Renewable Energy Sources in EU - Current status, future developments and challenges

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1 Renewable Energy Sources in EU - Current status, future developments and challenges Kostantinos D. Patlitzianas, Argyris G. Kagiannas, John Psarras Decision Support Systems Lab (EPU-NTUA) National Technical University of Athens School of Electrical and Computer Engineering 9, Iroon Polytechniou str., Zografou, Athens, Greece Tel: / Fax: / kpatli@epu.ntua.gr ABSTRACT The share of RES in gross inland consumption of the EU is estimated to increase from 5,3% in 1992 to 6,2% in Even by 2030 RES are estimated to be less than 7% of the EU energy consumption. The strategy and action plan in the White Paper is directed towards the indicative objective of 12% penetration of RES in the EU by In addition to these, the national indicative targets should be consistent with an increase in the share of electricity generated from RES in the EU from 13,9 % in 1997 to 22,1 % by The development of RES is a central aim of the EU s energy policy, because RES has an important role to play in reducing CO 2 emissions - a major EU objective. Increasing the share of RES in the energy balance enhances sustainability. It also helps to improve the security of energy supply by reducing the Community's growing dependence on imported energy sources. Moreover, RES are expected to be economically competitive with conventional energy sources in the medium to long term. This paper presents an overview of RES in the EU as regards the current status and the future developments. Keywords: Renewable Energy Sources, EU, Solar, Wind, Geothermal, Biomass and Hydro. 1. INTRODUCTION International energy developments depict a future in which energy use continues to grow inexorably, fossil fuels continue to dominate the energy mix and developing countries fast approach OECD countries as the largest energy consumers. International projections raise serious concerns about the security of supply, investment in energy infrastructure and the threat of environmental damage caused by energy production. Renewable Energy Sources (RES) are plentiful and will be more widely used. Beyond 2020, new technologies, such as hydrogen-based fuel cells and carbon sequestration, hold out the prospects of plentiful, clean energy supplies in the world. More specifically, the European Union (EU) accounts for only 6,4 % of the world s use of RES. Despite this low figure, however, the EU is a world leader in terms of RES technology. The situation varies between individual Member States and current results are generally a long way short of the targets set. Nevertheless, significant progress has been made in recent years. [1-2] Renewable Energy Sources in EU - Current status, future developments and challenges Page 1

2 Nowadays, there is a great deal of information about the development and increased production of our global energy needs from alternative energy sources in the EU. Solar energy, wind power and hydropower are all traditional sources of alternative energy that are making progress. Despite falling costs, wind energy remains more expensive than conventional energy sources, therefore cost continues to be the most serious barrier to its further development. The wind industry will continue to rely on public support for the short to medium term. In addition to this, hydroelectric power is harnessed in several different methods. The most popular is through dams. Biomass or energy from burning plants and other organic matter is one of first sources of energy. Wood was once the main source of power for heat, and it still is in many developing countries. [3] 2. CURRENT STATUS In 2000, RES accounted for approximately 13,8% of the Mtoe of Gross Inland Consumption in the world. Combustible RES and waste (97% of which is biomass, both commercial and non-commercial) accounted almost 80% of total RES followed by hydro (16,7%). [1] It is expected that, the world share of RES would decline from 13,8% in 2000 to 12,5% in In the OECD, the share of RES will continue to increase from 6,4% in 2000 to a projected 8% in Most RES will be used for power generation (72% in 2000, 75% in 2030). [2] More specifically, RES started to be developed when the oil crises of the 1970 s made aware of the fact that fossil resources would run out one day - but since there is some uncertainty about when that will actually happen the efforts made in this area remained rather tentative in the EU. Nowadays, the firewood and hydroelectricity play a modest role in the European economies. They represent a more significant share in the applicant countries, and in some isolated regions, such as islands, are the only source of energy. Nevertheless, they have the potential to play a much larger role in both the economy and the energy balance. Figure 1 presents the 15-EU Primary Energy Production of RES in [5] Wind 2,3% Solar 0,5% Geothermal 4,2% Hydro 33,2% Biomass-Waste 59,8% Figure 1: Primary Energy Production of RES (2000) Table 1 presents the share of RES in Gross Inland Consumption and in Electricity Generation for 1999, as reported in the documents of the Eurostat. [5] Renewable Energy Sources in EU - Current status, future developments and challenges Page 2

3 Table 1: Share of RES in Gross Inland Consumption and Power Generation (1999) Country % Gross Inland Consumption % Power Generation Austria 23,3 54,0 Belgium 1,5 2,7 Denmark 8,6 13,6 Finland 22,5 19,3 France 7,2 7,4 Germany 2,9 4,2 Greece 5,7 4,6 Ireland 2,1 2,8 Italy 8,2 15,1 Luxembourg 1,4 29,0 Netherlands 2,4 7,9 Portugal 13,1 18,0 Spain 5,8 7,3 Sweden 26,9 33,9 UK 1,2 2,4 TOTAL 15-EU 6,1% 10,9% Sources: Eurostat, In June 2001 the Gothenburg European Council confirmed that the enlargement process was irreversible. So, 13 countries have applied to become new members. The energy share of the total primary energy supply in these countries is heavily based on fossil fuels, mainly solids and oil. Electricity production is mainly produced from fossil fuels and nuclear plants. It is important to mention that the above countries concerned began to take concrete measures in the promotion of RES since 1997, mainly due to the proximity of an accession to the EU, when the Luxembourg European Council agreed on starting the enlargement process and the EU While Paper was published. 3. RES POLICIES AND STRATEGIES The development of RES - particularly energy from wind, water, solar power and biomass - is a central aim of the European Commission's energy policy. There are several reasons for this: RES has an important role to play in reducing CO 2 emissions - a major Community objective. Increasing the share of RES in the energy balance enhances sustainability. It also helps to improve the security of energy supply by reducing the Community's growing dependence on imported energy sources. RES are expected to be economically competitive with conventional energy sources in the medium to long term. The main issues in this field can be resumed in the Energy Papers of the European Commission. In addition to this, there is the Directive 2001/77/EC, on the promotion of electricity produced from RES in the internal electricity market - EU directive for RES-EU (2001). European Commission has also adopted important Programmes for supporting RES development. More analytically: Energy Papers of the European Commission: White paper for a Community Strategy and Action Plan for RES. Renewable Energy Sources in EU - Current status, future developments and challenges Page 3

4 In the White Paper «Energy for the future: Renewable sources of energy» (1997) the European Commission defined a strategy and an action plan to promote the market penetration of RES. In order to implement the strategy, concrete measures are proposed. The Action Plan sets out individual actions by categories, and indicates the form of each action. Actions were attributed to the EU and most of these actions have already been initiated. [6] Green Paper «Towards a European strategy for the security of energy Supply». The Green Paper Towards a European strategy for the security of energy Supply was adopted by the European Commission on November There are four main reasons why it was necessary for the EU to launch this Green Paper on the security of energy supply as follows: [7] o The Union's increasing dependence as regards its energy supplies. o The disturbing consequences (oil prices volatility). o The new challenges to face like climate change and internal energy market changes, no discussion about energy supply has ever really taken place and the need of a comprehensive through-going discussion. RES Directives: Directive 2001/77/EC, on the promotion of electricity produced from RES in the internal electricity market: The Directive 2001/77/EC, aims to create a framework for electricity from RES, which will contribute towards achieving the indicative target of a 12% renewable share in gross inland energy consumption by The Directive requires Member States to take appropriate steps to encourage greater consumption of electricity produced from RES by setting and achieving annual national indicative targets consistent with the Directive and national Kyoto commitments. The national indicative targets should be consistent with an increase in the share of electricity generated from RES in the EU from 13,9 % in 1997 to 22,1 % by [8] EU Biofuels Directive: The EU Biofuels Directive requires the EU Member States, by July 2005 or earlier: o To set indicative targets for the use of biofuels and other renewable fuels (which may include renewable hydrogen) to be met by end 2005; o By 2006, to set indicative targets for 2010, which will be assessed against the Directive's 'reference targets' of 2% by 2005 and 5,75% by RES Programmes of the European Commission: Altener Programme; Intelligent Energy for Europe; Concerto Programme. Renewable Energy Sources in EU - Current status, future developments and challenges Page 4

5 4. FUTURE DEVELOPMENTS AND CHALLENGES The supply of RES is expected to increase modestly despite the very limited growth in hydro and biomass after Waste as well as wind energy are expected to grow significantly. The use of wind is estimated to expand by nearly 20% per year in the period and by over 7% per year after Similarly, solar power is projected to grow by an average 6% per year over the outlook period. However, RES as a whole will remain a small part a small part of the overall primary energy supply of the EU. [4] Table 2 indicates that the share of RES in gross inland consumption of the EU is expected to increase from 5,3% in 1992 to 6,2% in Even by 2030 RES are estimated to amount to less than 7% of the EU energy consumption. Biofuels and hydrogen are not expected to emerge as significant contributors to the EU energy balance. There are large differences among individual 15-EU countries regarding the use of RES. As a share in total primary consumption, RES accounted for more than 20% in Sweden, Austria and Finland but less than 3% in Belgium and the UK among other EU member states. The use of RES will continue to be concentrated in the electricity and steam generation. Under baseline assumptions, the only noticeable alternative use of RES is the continued use of biomass by rural households. [4] Table 2: % Share of RES in Gross Inland Consumption of 15-EU Hydro 1,8 1,7 1,8 1,9 Biomass and Waste 3,2 3,4 3,5 3,8 Other (wind, solar, 0,2 0,6 0,9 1,2 geothermal) Total RES 5,3 5,7 6,2 6,8 In Mtoe 72,1 88,2 99,7 108,4 Source: EU Energy Outlook to 2020 In order to have a complete understanding of the RES prospects in EU, an analysis of each RES will be presented: 3.1 Solar Energy Photovoltaics At the end of 2000, the EU s photovoltaic capacity amounted to 183,5 MW, i.e. an increase of 43,6% with respect to In light of current growth, a 485 MW total installed capacity could be reached for the EU for This date corresponds to the end of the Campain for Take-Off initiated in 1999 by the EC, which set a target of 650 MW installed capacity. [9] Solar Heating The reactivation and stimulation of the thermal solar energy sector is confirmed in the EU. The benchmark of one million square meters being installed in one year has now been passed. Renewable Energy Sources in EU - Current status, future developments and challenges Page 5

6 The estimates collected for the year 2000 report that m 2 were newly installed in the countries of the EU. Thermal solar energy sector development prospects remain good for the years to come. Taking the efforts of each country into consideration, European capacity should reach 80 million m 2 in 2010.This total figure is, however, below the EU objective, which targets 100 million m 2 being installed by this date. [4] 3.2 Wind Energy In view of its excellent growth figures and its economic success, wind power is playing a leading role in the development of renewable energies. The EU has maintained a very high wind power sector growth rate, which now represents more than 67% of newly installed capacities worldwide, i.e. a supplementary installed power capacity of the order of MW. Germany remains the uncontested leader with a total cumulated capacity of MW, i.e. more than one third of installed worldwide capacity. Associated with a strong political will, it has permitted installation of an additional MW, i.e. a growth of 43,7% with respect to the previous year. The progression of wind power in Spain has also been spectacular. With an additional MW of wind turbines in operation at the end of the year 2001, the country has consolidated its second European position. The Danish situation is a more worrying one. Uncertainties concerning future financial incentive mechanisms is slowing down wind power development (an additional 120 MW in 2001 vs. 555 MW in 2000). 3.3 Small Hydro Energy The EU s resources are very substantial. A recent study carried out by the ESHA (European Small Hydraulic Association) estimates the potential which is still available in terms of microhydraulic power plants (<10 MW of unitary power capacity) at MW (including MW which could come from an increase in the capacity of existing plants and MW from new installations). [9] The European experts who were questioning in the scope of BluEAGE (Blue Energy for A Green Europe) estimate micro hydraulic installation capacity at MW in 2015, i.e. an average annual growth rate of 1,51% per year with respect to [4] 3.4 Bioenergy In the EU, it is estimated that 58% of the primary energy supplied by the different renewable energy sectors comes from wood. In this way, far from the media impact of wind turbines or the imposing power of large-scale hydraulic dams, the wood energy sector is based on an ancient and traditional exploitation of the potential of the European forest (more than 100 million hectares). France is one of the countries that produces the most primary energy from wood. In 2000, it is estimated that 9,8 Mtoe were produced in this way. The other big wood energy countries in Europe are Sweden (8,3 Mtoe) and Finland (7,5 Mtoe). [10] 3.5 Geothermal Energy Geothermal energy is composed of two sectors that are characterised by different technologies and applications: the production of electricity (high and medium temperatures) and the production of heat (low and very low temperatures). Renewable Energy Sources in EU - Current status, future developments and challenges Page 6

7 For very low temperature geothermal energy (geothermal heat pumps), if the sector maintains its 2000 market volume for 10 years, it could reach a total capacity of MWh in The White Paper provides for a geothermal energy contribution for the production of heat amounting to MWh at the end of the year 2010, divided equally between low temperature geothermal energy and geothermal heat pumps. 5. CONCLUSIONS EU Member States have made huge strides towards clean and safe energy supply, often for different reasons while using different policies and mechanisms. The studies that have been carried out indicate that the energy-policy measures taken so far have had a positive impact, they have played a major role in promoting the introduction of innovative technology, exports and the restructuring of energy economy, while helping to reduce the energy sector's emissions into the environment. However, there is still a long path to cross for the achievement of the targets in [11] Moreover, promotion of RES at a regional level is more effective and efficient. It is better to successfully focus in small-scale projects, involving few actors, than to promote long scale projects that tend to lead to less successful results. The promotion of RES must be taken into account in all strategies and policies, as a continuous long-term task in EU. In addition to this, communication must be considered as one of the most effective tools to raise awareness for RES in the society. Therefore, communication should be integrated in all energy strategies from the very beginning as a key element. Market actors, agencies, professional associations and dissemination organizations should be encouraged and economically supported to commit themselves to ensure continued communication through time as one of their main activities. Renewable energy projects are generally of a smaller scale than conventional energy projects and consequently cannot benefit from economies of scale to the same extent. In relative terms, they also have high capital costs, which need guarantees of long-term stable income streams to ensure financial viability. It is therefore important that the non-technical frameworks, which are in place, do not discriminate against these kinds of projects but enable them to be brought forward as attractive and financially viable schemes. To sum up, the development of RES - particularly energy from wind, water, solar power and biomass - is a central aim of the EU s energy policy, because RES has an important role to play in reducing CO 2 emissions - a major EU objective. Increasing the share of RES in the energy balance enhances sustainability. It also helps to improve the security of energy supply by reducing the EU s growing dependence on imported energy sources. Moreover, RES are expected to be economically competitive with conventional energy sources in the medium to long term. Renewable Energy Sources in EU - Current status, future developments and challenges Page 7

8 REFERENCES [1] International Energy Agency, Renewable in Global Energy Supply, [2] International energy Agency, Renewable Information 2002 with Data 2000, [3] Energy Information Administration, Annual Energy Outlook 2002 with projection to 2020, USA, December to [4] European Commission, Energy in Europe EU Energy Outlook to 2020, Belgium, November [5] Eurostat, Energy and environment indicators - Data , [6] European Commission, Communication from the Commission Energy for the future: renewable sources of energy White Paper for a Community Strategy and Action Plan, [7] European Commission, Green Paper Towards a European strategy for the security of energy Supply, [8] Official Journal of the European Communities, DIRECTIVE 2001/77/EC of the European parliament and of the council of 27 September 2001 on the promotion of electricity produced from RES in the internal electricity market, [9] Ecofys-European Commission's Directorate-General for Energy Implementation of RES in the EU until 2020, [10] UN-ECE Timber Committee, Impact of renewable energy & climate policies on the industry s raw material supply, [11] Dess Economie ET Politique DE L Energie, Gestion Des Nouvelles Technologies De l Energie, Overview of current Renewables Energy Policies in the EU and Candidate Countries and Assessment of Successful Programs and Strategies Implemented in some EU Member States, Renewable Energy Sources in EU - Current status, future developments and challenges Page 8