“Subsidies to renewables are the most transparent and visible”

» By | Published 02 May 2014 |

By Zoë Casey

From direct government support to tax breaks and the cost of negative externalities like pollution, subsidies to the power sector take many different – and often hidden – forms. In fact, the exact definition of a subsidy was the crux of an at times heated debate “subsidies to the power sector: Europe’s best kept secret?” hosted by the European Wind Energy Association (EWEA) in Brussels, with over 100 attendees.

Subsidies to renewable energy are the most transparent and visible in the energy sector, they are directly in an EU Member State’s budget, explained Tom Howes, from the European Commission’s DG for Energy. “Being so transparent they are the first to attract the eye so there is an unfair treatment in their visibility,” Howes told the audience on 29 April.

Ronald Steenblik from the Organisation for Economic Co-operation and Development (OECD) said that subsidies are extremely difficult to measure. “Is government inaction a subsidy?” he questioned, adding that the OECD does not include inaction such as the failure to tax externalities like pollution in its definition.

For Thomas Becker, CEO of EWEA, “a subsidy is always an act of political will. There’s nothing wrong with them, but transparency is key,” he said. Meanwhile, Brian Ricketts, Secretary General of EURACOAL said “obligations on consumers to purchase an amount of green energy sound like a subsidy to me.”

Howes said that the European Commission has just launched a study which will investigate direct and indirect subsidies and the cost of externalities in the power sector – which should be finished in six months. “It’s a pretty good secret what subsidies are,” he said, adding that the Commission has encountered difficulties in obtaining figures. “There are many different reasons why different groups are unwilling to reveal costs and subsidies. We couldn’t get some fuel price data on imports, it’s labelled as confidential,” he said adding that data on exemptions is also patchy.

Meanwhile, “nobody could find anything on nuclear,” Howes said. “Many people do not have an interest in exposing figures,” Becker added. “There’s a whole lot of other market failures to bring to the table. It’s very messy. We need data and to explain the relationships,” Howes said.

For Beate Raabe, Secretary General of Eurogas, there aren’t any direct subsidies to the gas sector in Europe and one of the solutions to the problem of including pollution externalities in the power market lies in the Emissions Trading System (ETS) – the EU mechanism for putting a price on carbon emissions. However, “the ETS is not working very well at the moment, we need to make that work. We need to define these externalities and be very transparent about it,” Raabe said.

Ricketts called for market-based solutions. “Renewables have disrupted the market – a consequence of having subsidies – we need a level playing field,” he said. Becker countered with: “it’s a question of pricing our behaviour. Do you think coal should pick up the bill for the health and pollution costs of its production?”

“Coal should not have to pick up the pollution bill because the sector we depend on will crumble,” Ricketts said citing consumer’s willingness to buy cheap goods from China, a coal-based economy.

The well-attended debate threw up many pertinent questions – what exactly is a subsidy? How do we count the cost of indirect subsidies like pollution costs? Do subsidies distort the market and can we fix everything with the Emissions Trading System? And, for wind power, when can it stand on its own two feet without subsidies?

“The fossil fuel industry is trying to frame renewables as an industry that can only survive with subsidies. Yet fossil fuels historically and currently have many more subsidies. Wind can be without subsidies when all other industries do not get subsidies,” Becker said.

Speakers agreed that the Commission’s forthcoming study should shed more light onto the subsidy debate. “Hopefully this time we will have a better set of data and a better story to tell,” said Howes.

The debate “subsidies to the power sector: Europe’s best kept secret?” took place at the EWEA’s office in Brussels on 29 April. See the debate in full.

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France: wind energy solution in energy transition

» By | Published 25 Apr 2014 |

France may be the world’s most nuclear energy dependent country, but times are changing. When French President François Hollande took the reins of power in 2012 he pledged to reduce the country’s nuclear dependency from 75% to 50% by 2025.

Today, France has a goal of reaching 19 GW of wind energy by 2020, up from its current level of 8.2 GW, according to the European Wind Energy Association’s (EWEA) latest statistics. This will significantly raise the percentage of wind powered electricity in the country from the 3% wind covers today. And, according to a very recent survey, the French are behind this transition.

Some 64% of French people see wind energy as a solution, among others, in the context of the energy transition, says a CSA survey published in March 2014. Moreover, 80% of the 1010 respondents consider it necessary to invest in wind without waiting for the traditional power plants to reach the end of their lifecycle.

65% of those surveyed said that they would invest in renewable energy (wind and solar/photovoltaic) today if they had to personally invest in one energy source, while 15% chose nuclear, 7% chose gas and 1% chose coal. Meanwhile, 69% of French people would choose wind energy if they had to choose one energy type to be constructed in their region. 75% chose solar, 21% chose nuclear, 16% chose gas and 4% chose gas.

In short, the results show that the French are aware that an energy transition must take place, they are confident enough in renewables to invest if they could, and they know that the time to act is now. Next year is a key year for energy decision-makers in France since both the UN summit on climate change will take place in Paris, and, just two weeks before, EWEA will host is internationally-renowned annual event EWEA 2015 from 17-20 November in the same city. The event is set to be a platform for the wind energy industry to make its climate-friendly technology solutions known to global leaders at the UN summit.

France’s opinions on wind power sit well with Europe-wide opinion polls on wind energy, as detailed by EWEA. EWEA believes that wind energy delivers a multitude of benefits to communities from sustainable jobs and economic revival, to fighting climate change and bolstering energy security. On a local level, renting out land for wind farms can provide income, and taxes from a wind energy business can be used by the local community to improve infrastructure and services – all of which contribute to the public’s strong perception of wind power.

The results in France echo other public opinion surveys in the country: In 2011 an ADEME opinion poll found that 80% of French people back the installation of wind turbines. In 2013 an IPSOS survey found that wind power had a good image for 83% of the population. The same survey found that 80% of interviewees would welcome wind turbines in their region (départment) while 68% would welcome turbines in their local area (commune). And, according to France Energie Eolienne, public opinion becomes more favourable the closer the respondent lives to a wind farm.

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EWEA 2014: the event round-up

» By | Published 13 Mar 2014 |

Opening Session at EWEA 2014New markets, technological breakthroughs and an end to political uncertainty – that’s just three of the advances the wind energy sector is expecting in the coming years, revealed industry leaders at the EWEA 2014 Annual Event in Barcelona.

“We will see advanced technology that is subsidy free,” said Anne McEntee, Vice President of Renewables at GE.

With high attendance levels and a buzzing exhibition hall, the overall vibe at EWEA 2014 was certainly positive. However, speakers did note that important challenges remain: securing 2030 renewable energy targets, cutting costs – in particular offshore, and building better electricity grids.

Andrew Garrard, EWEA President, warned that the current crisis in Crimea shows how dependent Europe is on fossil fuel imports. “The situation in Crimea is a wake-up call for all of us…it demonstrates the vulnerability of our fossil fuel supply”, he said. An ambitious 2030 renewable energy target would boost Europe’s renewables fleet and, in turn, energy security since President Putin cannot turn off the wind. Every EU citizen pays €2 a day for fossil fuel imports – or a total of €1 billion every day, he told the audience at EWEA 2014.

With over 150 companies and associations signing the “2030 declaration” – which calls on EU leaders to agree to ambitious and binding renewable energy targets at national level – the industry united at EWEA 2014 to ask EU leaders to make the decisions that will bring supply security to Europe.

“An ambitious target, binding on Member States, is the most cost efficient way to realise our goal of 100% renewables in the long term. Not to mention boosting a sector which provides 250,000 people with work in Europe”, said EWEA 2014 conference chair and managing director of ENERCON, Hans-Dieter Kettwig.

For those seeking inspiration, the conference did not disappoint. Brazil, Mexico and South Africa triumphed as new markets brimming with wind energy opportunity. Ten leading CEOs revealed their company’s strategies for survival, attendees heard that Google is looking to make more investments in wind, and Maria van der Hoeven, Chief Executive of the International Energy Agency, talked on the IEA’s support for 2030 renewable energy targets.

Meanwhile, EWEA released new material detailing the costs of fossil fuel imports to Europe, the IEA got frank about the effects of fossil fuel subsidies, and a separate EWEA report delved into a less publicised field – the massive consumption of water in the fossil-fuelled power sector.

The event in Barcelona has now drawn to a close, but attendees full of new information, contacts and partnerships will certainly be looking forward to EWEA 2015 in Paris 17 – 20 November.

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Wind energy is a “massive new paradigm of employment”

» By | Published 11 Mar 2014 |

Eddie O’Connor panel discussion

Wind energy can create hundreds of jobs as part of a new climate change-aware world, said Eddie O’Connor, founder and CEO of Mainstream Renewables. O’Connor described this point in time as a “massive opportunity to go entirely renewable.”

He was referring to today’s threat of rising sea levels which could swamp many of the world’s major cities – a consequence of climate change in turn fuelled by carbon emissions. The fact remains that we are emitting the equivalent of “four Hiroshima bombs into the atmosphere every second of every minute of every day,” he said at EWEA 2014 in Barcelona.

And, if we ignore the threat of climate change, “how do we actually get the money to pay for the consequences?” he asked. If we don’t pay attention to climate change, we might not have a species, he warned.

By 2050, 90% of the EU’s electricity can be powered by renewables, O’Connor said. Meanwhile, for Paolo Frankl, head of renewable energy division at the International Energy Agency (IEA), a level of 58% renewables by 2030, rising to 70% by 2050 is attainable.

But to reach these levels “we need a robust CO2 price, a price that has a meaning”, greater flexibility in electricity markets and more interconnections, Frankl said. We need to work out how to fit in new power generation and phase out the old – “this is a massive power transformation,” he said.

Alexandre Affre, director of industrial affairs at Business Europe, backed the call for a stronger carbon pricing as part of the European Emissions Trading System. He also said a greenhouse gas reduction target for 2030 is needed, and said that Europe must continue to build renewables. However, he questioned whether or not Europe has been “too quick” and has “gone too far” with its renewables build-out, chiding the continent’s “excessive subsidies” and questionable priority grid access for renewables, he said.

Turning to another issue high-up on the energy agenda – costs – Frankl underlined that the high price of fossil fuels is the driver behind today’s high energy prices. “The high prices of fossil fuels is the problem number one in the last five years in Europe,” he said. Rounding-up cost the issue, O’Connor asked: “What can be cheaper than an energy system based on 95% free fuel?”

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Where will wind energy be in 2020?

» By | Published 11 Mar 2014 |

CEObannerIn five or six years’ time, the wind energy sector will see an end to regulatory uncertainty, increasing levels of consolidation within the industry and leaps ahead in technology – said CEOs speaking at EWEA 2014 in Barcelona today.

We will see “advanced technology that is subsidy free,” said Anne McEntee, Vice-President of renewables at GE, adding that the sector needs to get more inventive. Xabier Viteri, CEO of renewables at Iberdrola, concurred saying that technological breakthroughs and innovations will surface by 2020.

While Anders Runevad, President and CEO of Vestas, said that in the offshore market we will be “starting to see the results of offshore investments,” Viteri said that cost cutting in offshore “is a must”. “Without cost reductions there will be no offshore industry after 2020,” he warned, adding that costs must come down by at least 40%.

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