Wind industry chiefs at the EWEA conference in Paris this week spoke of the importance of a legally binding EU target for renewable energy during a discussion on the prospects for wind power in winning business from the corporate world.
The panel debate saw E.ON Climate and Renewables chief operating officer Michael Lewis (right) tell wind power professionals that Europe has to set a strict set of targets for post 2020.
“Look at America. Obama’s Clean Energy plan will not be voluntary. If you want to set and achieve targets, you have to make them mandatory,” he said
In October of last year EU leaders committed to increasing renewables by at least 27 per cent but a “flexibility clause” was added which made it possible for the European Council to return to the targets after the UN summit in December 2015.
Industry heads are keen to see that option taken up, adjudging present terms to be too weak.
EDPR chief operating officer Joao Paulo Costeira said, “A non-binding target is a contradiction in terms. Targets post-2030 need to be binding; that is how it will work best.”
STRICTER GOVERNANCE VITAL
Massimo Derchi, Managing Director of Italy’s ERG Renew said the answer lay in what member states were prepared to accept in their collective relationship with Europe in the energy sphere.
“The energy union package is great and ambitious but the big question is the targets. In achieving those targets, the only way is to have strict governance. It’s in the hands of the member states to accept broader EU governance.”
Costeira added during what was Wednesday’s plenary discussion that uncertainty and the subsequent inability to facilitate investment was a real obstacle for the sector.
He also referred to the challenge the industry faced in terms of grid readiness.
“Why bother doing the interconnections if you don’t know what happens at the other side? We need the same level of trustworthiness as seen in US and in some countries in Europe but unfortunately it is not the same everywhere. Within France you know what you are getting when planning to invest but there is no certainty between Spain and France- – until that is addressed skip interconnections.”
LIGHT TOUCH REGULATION
The dialogue and audience interaction was part of an overall discussion entitled, Wind Energy –Turning Blue Chip Companies Green, with panellists including Google’s Director of Global Infrastructure, Francoise Sterin (left) assessing how the wind industry can better attract corporate clientele.
Google is by far the biggest corporate user of wind power in the US with 850 MW to date, and the likes of Microsoft and Mars a distant second and third in that pecking order.
Sterin said the strong culture of corporate social responsibility across the corporate world would continue to facilitate the desire for renewable power, even in the absence of binding targets in some jurisdictions. He also pointed to Scandinavia as an example of the structures that attracted Google to power its data centres there through wind. They currently account 170 MW of Swedish wind energy.
“In the Nordics there is no need for a license – any company can buy renewables and that soft regulatory approach helps. The Nordic energy system is very integrated and if the EU as a whole was the same it would be the ideal so all the talk around energy union is very important to us – corporate buyers can get more volume for better terms- shifting where we need the capacity.”
CAUTION ON AUCTIONS
Meanwhile the subject of auctions as a means of integrating corporate interest sounded a word of caution from Derchi.
“Auctions can be a successful instrument but the devil is in the detail and they have to be formulated very carefully, with the first issue being how the auctions are designed- For a specific example look at Italy – with auctions to build 1 GW per year. As a matter of fact once the auctions were introduced they were fully subscribed and only 25 per cent of the projects subscribed have been built for specific reasons.”
“Why –the contractor must have the financial and technical ability otherwise you have players who want the incentive from the auction and try to sell the project afterwards.”
“To sum up nobody is questioning auctions but they have to be very carefully designed and planned – we need certainly and the knowledge that every megawatt put on auction will be built.”
“If you don’t have that the fear is the growth will no longer be there and the ability to meet the 2020 targets might be impaired.”
Later Costeira said the emergence of financial institutions, such as Allianz into the space presented a new challenge.
“It big time really changes the game for companies like us. We can’t compete on the costs of capital. It’s almost impossible in most countries in Europe to compete with the likes of Allianz. Companies like ours who want to keep developing in Europe have to do more Greenfield.”
[bc_video account_id=”” player_id=”” video_id=””]