Winds of change in Europe

The European Wind Energy Association’s Pierre Tardieu outlines the challenges facing wind energy as it becomes increasingly important in the European energy system.

Wind energy is playing an increasingly active role in Europe’s changing energy system and needs to continue to do so in the future, says Pierre Tardieu of the European Wind Energy Association (EWEA).

The vision of the non-profit, non-governmental association is that wind energy will be the leading technology in transforming the global energy supply structure to a sustainable energy future based on indigenous, non-polluting and competitive renewable technologies.

But the senior political advisor contends that there are a number of challenges to overcome in Europe in order for this to happen.

“As a starting point, Europe is importing massive amounts of energy every year to the tune of €400 billion a year and this is essentially fossil fuel. At the same time, we have an ageing energy infrastructure with a lot of it is from the 1960s-1970s,” he says.

Tardieu cites the International Energy Agency’s figure of €1 trillion of investment being required between now and 2020 to revamp the system. “The problem is that the way the market is functioning today, the market design does not allow for these investments to go forward. This is in the context of a faltering industrial base and more fundamentally politically Europe, which had been the leader until probably COP 15, is really losing its leadership position.”

He continues: “We think that Europe needs to take a much broader stance and move away from an economy that is heavily based on fossil fuels and move to a decentralised power production that is no longer based on fossil fuels and antiquated business models.”

Progress so far
At present, Tardieu says there is a “very strong trend towards renewables”. In the last five years or so, wind and solar photo-voltaics have represented 70 per cent of all the new installed capacity in Europe.

Back in 2000, wind energy represented 2.4 per cent of the power capacity base which he describes as “essentially negligible.” This had increased to about 14 per cent by the end of 2014 and Tardieu expects the rate to reach 15 to 17 per cent by 2020, in line with European projections.

“The installed capacity at the end of last year in terms of wind can meet 10 per cent of the European power demand today.

“We’ve cracked the double digit barrier and I think this is a very important point as we can claim now to be a mainstream technology.

“Looking ahead, it is obviously going to be much more. We are expecting a quantum leap. If we look ahead to 2050, referring now to the European Commission’s work on the 2050 road map, this portion could reach up to 49 per cent.”

He continues: “We’ve moving away from a system where we had a base load and variable renewables are on top to a system in which variable renewables are at the centre of the system and the other technologies are essentially complete the renewables system.”

Hurdles
A number of hurdles remain in the path of EWEA’s vision for wind energy. The fundamental issue, however, lies with interconnection and market design. “We are not going to be able to drive renewables development and to have large penetration shares if we are not adjusting the European power markets and include the requirements that we need there.

“We need to get rid of the energy islands that remain. This is especially true for the Iberian peninsula which has already high penetration levels, but will not continue until they can get connected to France and get rid of the excess power to the benefit of the Spanish and French consumer.

“Because we are an industry and because we are a global leader, we are already exporting a lot of wind energy equipment to the tune of €3.5 billion for 2012, for example.”

He adds: “But we are experiencing barriers in accessing markets abroad and local content requirements are one example of what we’ve seen.”

Tardieu also cites regulatory instability as a problem. “We’ve seen a lot of retroactive changes to support mechanisms. Thankfully, not in Ireland, but we’ve seen many cases in the Czech Republic, Spain, Portugal, Bulgaria and Romania. And this really poisons the well for renewables deployment going forward.”

The issue of subsidies is a sore point. “Renewables are not on a level playing field with fossil fuels because subsidies of renewables are exposed very well and those of the competitors are not. It is just something that needs to be addressed,” he says.

Last year, the International Energy Agency said that wind energy can compete with fossil fuels while the European Commission said that wind energy is cheapest when subsidies and externalities are considered.

“There are subsidies going around to everybody, in particular to coal. In fact, in 2012-2013, coal got as much support as on-shore winds, EU-wide it was roughly €10 billion.

“When you take this into consideration, as well as externalities, and you tally this and add it to the levelised cost of energy, wind energy comes out the cheapest. So it’s an excellent deal for society and it is just something that we need to drive forward.”

In a bid to achieve its vision, EWEA wants the European energy union to deliver an end of subsidies for fossil fuels; an integrated electricity system operation; a pan-European approach to energy security; a clear and binding governance to steer change; and a sound Emission Trading System leading to a high and stable carbon price.

He says: “If the European Community was able to deliver on these, the welfare gains for European society would be enormous and wind power would reap the benefits.”

To conclude, Tardieu admits there is a degree of uncertainty over what will happen post-2020. “We have this 2030 Energy and Climate package which was agreed by heads of states and government in October of last year with a renewable energy objective of at least 27 per cent EU-wide.” He says that it is not exactly clear how this objective will be broken down, and what the governance system will be to ensure it is achieved. “This is really a critical point. Political certainty for such a capital intensive industry is phenomenally important.”