Strategic Initiatives

It established for each Member State a specific, legally binding target – leaving each country free to define its own renewable energy mix. In addition, several types of “cooperation mechanisms” (statistical transfers, joints projects – potentially with third countries – and joint support schemes) have been created, providing the Member States with the necessary flexibility to achieve their targets on a cost-optimal basis.

Aside from the target-setting, the Directive also created several provisions to facilitate the development of renewables: simplification of administrative procedures, improved access to the grids and promotion of the qualification and certification of installers.

This regulatory framework has sparked the development of renewable electricity, which today represents more than 20% of the electricity generation in the EU 27. This share will rise to at least 34% once the 2020 targets are reached.

The Directive establishing the European Union Emissions Trading System (EU ETS) is the key element of a legislative framework focussing on explicitly mitigating climate change thanks to a reduction in GHG emissions – mainly CO2. The system makes emitting CO2 costly and creates an EU-wide market for the emissions. From 2013, the possibility of emitting GHG for the power sector will be subject to auctioning. All GHG emitting plants will need to bid for the possibility of releasing GHG into the atmosphere.

The system was conceived to shift the costs of emissions to the polluter. Recently, however, the economic downturn has contributed to creating an unexpectedly slack demand of GHG permits (allowances). This has contributed to undermining the effectiveness of the scheme in slashing GHG emissions. Moreover, the ETS is currently the only policy instrument creating a framework for GHG emissions’ reduction after 2020. It remains therefore crucial that the balance between demand and supply is redressed. Together with a continuous effort to reduce energy consumption, this will complement the specific framework for renewable energy that will be needed to meet Europe’s 2050 decarbonisation objectives.

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PV will play a key role in this transition towards a more sustainable energy future. Taking into account recent market developments, EPIA developed 2030 scenarios, as described below:

• The Baseline scenario envisages a business-as-usual case with 4% of the electricity demand in the EU provided by PV in 2020, 10% in 2030
  
  
• The Accelerated scenario, with PV meeting 8% of the demand in 2020, is based on current market trends, and targets 15% of the demand in 2030
  
  
• The Paradigm Shift scenario, which foresees PV supplying up to 12% of EU electricity demand by 2020 and 25% in 2030, is based on the assumption that all barriers are lifted and that specific boundary conditions are met.

On 6 June 2012, the European Commission presented a Communication on the strategy for the deployment of renewable energy, outlining options for the period beyond 2020.

Preparing the grids and the markets of tomorrow requires a reliable forecast of the future energy mix. Given the lifetime of upcoming investments in grids and new generation capacities, technology-neutral decarbonisation strategies will have to face a “cost of uncertainty” that could even lead to lock-in, suboptimal solutions. An agreed vision of the future energy mix should therefore be developed.

In order to provide clarity to stakeholders EPIA is calling for a 45% binding renewable target by 2030. Such a framework should be supported by a properly functioning EU Emissions Trading System (ETS) which should discourage investment in carbon-intensive generation, and a continuous effort to reduce energy consumption.

On the road to 2020, a continued commitment to R&D and innovation will be needed. The full implementation of the priorities identified in the Solar Europe Industry Initiative (SEII) will ensure a further maturing of technology while supporting the transition towards a sustainable energy mix as part of a strong European industrial policy.