EN30 Renewable Electricity

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Electricity produced from renewable energy sources is generally considered environmentally benign with almost no COB2B emissions. An increased share of renewable electricity will thus help the EU to meet its Kyoto target. The EU has set an indicative target for the EU-25 of 21 % of gross electricity consumption to come from renewable sources by 2010.

Renewable energy makes an important contribution to meeting electricity consumption, with a share of 13.7 % in 2004. However, this share has only grown slightly since 1990 (12.2 %) despite increasing substantially in absolute terms. Total renewable electricity production grew by 49 % over the period 1990 to 2004, but this was only somewhat faster than the growth in electricity consumption itself (a 34% increase over the same period). In 2002, the share of renewables in gross electricity consumption declined quite substantially, by 1.5 percentage points (compared to 2001) with a similar lower level occurring in 2003 due to lower production from hydropower (as a result of lower rainfall). However, in 2004 the share of renewables in gross electricity consumption began to increase again. Strong growth in electricity production was seen from both wind and photovoltaics (by 32 % and 69 % from 2003 to 2004, respectively). However, hydropower still dominates renewable electricity production in most Member States with approximately a 70 % share across the EU-25 in 2004, compared to around 15.6 % coming from biomass and waste and 13.4 % from wind and the rest from geothermal (1.3 %), and solar (0.2%).

There are significant differences in the share of renewables between the EU-25 Member States. These reflect differences in the availability of natural resources in each country and the policies chosen to support the development of renewable energy. Amongst the EU-25 in 2004, Austria had the greatest share of renewable electricity, including large hydropower, in gross electricity consumption and the third highest share excluding large hydropower. Finland and Denmark show the largest shares of renewable electricity when large hydropower is excluded. Finland's high share is mostly due to electricity production from biomass and waste (but also hydro), while Denmark's renewable electricity is mainly produced by wind power and, to a lesser extent, biomass and wastes. In both these countries, government policies have been in place to encourage the growth of respectively biomass (Finland) and wind energy (Denmark) technologies. In absolute terms, Germany has the largest absolute production of renewable electricity excluding large hydropower, mainly from wind and biomass and wastes, which are both supported by premium feed-in tariffs for renewable electricity. If large hydropower is included Sweden, France and Germany have the largest levels of absolute renewable electricity production.

Within the new Member States, Latvia and Slovenia had the largest share of electricity from renewable energy in 2004, with most of this coming from large hydropower. Excluding large hydro, Slovenia has the highest renewable energy shares in electricity generation, originating mainly from small hydro and biomass and wastes. Only Poland and Latvia have measurable amounts of wind power, with significant growth only having occurred in the last couple of years. All the new Member States have challenging renewable generation targets and will need to make full use of their potential renewable energy resources to achieve these.

Member States use a variety of support schemes for the promotion of renewable electricity production, including: direct price support, where a payment is made directly by the utilities to renewable electricity producers for each unit of renewable electricity supplied to the national grid (for example feed-in tariffs in Germany, Spain, Denmark and the Czech Republic); market-based mechanisms such as trading of green or renewable energy certificates issued according to the amount of renewable electricity produced or sold into the grid to ensure that pre-determined quotas are met (for example in the United Kingdom, Sweden, Italy and Belgium); as well as general subsidies and loans to support the development and uptake of new technologies (EWEA, 2005). Many Member States have also introduced an energy or carbon tax (see EN32), for which some offer refunds or exemptions if renewable energy or energy efficiency projects are undertaken.

Despite the introduction of policies promoting the development of renewable energy in all EU-25 Member States, substantial additional production will be required to meet the EU-25 renewable electricity indicative target of 21 % by 2010 set in Directive 2001/77/EC, particularly given the expected increase in gross electricity consumption over this period (see EN18). While large hydropower accounts for almost two-thirds of renewable electricity production, it is unlikely to increase substantially in the future due to environmental concerns and a lack of suitable sites, particularly within EU-15. TFor example, the Water Framework Directive (2000/60/EC) places a greater emphasis on the protection of the environment, in particular the river morphology (i.e. shape of the river bed and adjacent zones) as a subject of protection, and due to the obligation to prevent any further deterioration it is likely that the construction of new hydro-power plants will become more difficult. TSome of the new Member States, such as Slovenia, do intend to increase their large hydro output significantly but the effect of this on overall EU-25 hydro capacity is still likely to be small. Other renewable energy sources, such as wind, biomass, solar and small-scale hydropower will therefore have to grow substantially if the 2010 target is to be met. In order to increase the use of bioenergy, the Commission recently issued a biomass action plan (EC, 2005b).

The 2004 communication from the European Commission expects the share of renewable electricity for the EU-15 at between 18 and 19 % in 2010 on the basis of currently implemented policies (EC, 2004), still short of the 21 % indicative target. While Denmark, Germany, Spain and Finland are seen as being on track to meet their individual 2010 targets, and Austria, Belgium, 4 EN30 Renewable Electricity Ireland, the Netherlands, Sweden, the United Kingdom, and France are about to be on track, Greece and Portugal are considered not to be on track. Evaluations from the European Commission recently concluded that European states need to step up efforts to cooperate among themselves and fine-tune their support schemes as well as to remove administrative and grid barriers for green electricity (EC, 2005). The Commission concluded that it is not appropriate to present a harmonised European system at this stage.

More recently (10/01/2007) the Commission issued a report on the progress made towards the 2010 renewable electricity target, showing that the overall share of renewable electricity will fall just short of the target, reaching 19% by 2010.

Energy projections derived from the PRIMES energy model (European Commission 2006) forecast a similar development of renewable electricity production in gross electricity generation, reaching around 18 % by 2010 for the EU-25. After 2010, the baseline projection shows the rate of increase in renewable energy production slowing, so that by 2030 the share of renewable electricity in gross electricity consumption would be approximately 28 %. In a carbon-constrained Europe with a limited growth in electricity consumption, the share of renewable electricity would grow substantially compared to the baseline, but still remain below 30 % (EEA, 2005). If additional policies to support renewable energies were introduced, the share of renewable electricity in total electricity consumption could be expanded rapidly, primarily through greater use of wind, biomass and waste (EEA, 2005).

Outside of the EU, Norway produces virtually all its renewable electricity from hydropower, with production often exceeding gross electricity consumption, as some hydroelectricity is exported. Iceland also has a very high share of renewables, with almost 100 % of total electricity consumption being provided by large hydro and geothermal sources. Renewable electricity production is also important in Romania and Turkey, mostly through the exploitation of large hydro.