20 % renewable energy by 2020 – the RES industry’s point of view on

the Draft Renewable Energy Directive

Prof. Arthouros ZervosPresident

European Renewable Energy Council

Inter-Parliamentary Meeting on Renewable Energy and Energy Efficiency

Brussels, 29th January 2008

How it all started…January 2004 EREC

published the industries new goals

for 2020

EREC – European Renewable Energy EREC – European Renewable Energy CouncilCouncil

Umbrella organisation representing all RES sectors:Umbrella organisation representing all RES sectors:

AEBIOMAEBIOM European Biomass Association EGECEGEC European Geothermal Energy Council EPIAEPIA European Photovoltaic Industry Association ESHAESHA European Small Hydropower Association ESTIFESTIF European Solar Thermal Industry Federation EUBIAEUBIA European Biomass Industry Association EWEAEWEA European Wind Energy Association EURECEUREC AgencyAgency European Renewable Energy Research Centres Agency

Associate members: EU-OEAEU-OEA European Ocean Energy AssociationEuropean Ocean Energy Association EBIOEBIO European Bioethanol Industry AssociationEuropean Bioethanol Industry Association EREFEREF European Renewable Energy FederationEuropean Renewable Energy Federation ESTELAESTELA European Solar Thermal Electricity AssociationEuropean Solar Thermal Electricity Association

Representation of European RES industry, trade & research

The Root of the Energy Problem for the EU

• If we do not counteract, we are importing an ever growing share of our energy at unpredictable (but most likely higher) prices in competition with the rest of the world and at unbelievable environmental cost.

• Regardless of whether we are successful in energy diplomacy or not, we have no idea about the future cost of fossil and nuclear energy we will be paying to maintain current supply.

We are already paying for inaction• For every $20 increase in the price of oil, the

cost of Europe’s gas imports rises by €15 bn annually, given the unfortunate link between oil and gas prices

• The increase of oil prices over the past few years from $20 to $80 thus adds €45 bn. to EUs annual gas import bill

• For comparison, EU invested €9 bn. in wind energy in 2006

The forgotten COST: The REAL PRICE of our energy supply

Who is paying the real price?

The Electricity/Energy customer

The general populationIndirect burden via taxes, insurances and socialcontributions

The StateIncreasing environmental costs,„political“ costs

Global Loss of quality of life

Electricity/Energy Price

External Costs

EU Energy PolicyFrom

Coal&Steel

and

Nuclear

To

Security of Supply

Competitiveness

Sustainability

The senseless battle of „market versus the environment“

must become a battle of „markets for the environment“

The markets for the future are green!

The targets on renewable energy (including a mandatory biofuels target), energy efficiency and greenhouse gases have been agreed for

2020

None of these targets has primacy over the others.

RES 2020 Target and Climate Change Package

The 20% by 2020 EU target will only be met if legislation is adopted timely.

The Directive should be in force as soon as possible in order not to cause market instability around 2010 (ending of RES-E & Biofuels Directives) Member States and the European Parliament have to follow their own commitments - NOW

The Framework Directive must be adopted as soon as possible.

Division of the 20% target among Member States

How to best avoid lengthy negotiations ?

It seems the Commission managed quite well in dividing the numbers…only Belgium, Sweden, Austria and Latvia do not want to see the great opportunities in renewables development

Pre-Conditions for RES uptake

• Change in Paradigm: individual responsibility for own energy supply, as local and decentralised as possible

• Households and private sector in general should primarily produce their own heat and electricity from RES sources in an efficient environment

• Combination with drastic change in consumption pattern and increase in efficiency

• Political commitment beyond ideologies and short term thinking to go for strong national RES development

• Clear instruments, targets for rapid uptake and enforcement

• High level of market penetration by Independent RES Power Production

• Swift abatement of open and hidden harmful subsidies to incumbent industry

• As long as one or more of these conditions are not met – counterbalance is necessity

RES Framework Directive must contain:

Electricity: • Existing RES-E Directive should form the minimum starting point. • Provisions on grid issues and administration procedures must be

strenghened.

Heating/Cooling:• Renewable Heat obligation for new buildings• Coherent stable support measures• Removal of administrative barriers• Reliable statistics for RES-heating• Specific measures to promote RES cooling

Transport:• Definition of sustainability standards of biofuels

Precondition for reaching the targets

• Renewable Action Plans with sectoral targets for – RES-electricity, – RES heating & cooling – Biofuels

• Interim targets every second year to check whether development is on track

• Penalities for MS in case of not reaching the target

• Ensuring: development of ALL renewable energy technologies

EU wide Trading Mechanism

There is no reason to introduce such an artificial mechanism if it is meant to:

• produce disincentives for domestic investment

• endanger prosperous support schemes

• provide additional bureaucratic mechanisms

• A trading mechanism must be regulated and operated by public authorities on a Member State level only and not on a company level. Since Member States are responsible for meeting the target, they should retain control over the target and not leave it to companies

• If a Member State wants to sell renewable energy certificates abroad, it must already have fulfilled its own national target. Thus, exporting guarantees of origin to another Member State should be allowed only after the exporting country has met its national intermediate target: a country should not be able to sell something which it does not possess.

An exchange of guarantees of origin must be based on the following principles:

Expectations from the RES Framework Directive for RES-

heating & cooling Include binding sectoral targets for heating &

cooling in the National Action Plans

New buildings & major renovations:apply a renewable heat obligation

All other heat & cold consumption points: coherent, long-term oriented set of measures

Launch specific support for renewable cooling

Measures to promote RES integration into district heating systems

Product eligibility for support schemes based on EU standards & certification

- Sustainability criteria should cover not only biofuels but also biomass whatever its final use (biofuels, food, construction, electricity...)

- No biomass outside these sustainability criteria should be counted towards the target.

- Imported products should comply with similar standards as the cross compliance rules to avoid competition distortion.

Strong Sustainability Criteria

Renewable Energy Technology Roadmap

20 % by 2020

Renewable Energy Policy Conference

17 November 2008, Paris

Conference organised in the framwork of the French Presidency of the European Council

Further infos: www.erec.org

Thank you very much for your attention!

ERECEuropean Renewable Energy Council

Renewable Energy House63-67 Rue d’Arlon,

1040 Brussels, Belgium

www.erec.org