment was high, and 70 percent of those who did have work were commuting to Vienna, 100 miles away. The town, where two-thirds of the working population was out of work and young people were moving away, was referred to as a dying town. Due to a lack of connections to the railway network and to the Austrian Autobahn (freeway) system, energy costs were extremely high. At the time the town of Güssing was said to be hardly able to afford its $8.1 million annual fossil fuel bill.
Several of the town leaders realized that $8 million dollars going to pay for fuel oil (mostly for heating) and other fossil fuels (such as coal for electricity) from outside the region could stay in the local economy if they could produce their own energy. However, they realized if they wanted to be energy self-sufficient the first step was reducing energy use. In 1990, the town implemented an energy efficiency program, retrofitting all public buildings with new insulation and replacing all streetlights with energy-efficient bulbs, reducing energy expenditure in buildings in the town center by almost 50 percent.
With greatly improved efficiency, the town then adopted a policy calling for the complete elimination of the use of fossil fuels in all public buildings, in an attempt to keep more money in the local economy.
HEATING WITH LOCAL RESOURCES
There is not a lot of wind in Güssing, but biomass is abundant—the town is surrounded by 133 hectares (328 acres) of forest. Some local residents, realizing that wood in the forest was decomposing and not being used, started to run a district heating station for six homes. With the success of that project, more small district heating systems were built. The mayor, who was looking for a way to revitalize the town, took notice. In 1996, the heating system was expanded to the whole town and was also generating electricity, all from renewable raw materials gathered from within a five-kilometer radius through sustainable forestry practices.
Then, in 2001, with the help of the federal government, Güssing installed a biomass gasification plant, that runs off of wood chips from wood thinned from the forest and waste wood from a wooden flooring company. This was the first utility-scale power plant of its kind in the world. The plant uses steam to separate carbon and hydrogen, then recombines the molecules to make a form of natural gas which fuels the city’s power plant. It produces on average 2 megawatts of electricity and 4.5 megawatts of heat, more than enough energy for the town’s needs, while only consuming one-third of the biomass that grows every year. The town also has a plant that converts rapeseed to biodiesel, which is carried by all the fueling stations in the district.
BECOMING A MODEL COMMUNITY
In 2007 the New York Times reported Güssing was the first community in the European Union to cut carbon emissions by more than 90 percent, helping it attract a steady stream of scientists, politicians, and eco-tourists. One year later, Güssing built a research institute focusing on thermal and biological gasification and production of second-generation fuels. That same year a solar manufacturer started producing PV modules in Güssing, producing 850 megawatts of modules a year and employing 140 people. Several other photovoltaic and solar thermal companies have relocated to Güssing, installing new demonstration facilities in the district.
The little town has become a net energy producer—generating more energy from renewables than it uses. Altogether, there are more than 30 power plants using renewable energy technologies within 10 kilometers of the village. Now the goal is to take the lessons from the small town of Güssing and make the entire 27,000-person district an energy-self-sufficient net producer.
Currently around 400 people come to Güssing each week to visit the numerous demonstration plants.
Even Austria’s favorite celebrity, former California governor, and renewable energy advocate Arnold Schwarzenegger visited Güssing in 2012. “Güssing has become a green island,” he said when he spoke at the Güssing renewable energy demonstration plant. “You have built your own district heating [system]. You are generating your own electricity. You are operating a biomass power plant, produce synthetic natural gas from wood and develop new fuels at the research lab. I have seen all of this with my own eyes. Everyone should follow your example. The whole world should become Güssing.”
The town now has 60 new companies, 1,500 new jobs, and annual revenues of $17 million due to energy sales, all resulting from the growth of the renewable energy sector. The downtown has been rebuilt and young people now picture themselves staying there in the future. And other areas are following Güssing’s lead. More than 15 regions in Austria are now energy independent with regard to electricity, heating, and/or transportation. The town of Güssing has shown that not only is a high-renewables future possible, but also economically advantageous.
Schwarzenegger must agree, because when he left he said, “I’ll be back.”
Top image courtesy of Shutterstock. Second Image courtesy of Güssing Renewable Energy.
Rocky Mountain Institute Since 1982, Rocky Mountain Institute has advanced market-based solutions that transform global energy use to create a clean, prosperous and secure future. An independent, nonprofit think-and-do tank, RMI engages with businesses, communities and institutions to accelerate and scale replicable solutions that drive the cost-effective shift from fossil fuels to efficiency and renewables. Please visit http://www.rmi.org for more information.
Given our company’s inclination to make insightful energy usage comparisons, we’d love to be able to present a side-by-side comparison of total energy waste in the US and UK. Unfortunately, each country takes a distinct methodological approach to evaluating economy-wide energy efficiency – making it unfeasible to do a clean apples-to-apples comparison (see Author’s Note).
But, based on our knowledge of the energy economy in the US and UK, and equipped with their recently published Energy Flowcharts for 2012, we can still draw some meaningful conclusions:
In 2012, the US’s primary energy demand was 11 times bigger than the UK’s
Why does the average American consume twice as much energy as the average Brit?
The answer is multifaceted and complex, but we can begin to identify a few key drivers.
First, consider transportation — the largest energy end-use in both countries. The average fuel economy of UK cars is currently 65% better than US cars. Americans also drive almost twice as many miles per year than Brits. More gasoline per mile, combined with lots of miles, is the perfect recipe for a bloated energy flowchart.
Second, compare a typical home near London, England with one in New London, Connecticut. You’ll see some clear energy-related differences: the UK home will neither have an air-conditioner nor a swimming pool (both are exceedingly rare there, largely due to a milder climate); they’re also far more likely to be hang-drying their laundry. These kinds of factors add up.
Third, UK energy efficiency policies have become increasingly ambitious. Last November, the UK Government unveiled a national Energy Efficiency Strategy, that included a £39 million investment in research on how to empower consumers and businesses to adopt more energy-efficient behaviour over time. And starting soon, the UK will join other European countries in a regional effort to reduce energy use by 20% by 2020.
While the US has also made strides in boosting energy efficiency in recent years, especially at the state level and through innovative utility programs, the UK’s concerted nationwide initiatives to cut energy use have positioned the country as a leader…as evidenced by its #1 ranking in ACEEE’s 2012 International Energy Efficiency Scorecard. And these efforts are borne out by the 2012 data: as shown below, the UK’s weather-adjusted primary energy consumption inched downward for its 7th straight year.
For its part, the US has also seen a general downward trend in total and per-capita energy use in recent years, but it hasn’t trickled down quite as consistently as in the UK.
There are many interesting insights to be drawn from recent energy trends in the States and the Kingdom — including how the Super Bowl and the birth of little Prince George exerted a surprisingly similar effect on national energy use. To dive deeper into the data from both sides of the pond, check out the 2013 Digest of UK Energy Statistics and the most recent US Energy Flowchart Analysis from Lawrence Livermore National Laboratory.
Author’s note: The UK’s Energy Flow analysis is constructed on a “primary fuel input basis,” which differs slightly from the “useful energy basis” adopted by the US version. Interested readers can read more details about the UK’s flowchart calculations here and US calculations here.