“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.


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.


IPCC: fossil fuels out, renewables in to tackle global warming

» By | Published 14 Apr 2014 |

Switching from fossil fuels to renewable energy and energy efficiency measures in the coming decades is the International Panel for Climate Change’s (IPCC) recommendation in its latest report.

This change is “affordable”, says the IPCC: it would knock only 0.06% off expected annual economic growth rates of 1.3%-3%, without quantifying the enormous health benefits of the lower CO2 and pollution levels.

The report – the third in a trilogy from the IPCC in recent months – was widely picked up in the press.

Some led on the need to “revolutionise the economy” (German newspaper Süddeutsche Zeitung and French daily Le Monde)

Others led with a more alarmist take on the current situation – “Global emissions of greenhouse gases have increased to unprecedented levels despite global efforts to reduce them” said Spanish paper El Mundo – and the limited time left to act (“Only 17 years” said La Repubblica in Italy).

In the UK, there was a divergence of views, with Independent and the Guardian upbeat and focusing on renewables’ role – “Incentives to mitigate climate change are not in vain”, said the former – while the right-wind Times and Telegraph both led on fracking and shale gas “being part of the solution to global warming”.

In fact, the IPCC report only mentions gas and shale gas as an interim measure to replace coal, while stressing that long term, all fossil fuels should be abandoned.

Interestingly this morning, the Financial Times published an article on a poll in the UK showing that three times as many Britons would prefer to live close to a wind farm than to a fracking site, making the government’s plan to stop new onshore wind farm projects look even more illogical.


EWEA’s 2015 Annual Event will be held two weeks prior to the UN’s climate negotiations in Paris in November next year: more information.


Do wind farms really send house prices down?

» By | Published 09 Apr 2014 |

The debate about wind turbines and property prices blows on, pushed back into the headlines every so often by a gust from a new study or piece of research.

The latest studies on the subject, from the UK, contradict each other: a study from the London School of Economics purports to show that wind farms can knock as much as 12% off the values of homes within a 2km radius, but a report by the British Centre for Economics and Business Research in March found no negative impact on property prices within a 5km radius of a turbine.

Another UK based study, from the RICS4-Oxford Brookes University in 2007 concluded that “there was limited evidence of detrimental impact of wind farms on house prices”.

Beyond the UK, studies from Denmark, the US and Canada have all corroborate the fact in recent years that there is no impact on property prices.

How is it possible that the highly reputed LSE has come out with a study which shows the opposite of the main research on the subject? Maf Smith, deputy chief executive at UK renewable energy association RenewableUK explained in The Guardian:

“The LSE study tests for the influence of wind farms in a different way. It covers a shorter period rather than looking at the whole lifecycle of the project. It measures only from a central point at each wind farm site rather than taking into account every single turbine at the very edges of the development. It makes necessarily simple assumptions about visibility, when we know that in reality many sites will be hidden by nearby buildings, trees and the local landscape.

“We’re grateful that the professor states that his work is not conclusive. It helps to explain why his findings don’t accord with previous research that the CEBR, RICS and others have done.”


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.