Spending on renewable energy needs to double to €70 billion per year if the European Union is to meet its targets, the European Commission said today (31 January).

“We are on track, but we have to step up the pace,” Günther Oettinger, the European commissioner for energy, said this morning, as he published a progress report on the EU’s plan to get 20% of its energy from renewable sources by 2020.

According to the report, member states are on course to exceed this goal, despite the fact that nearly all countries missed (non-binding) targets in 2010.

But Oettinger said that the EU had to close “the financing gap” and step up investment to meet the 2020 targets. Annual investment in renewable energy would have to rise to €70bn in the next few years, he said, compared to €35bn spent in 2009.

The bulk of investment is expected to come from the private sector, but public loans, grants and guaranteed premium prices for renewable energy (feed-in tariffs) are expected to continue to play an essential role in stimulating finance. The Commission is calling on governments to improve their renewable-energy support schemes and collaborate more with each other on renewable energy projects and financial-support schemes. The Commission estimates that more collaboration could reap savings of €10bn per year.

Oettinger also warned governments against making retrospective changes to feed-in tariffs. “The industry making the investment has the right to predict what the future will bring. We will not accept retroactive, retrospective changes,” he said.
 
In the long-run the Commission would like to see more collaboration between national governments, with joint support schemes and common feed-in tariffs. However, Oettinger said that the Commission would not interfere in national schemes.

The European Renewable Energy Council (EREC), the pan-European group for the industry, gave the report a cool reception. The report “is disappointing when it comes to new, innovative ideas regarding financing of renewables,” said Arthouros Zervos, EREC’s president. “Instead of continuous debates about national support mechanisms…the focus should be on renewing and enhancing Europe’s outdated and poorly interconnected infrastructure and making new, innovative proposals on how to leverage more private investment for renewables in times of limited public resources.”

Germany, Hungary and Sweden are the EU’s renewable-energy leaders, according to the report. They are the only three countries to meet their 2010 targets to increase the share of renewable energy in electricity generation and transport fuel. In total, seven countries reached or exceeded the target on electricity and nine did so on transport fuel.

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