climate and energy policy
The Energy [R]evolution presents European decision-makers with a cost-effective and sustainable pathway for our economy, while tackling the challenges of climate change and the security of energy supply. A fully renewable and efficient energy system would allow Europe to develop a sound energy economy, create high quality jobs, boost technology development, secure global competitiveness and trigger industrial leadership.
At the same time, the drive towards renewables and the smart use of energy would deliver the necessary carbon dioxide emissions cuts of 95% by 2050 compared with 1990 levels, which Europe will have to realise in the fight against climate change. But the Energy [R]evolution will not happen without much needed political leadership: The European Union and its Member States will have to set the framework for a sustainable energy pathway. At present, a wide range of energy-market failures still discourage the shift towards a clean energy system. It is high time to remove these barriers to increase energy savings and facilitate the replacement of fossil fuels with clean and abundant renewable energy sources.
European decision-makers should demonstrate commitment to a clean energy future, create the regulatory conditions for an efficient and renewable energy system, and stimulate governments, businesses, industries and citizens to opt for renewable energy and its smart use. Greenpeace proposes five steps that the European Union and its Member States should take to realise the Energy [R]evolution.
1. Develop a vision for a truly sustainable energy economy for 2050 to guide European climate and energy policy
Demonstrate how the EU will play its role in slashing global emissions until 2050
EU leaders committed in 2005 to the objective of keeping global mean temperature increase below two-degrees Celsius (2° C) compared to pre-industrial levels. Above this level, damage to ecosystems and disruption of the climate system would increase dramatically. In October 2009 the EU leaders also committed to reduce emissions in the EU by 80-95% in 2050 compared to 1990. The EU should develop a credible emissions reduction pathway to achieve a 95% cut within Europe, so as to make sure that the EU does its part to keep global warming below the 2°C threshold.
Move the energy system towards 100% renewable energy and high efficiency in all sectors
Europe’s energy system is outdated and substantial investments in power production capacity and infrastructure, as well as buildings and transportation, will have to take place within the next decade. These investment decisions will shape the structure of the energy system until 2050 and beyond. A highly energy-efficient economy is a precondition for Europe’s competitiveness and well-being. To power our electricity, transportation and remaining heating requirements, renewable energy sources are the truly sustainable, cost-effective and available solution. Too much energy is still wasted in inefficient vehicles and buildings. Investments in coal production and nuclear power hinder the transition towards a clean energy economy. They divert financial resources and create economic and technical lock-in effects in conflict with the uptake of renewable energy and energy efficiency. Europe should therefore take a strategic approach and commit to a truly sustainable vision for a fully renewable and energy efficient electricity and heat production, as well as clean transportation until 2050.
2. Adopt and implement ambitious and legally binding targets for emissions reductions, energy savings and renewable energy
Commit to legally binding emissions reductions of 30% as the next step, and lead by example
The EU has only included a 20% emission reduction target for 2020 in EU legislation, and has put a conditional offer for 30% emission reductions on the table at the international climate negotiations.
Greenpeace urges EU leaders to show leadership and to commit as soon as possible to a 30% unconditional emission reduction target for the EU. This as a first step towards at least 40% emission cuts by 2020 for all industrialised countries under a global climate agreement. Furthermore, a 30% reduction target is required to strengthen the EU’s carbon price in the EU Emissions Trading Scheme (EU ETS). Due to the economic recession of 2008 and 2009 the EU ETS carbon price has collapsed, taking away an important driver for green and resource-efficient technology investments.
Internationally, the European Union will have to provide substantial additional finance to help developing countries mitigate climate change with clean energy technologies and forest protection.
Set legally binding targets for energy savings by 2020
The EU has set itself a target to reduce energy use by 20% by 2020, compared to business-as-usual. This target will not be met without additional measures. The EU should convert the nonbinding 2020 EU energy savings goal into a legally binding requirement for all EU member states, whilst allowing member states some flexibility in achieving these requirements. It should accelerate the implementation of current energy savings policies and devise new policies to deliver large-scale investments into energy efficiency improvements. Implement the binding renewable energy targets of at least 20% by 2020 With the adoption of the Renewable Energy Directive, European Member States have committed to legally binding targets, adding up to a share of at least 20% renewable energy in the EU by 2020. The Energy [R]evolution scenarios demonstrate that even more is possible. To reap the full benefits that renewable energy offers for the economy, energy security, technological leadership and emissions reductions, governments should aim for an early achievement of their renewable energy targets and prepare for the further uptake of renewable energy sources beyond 2020.
3. Remove barriers to a renewable and efficient energy system
Reform the electricity market and network management
After decades of state-subsidies to conventional energy sources, the entire electricity market structure and network system, have been developed so as to suit centralised nuclear and fossil production structures. Current ownership structures, price mechanisms, transmission and congestion management practices and technical requirements hinder the optimal integration of variable and decentralised renewable energy technologies. As an important step to facilitate the reform of the electricity market, all European governments should secure full ownership unbundling of transmission system operations from power production and supply activities. This is the effective way to provide fair market access and overcome existing discriminatory practices against new market entrants, such as renewable energy producers. A modernisation of the power grid system is urgently required to allow for the costeffective connection and integration of renewable power sources. The European Union and its governments should create the necessary framework conditions and incentives for the development of grid connections for renewable energy supply, including offshore, targeted interconnection that allows for the transmission and balancing of variable supplies across regions, as well as smart grid management and technology that allows for the integration of variable and decentralised supplies and active demand side management. To facilitate this modernisation, the Agency for the Cooperation of Energy Regulators (ACER) should be strengthened and the mandate of national energy regulators should be reviewed. Both ACER and the European Network of Transmission System Operators for Electricity (ENTSO-E) should develop a strategic interconnection plan until 2050 which enables the development of a fully renewable electricity supply. In parallel, electricity market regulation should ensure that investments in balancing capacity and flexible power production facilitate the integration of renewable power sources, while phasing out inflexible ‘baseload’ power supply. Phase out all subsidies and other support measures
for inefficient plants, appliances, vehicles and buildings, as well as for fossil fuel use and nuclear power While the EU is striving for a liberalised market for electricity production, government support is still propping up conventional energy technologies, hindering the uptake of renewable energy sources and energy savings. For example, the nuclear power sector in Europe still benefits from direct subsidies, government loan guarantees, export credit guarantees, government equity input and subsidised in-kind support. In addition, the sector continues to profit from guaranteed cheap loans under the Euratom Loan Facility and related loans by the European Investment Bank.
Apart from these financial advantages, the nuclear sector profits from cost-limitations for decommissioning of power stations and radioactive waste management (e.g. in Slovakia and the UK), government bail-outs of insufficient reserves for decommissioning and waste management (in the UK), and government financing of R&D and education infrastructure (on a national level and under Euratom). Liability coverage for installations in the nuclear energy sector is so low that damage of any major accident will have to be covered almost completely by state funds. The total level of these financial advantages is estimated to be several times the financial support given to the renewable energy sector. Also fossil fuels continue to receive large financial benefits that contradict the development of a clean power market. Spain, Germany, Poland and Romania still subsidise their coal sectors with support or at least acceptance from the side of the European Commission, although these subsidies should be phased out under the Treaty of the European Union. New EU funds for fossil fuel technologies have been made available in recent years to promote carbon capture and storage technology. Spending money on carbon capture and storage is diverting funds away from renewable energy and energy savings. Even if some carbon capture and storage becomes technically feasible and capable of long-term storage, it would still only have a limited impact on emission reductions and would come at a high cost. In the transport sector, the most energy intensive modes, road and aviation, receive about EUR 150 billion in subsidies and tax exemptions. About 7% of the EU’s Structural and Cohesion Funds are spent on road and aviation infrastructure. Also the EIB has long favoured these modes of transportation, especially in Central and Eastern Europe, cementing Europe’s high carbon transport system. Close existing loopholes for nuclear waste The European Union and the Member States should bring the management of nuclear waste in line with general EU waste policies in order to make the polluter pays principle fully effective. This means that loopholes under which certain forms of radioactive waste are excluded from waste rules have to be closed. This includes depleted uranium, reprocessing waste, plutonium and reprocessed uranium stockpiles, uranium mining waste as well as fluid and air-borne wastes from uranium enrichment, fuel production and spent nuclear fuel reprocessing. It also includes clear policies for phasing out the production of radioactive waste from processes for which there are economic and environmentally viable alternatives, which is certainly the case for nuclear electricity production. Over 90% of radioactive waste is produced by the nuclear power sector – a nuclear phase out policy as proposed in the Energy [R]evolution scenario is therefore the logical step in a coherent and consequent EU waste policy.
4. Implement effective policies to promote a clean energy economy update the Eu Emission Trading Scheme
The EU should update its Emissions Trading Scheme (EU ETS) so as to move away rapidly from free allocation of emission allowances. To provide the right market signals and the economic incentives for the transition of our energy system along the whole production and consumption chain, all allowances under the Emissions Trading System should be auctioned rather than being given out for free. Auctioning reduces the total cost of European climate action because it is the most economically efficient allocation methodology, eliminating windfall profits from free allowances. Furthermore the EU ETS should be a driver for domestic emission reductions. The required domestic reductions must not be replaced by investments in questionable projects in third countries (‘offsetting’). Strict quantitative limits and strict quality criteria on offsetting should guarantee real emission cuts and investments in green technology and jobs.