Action plans could be blown off-target

The green energy lobby says that the EU is on course to meet its targets. But delays in modernising the grid could hamper progress.

As the price of carbon is currently low and shows no sign of rising in the near future, legislation is the principal influence driving investment in green energy. In particular, it is the EU’s renewable energy directive that will determine whether Europe meets its goal of generating 20% of its energy from renewable sources by 2020. 

Meeting that target hinges on the National Renewable Energy Action Plans that each EU member state must present to show how it intends to meet its legally binding target. By mid-October, 23 action plans had reached the European Commission, with only those from Belgium, Estonia, Hungary and Poland still to come.

The plans submitted so far suggest that, at least on paper, Europe is set to exceed its 20% renewables target by close to 1%. Only two member states, Italy and Luxembourg, predict that they will need imports to meet their targets. Eight say they will hit it exactly, while 13 expect to exceed theirs; a few, including Spain, Greece and Bulgaria, expect to outperform their targets by as much as 2%-3%.

Representatives of the renewables industry believe this positive picture is credible, both in terms of targets and the prospects for individual technologies.

Jacopo Moccia from the European Wind Energy Association says the 23 submitted plans add up to 201 gigawatts (GW) of wind power in 2020, close to the industry’s expectation of 214 GW.

It is a pleasing picture for the industry. But will it happen? The development of the renewable-energy industry today continues to be hindered by outdated grids, delays to planning permission and insufficient funding. It is not clear how quickly these problems can be resolved.

Plans for new grid interconnections are a prominent feature of the action plans and some – such as Malta’s – are contingent on them. The country needs an offshore wind farm to meet its renewables target of 10.2% for 2020, but that presupposes a viable interconnector to Sicily to handle the turbines’ peak-time input.

Potential renewables exports from Spain, Portugal and Ireland also require new interconnectors. Whether these are built as planned depends, above all, on overcoming often deep-seated local opposition, which manifests itself in long delays to the granting of planning permission.

Not all action plans that identify this problem propose a solution. Italy, for example, notes it has a 180-day deadline to agree authorisation for a renewables project, which in practice can turn into four to five years. It offers no remedy.

France risks lengthening its 16-month authorisation period for transmission projects by deciding to give local mayors a say without requiring them to justify their decisions.

Financial woes

The economic crisis also continues to affect a sector heavily dependent on fresh investment. In the UK, for example, a scarcity of pre-construction finance is hindering efforts to build new offshore wind capacity. Developers say they need up to £10 billion (€11.2bn) a year.

Energy experts in the Netherlands say looming excess coal and gas capacity will discourage utilities from investing in renewables, as they would simply be reducing the value of their existing assets.

Moreover, the action plans assume a leverage effect from big efficiency gains, in line with the EU’s non-binding target for a 20% energy-efficiency improvement by 2020. But the EU is set to miss this target.

“The renewable energy industry did its job in the past, but the problem lies with a lack of ambition from the member states to reduce energy demand,” says Lucie Tesnière, a policy adviser at the European Renewable Energy Council. A faster-than-expected recovery from the current economic crisis could exacerbate the problem.

“The plans must be taken with a caveat – they will evolve, a lot,” says Moccia. “The targets in 2018-19 will be quite different to today.” That is why the renewables directive will be evaluated every two years, he adds.

The plans look good on paper, but they have yet to prove their feasibility.

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Sonja van Renssen is a freelance journalist based in Brussels.