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Putin unwittingly boosts European renewables

Oscar Fitch-Roy - small

This author no longer works for DNV GL.

As Europe prepares to debate the future of renewable energy policy, the Russia-Ukraine crisis should be a wake-up call for the European Council.

The 28 heads of state and government of the European Union will have plenty to occupy them when they sit down to talk at the European Council today. Top of the formal agenda are the closely related issues of the EU’s long-term ambition for climate and energy policy and the international competitiveness of Europe’s economies. But there can be little doubt that the talks will be dominated by events in Ukraine that have gripped the world since the Council last met at an ‘extraordinary meeting’ just two weeks ago.

It is unclear whether the Council will be able to agree on a more substantive response to Russia’s annexation of Crimea than the toothless sanctions imposed so far, such as stopping the import of Russian gas to Europe (the EU imported 130 billion cubic metres of natural gas from Russia in 2013). The EU is profoundly dependent on Russia for energy, a truth that has once again been rammed home by external political events. Not only is the Union right to be concerned about such a concentration of its energy supply: some people worry that it harms the EU’s ability to take meaningful action in situations like the one currently unfolding in Ukraine. In addition, the EU faces the unenviable challenge of formulating a response that all parties can sign up to when the costs borne by individual EU countries are likely to vary widely, as are their negotiating stances.

The economic and diplomatic headaches that stem from the EU’s dependence on a single source of energy make an excellent argument for the long term diversification of supply—a goal best achieved through the expansion of production from clean, domestic renewables. Europe is blessed with a full range of renewable resources, from the windy north and west to the sunny south, and has been no slouch when it comes to exploiting them. Impressive progress has been made across the continent in the last few years, largely due to the impact of the bold and forward-looking targets agreed in 2007 which require 20% of energy demand to be met by renewables by 2020.

Earlier this year, recognising that, in energy investment terms, 2020 is not far away, the EU Commission drafted plans for a new set of measures for the period after 2020. Behind the scenes, Europe’s negotiating machinery is in full swing working up a set of policies that the member states can sign up to. Opinions are sharply divided about the question of a binding renewables target with some countries, including the UK, seeking a single target on emissions to allow flexibility in how emissions are curbed. However, there is widespread scepticism of whether an emissions target without a renewables target would be effective and the approach has been described as “a bicycle without pedals.”

Timing of a decision is another vexed issue. The renewables industry has stated its concern that a delayed decision may result in an investment hiatus and loss of confidence, but it is widely expected that a firm decision from the Council will be delayed until the summer. Some heads of state would prefer to wait and see what kind of deal emerges from the Paris climate talks next year.

And it’s not just the climate and energy security of the EU that is at stake in the negotiations; the industrial benefits of moving to a renewable-based energy system should not be understated. It is estimated that half a million more jobs will be created by a policy including targets for emissions, renewables, and energy efficiency than an emissions target alone.

The 2030 framework proposals started the process of deciding what the EU should aim for in 2030. By quickly opting for an ambitious and binding 2030 renewables target, the European Union is in a position to simultaneously reduce dependence on economically damaging energy imports, boost jobs, and retain its global leadership in climate change mitigation. It would also send a very clear message about what Europe thinks of the future of energy geopolitics.

Years of painstaking work have been put into preparing for this meeting of the European Council, but sometimes it takes a shock to shift debate out of complacency and into action. The Russia-Ukraine crisis is just such a wake-up call. Instead of crowding the 2030 framework off the table at today’s Council, it should bring it front and centre. If it does, it could just be the biggest favour Vladimir Putin has ever done for renewable energy.

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