Wind energy and EU climate policy

November 9, 2011 | 00:00

Wind energy and EU climate policy

Achieving 30% lower emissions by 2020. A report from the European Wind Energy Association.

Executive Summary.

In 2010 the total installed wind power capacity in the EU stood at 84 gigawatts (GW). In a normal wind
year this would produce 181 terawatt hours (TWh) of electricity. Wind energy production does not emit any greenhouse gases (GHG), unlike coal, gas and oil. Because of the way the electricity market operates – using marginal costs rather than full investment and operation costs – wind energy replaces a mix of gas, coal and
oil generation. The European Commission estimates that these three technologies emit on average 696g CO2/kWh in 2010. 181 TWh of wind energy production would therefore have avoided a total of 126 million tonnes of CO2 (MtCO2) in 2010.

As party to the Kyoto Protocol, the EU-27 committed to reduce emissions by 7.8% compared to 1990 levels with at least 50% of these reductions to be made inside the EU – so called domestic reductions – while the rest can be achieved by purchasing credits from projects outside the EU via the Clean Development Mechanism or Joint Implementation (CDM/JI), otherwise called offsets. Wind and other renewable energy emissions reductions are domestic reductions, made in the EU. Comparing the Kyoto Protocol targets with CO2 avoided by wind energy, we find that in 2010, EU wind energy avoided as much as: 28% of the EU’s Kyoto reduction target (or 56% of the EU’s domestic reductions target)

The EU’s current overall GHG reduction target is set at 20% for 2020 and allows for about 60% of total emissions reductions to come from offsets. Hence the EU’s domestic reduction target is only 40% of the overall 2020 target. It represents a decrease in emissions of about 1,113 Mt compared to 1990.

EWEA’s baseline scenario for wind power development to 2020 forecasts 230 GW of installed capacity, producing 581 TWh of electricity and avoiding 342 MtCO2. As a proportion of the EU’s emissions reduction target, EU wind energy production should avoid as much as: 31% of the EU’s 20% emissions reduction target
(77% of EU domestic reductions), 20% of a potential 30% emissions reduction target (51% of EU domestic reductions). Adding avoided emissions from other renewables makes the picture even clearer, even without taking energy efficiency into account: by 2020 renewable power generation as forecast by the 27 national governments of the EU should avoid 530 MtCO2, equivalent to: 48% of the EU’s 20% reduction target (119% of EU domestic reductions); 32% of a potential 30% emissions reduction target (79% of EU domestic reductions).

The figures above compare wind power avoided emissions with the entire EU reduction targets, across all economic sectors. While the EU has no target for the power sector alone, the ETS sets a cap for power sector and heavy industry together – a 21% reduction from 2005 levels, allowing a 50% use of offsets. Comparing the CO2 avoided from wind turbines installed in the timeframe covered by the ETS targets (2005-
2010/2020), we find that turbines installed since 2005 avoided: In 2010 - 78 MtCO2, equivalent to 83% of ETS
required reductions. By 2020 - 301 MtCO2, equivalent to 64% of ETS target (20% overall EU target); 53% of ETS target (30% overall EU target) 107% of ETS domestic effort (30% EU target).

Based on these findings, EWEA makes the following policy recommendations for 2020.

- Moving to a 30% domestic reduction target – an achievable goal, beneficial to the EU economy

The figures above make very clear that wind power will account for a significant part of the EU effort to reduce emissions. So significant, that even with a 30% target, and with the current rules on access to offsets, wind power alone can meet over 100% of the domestic ETS reduction effort. Renewable electricity generatio can achieve above 100% of the domestic EU-wide reduction effort with a 20% reduction target and 79% with a 30% target. This would leave just 21% of the domestic effort to be met by other sectors/technologies, given constant production output, and potentially less if the national renewable energy targets are exceeded, as foreseen by the renewable industry – a very achievable objective.

Reducing emissions stimulates the EU renewable economy. There is now a widespread consensus that
the development of resource-efficient and green technologies will be a major driver of growth (EU Commission, 2010). The EU has been the cradle of renewable energy innovation, particularly wind power, and the European wind industry represents a growing number of jobs (188,000 in 2010), significant and growing export opportunities, as well as increased energy security and competitiveness. But this advantage is being challenged, and climate targets are key to keep EU investors on the renewables track.

- Tightening the Emissions Trading System to avoid oversupply and a low CO2 price The economic crisis has undermined the effectiveness of the ETS as a tool to shift Europe away from fossil fuels towards a renewable, zero-carbon power sector. Reduced demand during the crisis meant reduced production which in turn also meant reduced real emissions. Because real emissions were well below the amount of freely allocated allowances heavy industry sectors received, it generated a surplus that could be sold or kept for later use. This created vast windfall profits for heavy industry and cheap business-as-usual solutions for the power sector, which didn’t make the necessary investments in renewable technologies.

To avoid oversupply on the carbon market and change investment patterns in the power sector, the EU must
raise the current GHG target to 30% domestic reductions by 2020, or at minimum increase scarcity on the
carbon market by setting aside a certain number of allowances to be cancelled at a later stage.

- Committing 100% of ETS auctioning revenue to finance a shift in production With auctioning in the power sector, additional yearly revenues worth up to €50bn will accrue to Member States’ budgets. It is essential that 100% of these new funds are directed toward mitigating climate change through, for example, the development and deployment of renewable energy technologies and modern electricity infrastructure, and that existing budget lines cannot be counted towards achievement of this objective.

To read the full report, click here.

 

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