Answer to Europe’s Energy Future is Blowing in the Wind

Wind Farm at SunsetLast week the European Wind Energy Association (EWEA) offshore wind conference in Amsterdam certainly threw up some dilemmas about Europe’s energy future. The overwhelming feeling amongst the senior conference delegates was that the renewable energy debate has to be won or else the whole industry will fail.

The take-home was that if electricity can’t be delivered reliably and competitively, then politicians and governments will pull the plug on the desire for offshore wind energy as well as the funding mechanisms that go with it!

The industry wants to see a cost reduction and to make sure that this can happen it wants clean energy targets not just to 2020 (which will take us from 4GW’s to 40 GW’s) but way beyond, right up to 2040 (to hit 130 GW’s) in order to maintain investment, research and development and begin to achieve economies of scale. Before you think this is the Renewables lobby trying to write its own bank account read on…

Economies of Scale

The cost debate can be a rather confusing one, with a massive consensus that the costs have to come down, but disagreement on how it will be done and what will drive the price reduction. It seemed to me that most commentators see the costs only reducing through economies of scale, which in themselves, can’t be achieved overnight.

The real nuts and bolts rely on some clear observations that the ultimate driver for sustainable clean fuel free renewable energy has to come from benefiting the consumer, you and me, with a lower price for electricity.

That means we have to have systematic change to the risks in the system by having less demand for coal, gas and nuclear and a full transition to sustainability that also targets more jobs and employment in a tough European economy.

Embrace Home-Grown Energy!

Brussels should understand that Europe spends billions on fuels from other countries and from other sources, often in unstable territories and markets. The call was, embrace Europe and embrace the indigenous renewable energy and wind energy that is freely available!

To illustrate the point, fossil fuel prices have hit an all-time high and, with the world in its deepest recession for decades, the International Energy Agency (IEA) report on a clean energy revolution makes awkward reading, not least because of the hundreds of millions of dollars given to support mature industries that burn fossil fuels.

According to a Reuters article, the IEA claims that “global subsidies for fossil fuel consumption are set to reach $660 billion in 2020 unless reforms are passed to effectively eliminate this form of state aid.”

Could Renewables Power Eurozone Recovery?

The energy watchdog is quoted in the same article as saying that “governments and taxpayers spent about half a trillion dollars last year supporting the production and consumption of fossil fuels.”

Can that be true? If it is, reducing some of the half a trillion dollars spent and redirecting it to a renewable future would be a great help to the economic growth and increase in productivity needed to push Europe out of its current slump.

About Michael Buckle

Michael is an Executive Director of Global Markets and leads Willis' Renewable Energy practice. Based in London wit…
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