Europe's Energy Challenge: The Role of Renewables

By Philip Lowe, Director General, European Commission, DG ENER
Spring 2013

Since the adoption of the Renewable Energy Directive, the EU has come a long way in establishing a stable and market-oriented framework for increasing the share of renewable energy. This not only contributes to the reduction of greenhouse gas emissions, it also helps maintain and increase European competitiveness, by reducing import dependency and triggering technology innovation and the creation of new products for a rapidly growing global market.

The growth rate of renewables in Europe has continuously accelerated under the current regime of binding targets. From 4.5% p.a. in the last decade it should reach 6.3% in the period 2010-2020. The overall share of renewable energy in gross final energy consumption has already reached 12.4%. So far we are on track to reach the target of 20% in 2020. Importantly, the 20% target is based on total energy consumption, including the heating and cooling sector for the first time.

At present, almost 50% of the total energy consumed in Europe is used for the generation of heat and for cooling for either domestic or industrial purposes. In households this figure even reaches around 80%. Today we manage to source 14% of this demand from renewable energy. But the potential is much higher. Renewable heating is still dominated by the use of biomass a fuel used since ancient times but nowadays increasingly efficient thanks to new heating and cooling technologies. Other technologies such as geothermal heat, heat pumps and solar thermal heat collection currently only provide a small fraction of the heat from renewable sources.

This leads to two main challenges. We will have to enable the production of high quality biofuels from secure and sustainable supplies and delivered by optimally-integrated solutions for households, industry and district heating and cooling. With regard to other technologies like solar thermal heating or geothermal energy, deployment needs to be further accelerated. Ongoing activities such as the Renewable Heating and Cooling Technology Platform under the European Strategic Energy Technology (SET) Plan aim to help this by bringing together all stakeholders concerned.

Also we need to ensure that these technologies and their specificities are taken into account when national and local authorities plan, build and renovate industrial or residential areas. This issue is explicitly addressed by several pieces of European legislation, in particular the Renewable Energy Directive, the Energy Performance of Buildings Directive, and the Energy Efficiency Directive. The third, which entered into force in December last year, also requests Member States to establish a long-term national strategy for national building stocks an exercise which will include a comprehensive assessment of the potential for high efficiency cogeneration and efficient district heating, e.g. through heat production from renewable energy sources. Based on this, Member States will then be requested to lay out strategies, policies and measures that may be adopted up to 2020 and up to 2030.

Recent policy measures in the UK follow a similar rationale and represent a good example of how to approach the greening of the heating sector: the UK set out a clear national strategy, the "Strategic framework for low carbon heat in the UK" which was published last March, and aims to stimulate the market through a robust legislative framework, such as the Renewables Heat Incentive for non-domestic applications and its extension to householders, which is currently under discussion. These measures were desperately needed, as the UK still trails far behind other Member States with the share of renewables for heating and cooling amounting to less than two per cent.

With the European legislation recently adopted, the creation of a comprehensive European framework for an efficient and sustainable heating and cooling sector is now complete. These policies are designed to give the market the attention it deserves.