Cutting the European Union’s greenhouse gas emissions by 80% relative to 1990 by 2050 could be achieved economically with high levels of renewable generation, and will be essential in ensuring a competitive future for Europe, according to a report by the independent European Climate Foundation released on 15 September.
But the Roadmap 2050 report, launched at a London conference hosted by the NGO Green Alliance, stresses this will mean an early start by 2015 on massive investment in energy efficiency, low-carbon generation and transmission systems. It also argues for an overhaul of the bloc’s policy and regulatory arrangements to create long-term market incentives for business, and preparation for rapid electrification of heating for buildings and of transport.
The report explores the technical, economic and policy implications of different mixes of energy sources, ranging from 40% to 100% renewable generation to achieve the 80% reduction target.
A key finding of the report, which draws on analyses by five consultancies including Imperial College London, KEMA and McKinsey & Company, is that even with high levels of renewables, electricity costs will be comparable to the business-as-usual carbon-intensive scenario. This contrasts with the UK Committee on Climate Change’s call for a freeze on UK renewable electricity targets (endsreport.com, September 2010), and the energy and climate department (DECC) pathways analyses (ENDS Report, August 2010). Both suggest considerably higher costs.
The roadmap report also revealed that in all the pathways it examined, available technologies and demand management, coupled with energy efficiency and Europe-wide electricity network investment, could deliver a decarbonised power sector with the same degree of reliability as today. A wide package of policy measures is needed, it says.
But the report points out that success depends on integrating national and regional electricity markets and developing smart grids. A European ‘supergrid’ is a priority, as it would help load-balancing to allow for varying renewables output, reducing risks and overall costs. The technology to create these networks exists today, but cross-border regulatory barriers need to be overcome, and long-term incentives for business to invest in highly capital intensive projects have yet to be created.
To achieve the 2050 80% target, major policy failures will need tackling, especially on energy efficiency, which is the first and lowest cost priority.
Under the 20/20/20 energy and climate package launched in 2008 (ENDS Report, January 2009), national energy efficiency action plans (ENDS Report, May 2010) were not mandatory, and levels of savings need to triple. The report calls for these to be made binding, but allowing for flexibility in how they are achieved. And it calls for more focus on removing market barriers to energy efficiency action.
Boosting energy efficiency will mean revising the Energy Services Directive, and strengthening the Eco-design of Energy Using Products Directive (ENDS Report, January 2010) to include minimum regularly updated performance requirements based on best available technology. The report also calls for a strengthening of the Energy Performance in Buildings Directive, poorly implemented so far, to ensure zero net energy requirements for new buildings by 2020.
The EU emissions trading scheme (ETS) will need to be updated to meet 2050 goals, and will need to be complemented by other measures to ensure long-term investment in low-carbon generation and carbon capture and storage, it says. New renewable and energy efficiency targets will need to be set beyond 2020. But the report warns that these measures will need to be coordinated with EU ETS policy to ensure they do not further undermine and distort carbon prices.
The report says increased finance will be critical to low-carbon investments, such as new levies, and taxes on EU ETS windfall gains. But it points out that given the debt crisis, the main source will be reallocating and coordinating existing EU budget allocations more effectively. It stresses this could be achieved through a more integrated climate and resources policy framework.
The report concludes that key EU reforms already under way, including reforms to the EU’s fragmented electricity market, will help facilitate the huge changes needed out to 2050. But there will need to be legislation to establish a framework for ensuring longer term climate objectives beyond 2020 are delivered efficiently given limited resources, it says.