Tuesday, 4 August 2015

EU is becoming laggard in world renewable energy deployment

The EU, much famed in previous years for its promotion of global climate change abatement treaties and its installation of renewable energy, is heading for 'laggard' status in the global drive for clean energy.

Until a few years ago the bulk of renewable energy installed in the world was sited in the EU. But now the proportion is falling quickly. In 2014 only a quarter of new wind power capacity and only a fifth of new solar pv capacity was installed in the EU. That proportion seems certain to fall significantly in the next two years. The UK's renewable programme is being mostly abolished, in Spain windfarms have already stopped being installed and Germany has decided to strangle its once impressive solar pv programme.

The EU no longer has credibility in claiming to lead the fight to reduce carbon emissions. It's efforts prior to Paris will be marginal at best, and the main action will be negotiations between the U.S. and emerging economies, particularly China.

One can point to industrial influences for this change - the increases in renewable energy has occurred against a backdrop of stagnant or, in some countries, falling electricity demand exacerbating the overcapacity of electricity generation. The climate friendly solution of course is therefore to cut back on fossil fuel production, particularly coal, and continue renewables expansion and energy efficiency initiatives. Yet in Germany policy is focussing on curbing the expansion of renewable energy in order to prop up the coal industry. Incentives have been taken away from renewables but preserved for coal - indeed new subsidies for coal plant are being discussed just as an annual cap on wind power expansion is to be put in place and all but a dribble of new solar pv capacity stopped.

Dave Elliott writes to me to point out that some lignite plant are being taken offline; fair comment. However, to me this looks like a bit of a grubby compromise given that more incentives will be spent to preserve some of that capacity as occasional reserve, power when it is plain the renewables industry believes that if reserve power is needed then much cheaper, lower carbon and much more efficient gas fired power plant should be built.

Energiewende is a busted flush, in reality - that's not because the nuclear phase-out is impractical so much as because Germany has, in effect, decided to give priority to coal over renewables.

The problem is EU wide, and it has been given a supposed 'rational' facade by the European Commission in its policy decision made two years ago to ask for 'auctions' for renewable energy schemes as means of awarding feed-in tariff contracts. This is billed as a cost-saving device, but the reality is that the costs are saved through not installing renewable energy plant rather than installing them more cheaply. Finally the big energy companies who have sought a means of protecting their centralised power plant from the threat of renewables have found a new weapon. Results of, for example, the UK's recent auction for renewable energy contracts are touted as proof that the policy works. But the price reductions recorded are either the consequence of falling renewable energy costs anyway because of technological improvements or the result of silly bids for uneconomic projects. People's attention has been diverted by this conjuring trick away from the fact that the volume of new renewable energy projects is being severely rationed.

Of course the renewable energy trade associations are currently are complaining about this, but alas, the owners of the big power stations have regained the whip hand.

But there's still hope in the case of China, and hopefully, in the future, India. For Europe, alas, their glory, like so many things now, is in the past.

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