Paudge Connolly (Cavan-Monaghan, Independent)

The March European Council meeting was dominated by the development of an energy policy for Europe. With climate change such a pressing and visible issue, it is no surprise that the question of renewable energy targets form the core of the Council's recommendations. The Council's plan encompasses the opening up of gas and electricity markets, security of supply, energy efficiency and renewable energy, and research and development of energy efficiency technologies.

The reaction of European businessmen to the ambitious plan to cut CO2 emissions by 20% by 2020 not surprisingly has been somewhat dubious. To put the 20% target into perspective, in 2004 13.7% of the power generation from the 25 member states came from renewable sources. That 13.7% figure has not changed much in the past 15 years, and 70% of that power generation came from hydropower.

The EU's drive to increase renewal power output to 20% of all energy production is made more difficult by the inevitable time lag before any concerted action is taken. Essentially, the announcement by the Council is a direction to the Commission to prepare some practical mechanism for implementing a broad policy objective on renewables. That will take at least one year following which the mechanism — perhaps an EU directive — will go to the European Parliament for adoption after the inevitable series of political compromises. That will take another year or more.

The question then arises of making renewable power generation mandatory. The European Stability and Growth Pact is a reminder of the difficulty involved in managing binding targets. That practical mechanism will of necessity prove to be extremely complicated. Land-locked nations without mountains lack easy access to renewable resources such as wind or hydropower. The 2020 goal, therefore, must take into consideration the construction of new interconnection capacity and the measurement of imported renewable power across countries.

Business executives are concerned that the EU's pledge could not only stifle economic growth but also prove pointless if other industrial nations do not follow suit. In Sweden, the chief executive of the state-owned energy giant, Vattenfall, agreed that the EU's commitment to cutting carbon dioxide emissions required action in the form of technology development. He said that unless there is much improvement in the way carbon emissions are captured and stored there is no way to solve the problem. He also stated that he does not believe China and India will stop building coal-powered plants to wait for Europe to build the technology.

The European Commission believes that energy security and climate change are two sides of the same coin in that the development of renewable technology such as wind, solar and hydropower energy should increase security of supply. The European Commissioner for Energy said recently that the indigenous oil and gas supply is reducing. He also said that with fewer carbon needs a market is created that favours the development of new technology, with less carbon meaning more energy security. He further added that unless Europe makes a greater shift to renewables, it will be forced to continue paying even higher prices for petroleum products. That will entail creating a new mechanism to enforce tough mandatory targets for renewable power generation to reach the 20% EU renewable power generation target by 2020. However, the European Council could have done more to make the existing emissions trading scheme work. That is an effective mechanism to encourage renewable energy generation in Europe. The European Commission should contemplate setting up a different structure when the current one, compared to the many alternatives, has been allowed to falter badly.

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