Forward thinking: EU 2030 climate and energy policy

Energy savings and renewables tick the ‘yes’ box to the three key criteria on which the European Union will decide its post-2020 climate and energy policy: will the policy deliver the required greenhouse gas emissions cuts? Will it ensure security of supply and reduce energy imports? And will it be good for the economy and energy prices?

According to estimates from the European Commission, the tougher the EU’s energy savings policies, the better it will be for GDP. This makes sense. It is plainly to a business’s advantage to produce more efficient (and therefore more sought-after) products and to use less energy while doing so. This is how Toyota came to dominate the global car market.

At the same time, energy savings push down prices for businesses and private consumers. A study from research group Ecofys estimates that the net financial benefits of meeting the EU’s 2020 energy efficiency goals add up to over €200 billion per year. This is due to a combination of reduced need for energy infrastructure and lowered energy prices due to lower demand.

And the EU has huge cost-effective energy savings potential. A report from Fraunhofer ISI for the German government estimates that the EU could comfortably cut its energy use by 50% below current levels by 2030. This would have a dramatic effect on greenhouse gas emissions, reducing them by 52% according to the report.

So the first step is to save energy. Beyond this, renewables are the best choice to provide a clean, safe and technologically viable energy supply.Unlike nuclear, renewables are safe and there is no issue with radioactive waste storage. Unlike carbon capture and storage (CCS), renewables are proven and scalable: already in 2010, renewables accounted for 21% of the EU's electricity production. And if we wish to prevent climate change, fossil fuels are only viable with CCS. Yet Europe's main CCS project – the Sleipner field off the Norwegian coast – stores less than one million tons of CO2 per year. This is just 1/5000th of current annual EU greenhouse gas emissions.

Because wind, solar and water resources are free, there are no fuel costs to renewables, except biomass. This means that once up-front investment costs have been paid off, energy prices can be lowered well below present levels while still paying renewable energy producers a fair income. Combined with energy savings, this boosts competitiveness: German wholesale electricity prices were up to 40% lower in 2011 than in 2007. Contrast this with fossil fuels: the UK Climate Change Committee has found that up to 90% of price rises since 2004 are due to rises in gas prices. And fossil fuel prices are only getting higher and more volatile.

Because renewables are being developed in Europe, imports of oil, gas, coal and uranium can be progressively phased out. This is welcome news for the EU’s trade balance: Europe currently spends over €400 billion per year on its energy imports. Domestic energy production, like energy efficiency improvements, also means more jobs: with renewables the full energy chain – from wind turbine to electrical socket – is ‘in house’.

If the EU is to meet its goal of reducing greenhouse gas emissions by 80-95% by 2050, its energy system must be virtually carbon free. The EU has to make a judgementcall on which options will deliver emission cuts at the scale and speed necessary – while maintaining a secure energy supply – and which won’t. And it has to assess which of these will be best for the economy and for energy prices. This is what the debate about post-2020 climate and energy policies is all about. If there is a better pro-green and pro-business choice than to support energy savings and renewables with binding 2030 targets, it is time to hear it.

The views expressed in this column are those of the columnist and do not necessarily reflect the views of eceee or any of its members.