Asked by moderator Roger Harrabin, Environment Analyst at BBC News, whether the EU’s target of 20% renewables by 2020 is feasible, Giovanni Federigo De Santi, Director at the Institute for Energy (IE), JRC – European Commission, admitted that the target is ambitious, but as it is a mandatory target it has to be met.
Member states have until June next year to present individual action plans to the EU for meeting the renewable energy target, and these plans will become mandatory.
De Santi also emphasised that the 20% renewable energy target is not just for electricity, but energy overall including heating/cooling and transport. To reach the goal, 30-35% of electricity has to come from renewable energy.
He was reluctant however, to show favour to one renewable energy over another, but said that the current forecast for PV’s contribution to the electricity mix is 5% for Europe overall. Even though PV is only contributing 0.4% at the moment, De Santi said 5% is a realistic target.
The solar PV target is not just a question of technology though. To accommodate such levels of PV electricity, something has to be done with the grid infrastructure.
Pierre Dechamps, Adviser for Energy and Climate Change at the Bureau of European Policy Advisers to President Barroso, the European Commission, pointed out one potential ‘problem’ with reaching the 20/20 renewable energy targets, and that is that the energy efficiency targets, unlike the direct energy targets, are not mandatory.
He was also less optimistic than De Santi when it comes to the share of PV in the overall electricity mix, predicting it may contribute 2-3%.
Perhaps not surprisingly, Winfried Hoffmann, President of EPIA, said reaching the 20/20 renewable energy target is not too ambitious from a technology point of view. However, he said it would be “extremely ambitious” if grids and transmission are not pushed at a political level.
When it comes to PV in specific, Hoffmann said 12% solar PV is possible from a technological standpoint. This would represent an annual growth of PV of 35%. Before the financial crisis, PV reached an annual growth of 45%, Hoffmann added.
As De Santi, Hoffmann warned that such levels of PV penetration would require energy storage, smart grids and smart meters.
How will renewable energy targets be met?
Although the renewable energy targets of 20% by 2020 are legally binding, De Santi could not tell the audience what would happen to state if they do not meet their obligations. He did, however, emphasise that the implementation would be monitored by the EU through performance indicators, and that this information would be made publicly available – hinting that the information could be used to name and shame governments falling behind.
Pressed on whether he believed the 20/20 renewable energy targets will be met, De Santi paused before saying: “Officially: yes”…
Jean-Louis Bal, Director Renewable Energies at ADEME, France, said renewable energy alone is not enough to reach the 20/20 target – energy efficiency will be needed as well, echoing Dechamps.
“To replace all fossil fuel with renewable energy is like running with only one foot,” he told the audience, saying that the renewable energy target would be more achievable if coupled for energy efficiency.
The cost of solar PV
Hoffmann said one of the challenges for solar PV other than transmission and grid access, is that people still see it as an expensive technology. Hoffmann pointed out though, that this depends on where you are.
Solar PV generation in southern Europe costs about €0.20/kWh, whereas further north, such as in Germany, the price is closer to €0.40/kWh. The 8% annual decrease in the German feed-in tariff could spur the solar industry to lower costs towards €0.20/kWh by 2017 – and as the industry is bringing costs down, Hoffmann believes we could see prices down to €0.10/kWh by 2027.
Hoffmann was reluctant to predict grid parity for solar PV, as be believes ‘grid parity’ to be a very dynamic term. Just as with the cost of solar PV, it depends on geographical location, peak production costs at the place in question, etc.
David Nelson, Senior Partner and Head of Design at architects Foster+Partners in the UK, said that meeting the 20/20 renewable energy target would be a greater challenge than putting a man on the moon was back in 1969, but then as now, it could be proven possible.
Asked about the support for solar PV, the panel seemed to agree that solar was not the biggest receiver of funding.
Stephens admitted that funding for coal and nuclear dwarfed the spending on solar PV, and that the primary energy research funding goes to carbon capture and storage (CCS) in coal plants.
Dechamps said the EU will spend €50bn on energy over the next 7 years, but that solar PV will receive only about €50-100 million a year whereas nuclear gets almost half of the total funding.
How much of global electricity supply will solar PV supply in 2050?
Harrabin asked the panel towards the end to speculate towards 2050, and predict how much solar PV would contribute to the global electricity supply. The answers were given on the understanding that these were their personal opinions, and not necessarily the opinion of the organisations they represent:
- Dechamps: 30%;
- Stephens: 50%;
- Bal: 30-40%;
- De Santi: 30%;
- Freier: 30%;
- Hoffmann: 20% from each of the following groups to primary energy: decentralised solar PV, solar thermal, wind, hydro/biomass, other. PV could supply 60-70% of electricity;
- Nelson: same as Hoffmann.
Special focus on:
Karin Freier, Head of Division, the German Federal Ministry for the Environment, told the panel that Germany has a target of 18% renewable energy in the total energy mix by 2020. At the moment, renewable energy accounts of 9%. In the electricity sector, the goal is to have 13% from renewable energy. The target for renewable energy in the heating/cooling sector is 14%, and the same target goes for the transport sector. She added that these goals are binding.
Freier said a study has found that solar PV could contribute 2.5% of Germany’s electricity in 2020 with a capacity increase from 5.3 GW to 23 GW. She also said Germany expects PV to reach grid parity by 2012-2015.
Asked why Germany only expects PV to contribute 2.5% electricity, Freier’s comments made it clear it came down to costs. The cost of feed-in tariffs for PV rooftop installations alone cost Germany €2 billion every year.
German legislation already gives renewable energy priority access to the grid, and Freier believes PV will reach grid parity by 2015.
Bal said the French target is 23% renewable energy by 2020. For solar PV, the target is 1% of electricity consumption, which would be about 5.4 GW.
At the moment, most renewable energy in France is based on hydropower and biomass, and in order to double the output of renewable energy output, other renewable energy technologies would have to be deployed. However, there are barriers in the forms of public acceptance, costs, the grid, etc. Bal said that these are surmountable, but that they cannot be ignored either.
He also warned that to achieve 20% renewable energy by 2020, will not be easy as it is a very short time frame, but added that the stimulus packages issued with the financial crisis could help both wind and solar.
Scott Stephens, Photovoltaic Manager for the US DoE’s Solar Energy Technology Program, said renewable energy in the USA “is in a state of flux”. The national mechanisms for renewable energy are “very much debated”, but with the current row over the health care reforms, renewable energy has had less attention lately.
Stephens said there is some hesitancy from the PV industry in the USA to couple renewable energy with the carbon debate. If you pin PV with policy, people think it’s only viable with regards to climate change, and not as an energy source in itself.
Although Obama pledged to double the output of renewable energy in three years, solar would be small compared to wind in the USA, and the ‘doubling’ depends on how you define renewable energy, Stephens admitted.
On a more optimistic note, Stephens said the USA will inevitably have 100 GW per year, but that 2030 would be more realistic than 2020.
The Chinese threat...?
Hoffmann said China has seen a lot of investment in renewable energy recently. Initially it was a case of China importing European technology and producing for export, but they have now also started producing for the home market.
The Chinese government has also decided that PV is a strategic investment, which has resulted in what Hoffmann called cheap money from the Chinese bank with longer return on investment times than what is seen in Europe, where loans are more expensive, and the expected return on investment time shorter.
According to Hoffmann, this gives the Chinese PV industry a cost advantage over Europe of 30-35%.
They way to ‘deal’ with the Chinese threat, according to Hoffmann, is to continue Europe’s track record of a quick transfer of solar PV technology from the R&D stages to the market. A model that has been particularly successful in Germany.
This would have to be coupled with volume production, he added.