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 todevelop a society that is truly sustainable, and provide a model thatthe rest of the world can follow. Renewable energy provides thecompetitive advantage for a strong performing European industry and isthe 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 competitivemarket environment for renewables. During a panel discussion withEuropean policy-makers at the annual European Renewable Energy Policy Conferencein Brussels this past week, I proposed that we need a clear financialcommitment 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 electricitymarket by 2020. In a recent study (“SET for 2020”by EPIA and A.T. Kearney) a “paradigm shift scenario” could deliver asmuch as 460 terrawatt hours (TWh) of electricity with a cumulative 390gigawatt (GW) of installed PV in the EU. We need concrete financialinstruments for funding research and development, greater investment ininfrastructure, and continuous, measured sustainable business modelsbased on feed-in-tariffs.

Alongside Raffaele Liberali, director of Energy in the EuropeanCommission’s Department for Research (DG RTD), and Juan Alario, head ofthe Energy Efficiency and Renewable Energy Division at the EuropeanInvestment Bank (EIB), I made it clear that Europe’s 20-20-20renewable energy and energy efficiency objectives are achievable butthat the EU will need to install the same capacity of renewable energythat it has done in the last 10 years every single year for the nextdecade. An additional investment of €50 billion in energy technologyresearch 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-yearbecause of German legislation. Grid parity is within sight. The more wedo now, the greater the value we can expect for the EU. The calculationof the Net Present Value shows not only a positive value for everydeployment scenario, but that positive value increases with greaterinvestment in PV by the national economy, which will also spur thespeed and scope of the development of the PV market.

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