Renewable energy in Europe
Our dependency on fossil fuels as the world's "economic engine" is a complex, global and far-reaching challenge. Emissions of greenhouse gases (CO2) are rapidly warming the earth's atmosphere and causing long-term, dramatic climate change.
Among leading international institutions, political groups, national governments and research environments, there is global consensus that climate change is happening and is serious. Through the work of, among others, The United Nation's IPCC (Intergovernmental Panel on Climate Change), a target of limiting global warming to 2 degrees Celsius has been accepted.
Energy - a key factor
86% of the entire world's energy production today is fossil-based (IEA, Key World Energy Statistics, 2011). Approximately 30% of all CO2 emissions come from energy production. A dramatic change in how we produce and how we consume energy is needed. Energy produced from fossil fuels needs to be replaced by renewable energy from wind, solar, hydro and other non-fossil sources. There are obvious challenges in replacing existing energy systems while developing new and efficient ones. What seemed like an impossible task only a few years ago is now viewed as difficult but feasible through clean technologies, profitable business models, robust and flexible infrastructure, as well as the necessary financial models.
Europe - setting the pace
The European Union (EU) has, through numerous directives and initiatives, set ambitious targets for CO2 reductions and increased shares of renewable energy in the European energy system. The "2020 targets" are well known and widely accepted. The latest Renewable Energy Directive was adopted in 2009, and covers the three "energy sectors": transport, heat and electricity. The Directive provides clear targets for member states, as well as guidelines and mechanisms for how to reach the targets. National action plans will ensure that the share of renewable energy produced in Europe increases from 10% to 20% by 2020.
With the latest EU Energy Roadmap 2050, the focus is now being directed towards how to create a low carbon economy by 2050, strongly supported by the International Energy Agency (IEA). The Roadmap explores routes towards the decarbonisation of energy systems, including examining scenarios targeting an 80% reduction in greenhouse gases, and an 85% decline in energy-related CO2 emissions.
The goal of the electricity sector is "to double renewable electricity production between 2010 and 2020". In 2010, approximately 700 TWh of a total electricity production of 3500 TWh was based on renewable sources. This means that approximately 70 TWh of new production capacity needs to be enabled - every year. This quickly raises the question of financing. Using a conservative investment figure of EUR 0.5 per new KWh, EUR 35 billion in subsidies will be needed every year. A large portion will come from various public support and subsidy schemes put in place centrally by the EU, as well as by the member states. It is also clear that activating commercial market players to invest in the renewable sector is vital if we are to succeed in reaching these targets.