The EU is doing well on green power- as the UK exits

With Climate Change at the top of the agenda, the EU aims to be the first carbon neutral continent, working towards net zero greenhouse gas emissions by 2050, with a new climate law being enacted soon. That’s taken some fighting for and fiddling, given the opposition from heavy coal users like Poland, but there’s a proposed Just Transition mechanism to help countries like that move to carbon neutrality, with nuclear excluded from support for this. So renewables should boom even more.

Renewables have certainly been doing well. Germany will soon get around half of its power from renewables, Portugal is already at over 54%, Denmark near 60%, while Sweden is at 66% and Austria over 70%. By 2030 some of these countries could be getting near 100% of their electricity from renewables and should also be beginning to meet significant shares of their heat and transport needs using renewables. Sweden already gets around 54% of all its energy from renewables, Norway and Iceland are both at around 70%. 

Many other European countries are also now moving ahead. For example, with its economy evidently recovering, the  new centre-right government in Greece aims to generate 61% of its power from renewables by 2030, with 7.7GW of solar & 7GW of wind capacity planned, up from 2.7 & 3 GW now. Hydro is at 3.7GW. It aims to close all lignite plants by 2028 and get 43% of its heating/cooling and 19% of its transport needs from renewables by 2030.

After a long period of retrenchment in Spain, Prime Minister Pedro Sánchez’s leftwing coalition government has declared a ‘climate emergency’ & pledged to transition to renewable energy ‘to reduce greenhouse gas emissions with the objective of reaching climate neutrality by 2050’.

That is not to say there are no problems, continued emissions from coal plants being the most obvious, with, notably, Poland resisting change on that. Germany is taking its time on its coal phase out too and France, still locked into nuclear, is moving quite slowly on renewables. But longer term, most of the countries in the EU have targets of getting to near 100% of power and in some cases all energy from renewables by 2050.  That is certainly seen as possible in some recent scenarios – although the current official EU renewable energy target is only 32% by 2030.

Coal remains a problem for some EU countries, though politically its basically on the way out: in a Eurobarometer public opinion survey 84% agreed that more public financial support should be given to the transition to clean energies with support for fossil fuel cut. A few EU countries are still keen on nuclear, and, although it is excluded from access to the Just Transition fund, it has been included as an allowed option in the EU Sustainable Finance Taxonomy, subject to ‘do no significant harm’ criteria, in particular with regards to the disposal of waste, and also life-cycle considerations.

Although the UK is now legally outside the EU, so it is no longer a rule maker, it will still be a rule taker for a while: the various EU laws still apply to the UK during the BREXIT transition process, set to run to the end of the year. Beyond that period who knows, with the UK out of the EU single energy market, the Emission Trading System and Euratom. The EU Green Deal also includes the idea of Carbon Border taxes, which may impact significantly on power imports and exports. Access to funding for new EU-UK grid links may also be limited. So there could be a problem if, as planned, the UK manages to expand renewables beyond the current level of supplying nearly 40% of power to maybe 50%, while also expanding nuclear.  At times it would have a lot of excess power to export.

However, with the UK and it problems no longer its direct concern, the European parliament is clearly keen to push the green deal and wants even more, and faster action, so that the EU may retain it position as one of the leaders in the field- and in renewables especially. It has not been doing too badly on that. At the end of 2018 the EU had around 466 GW of renewable capacity in place, 43 GW of that in the UK. Even leaving that part out, it was well ahead of the USA, then at 245 GW. However, China was at 696 GW, well in the lead globally in capacity terms. Given its less developed grid system, China has not been able to get good utilisation of all this capacity, an issue which, along with funding constraints, has led to a slower pace of growth recently, but it is still accelerating and the potential is vast: see my next post. 

The EU also still has a large potential to tap. For example, it has been claimed that roof-top solar PV could be expanded to supply around 25% of EU power, while the potential for on- shore wind has been put at 15TW,  nearly ten times current EU wind capacity, and it has been claimed there are potential sites for even more. Given also the large potential, in some locations, for offshore wind and other renewables large and small, the EU looks well set to be a world leader, as long as it provides the necessary support for these technologies to prosper.

The falling cost of renewables will obviously help, but that also introduces problems in competitive market systems - lower costs can mean lower profit potential and less incentive to invest in new capacity. That, and the use of competitive market auctions, has already meant that growth in renewables investment has slowed in the EU. The need for balancing power is also an issue. Marginal cost renewables can squeeze some gas plants out of peak markets, but we may need these plants (perhaps using stored green gas), and other balancing systems, to deal with lulls in renewable availability. So the market system needs to be restructured to support the newly emerging flexible energy supply and demand system.

Plenty for the EU to get on with to help renewables spread to meet heat and transport needs, as well as power needs. The UK also faces the same issues- now independently. Although it as done quite well of late on offshore wind power and capacity, it has blocked on shore wind and PV from CfD support, and overall it is still well behind most of the EU countries in terms of its renewable share of total energy- only just over 10%. It may not be missed