Funding Renewable Energy Technologies: Will Europe lead the way?
European leaders have acknowledged that the European Union (EU) possesses the resources it needs to tackle climate change. However, instead of letting the market define its needs, the EU has pledged to develop a society that is truly sustainable, and provide a model that the rest of the world can follow. Renewable energy provides the competitive advantage for a strong performing European industry and is the key to a sustainable 21st century economy: energy security, environmental protection and cost-efficiency.
The question on every renewable energy advocate’s lips is “Can the EU give this rhetoric a real foothold in European markets?”
What we need from the EU and its 27 Member States is a competitive market environment for renewables. During a panel discussion with European policy-makers at the annual European Renewable Energy Policy Conference in Brussels this past week, I proposed that we need a clear financial commitment from the EU and its Member States to transcending a ‘business-as-usual’ scenario so that technologies such as photovoltaic (PV) can be competitive in as much as 75% of the European electricity market by 2020. In a recent study (“SET for 2020” by EPIA and A.T. Kearney) a “paradigm shift scenario” could deliver as much as 460 terrawatt hours (TWh) of electricity with a cumulative 390 gigawatt (GW) of installed PV in the EU. We need concrete financial instruments for funding research and development, greater investment in infrastructure, and continuous, measured sustainable business models based on feed-in-tariffs.
Alongside Raffaele Liberali, director of Energy in the European Commission’s Department for Research (DG RTD), and Juan Alario, head of the Energy Efficiency and Renewable Energy Division at the European Investment Bank (EIB), I made it clear that Europe’s 20-20-20 renewable energy and energy efficiency objectives are achievable but that the EU will need to install the same capacity of renewable energy that it has done in the last 10 years every single year for the next decade. An additional investment of €50 billion in energy technology research will also be needed.
The renewable energy industry is already doing its part in Europe. We can, for example, expect an 8% price decrease for PV year-on-year because of German legislation. Grid parity is within sight. The more we do now, the greater the value we can expect for the EU. The calculation of the Net Present Value shows not only a positive value for every deployment scenario, but that positive value increases with greater investment in PV by the national economy, which will also spur the speed and scope of the development of the PV market.