Opening Friends of Europe’s 2012 energy summit, Giles Merritt, co-moderator and Secretary General of Friends of Europe, said that the European Commission insists that the EU’s 20/20/20 targets (aiming to have 20% of its energy coming from renewable sources, a 20% improvement in energy efficiency and a 20% cut in carbon emissions by 2020 compared to 1990 levels) are feasible. “But is feasible the same as likely?” he asked.
The targets are certainly realistic, said Angus McCrone, Chief Editor of Bloomberg New Energy Finance and co-moderator. Levels of clean energy investment in 2010 and 2011 of around $100bn were consistent with what is required, he said, although the figures for 2012 look to be slightly below target. “If this is just a short-term blip it doesn’t really matter but if it is a sign of things to come there could be a problem.”
However, Andrew Warren, Director of the Association for the Conservation of Energy, warned that while the targets for renewable energy and carbon emissions are likely to be met, the EU is set to fall short of the energy efficiency target. “We have to deliver an improvement of up to 40%. That is going to be the key area of debate.”
Joost Van Roost, President of ExxonMobil Benelux, pointed out that Exxon’s figures implied an important role for energy efficiency because the 30% increase in energy demand accompanies economic growth of almost 100%. “The gap between the two figures is energy efficiency,” he pointed out.
Hydrocarbons will continue to play a critical role in the energy mix even beyond 2040, given their availability, versatility and affordability. ExxonMobil’s forecast sees global demand for natural gas rising more than 60 percent through to 2040, as it is a ‘no regrets’ option – natural gas is the cleanest fossil fuel and can help meet energy demand (particularly in power generation) while reducing emissions.
The aim of the European Commission’s Energy Roadmap is to reduce emissions by 85% by 2050, McCrone said, through some “incredibly ambitious scenarios”. There is a big range of possibilities, too, with the rates of renewable energy ranging from 49% to 86% of total electricity production. For carbon capture and storage (CCS) the range is 0.4%-24%; for nuclear 3.6%-20.6% and demand reduction will account for anything between 11.6% and 40.6% of emissions cuts. “There are all kinds of different scenarios but they all require a lot of investment and a lot of change,” McCrone said.
And while energy investment is dependent on the economic situation, it can also change that situation, said Neoklis Sylikiotis, Cypriot Minister for Commerce, Industry and Tourism. “The energy sector can play a decisive role in reversing adverse developments. Europe’s energy system is subject to a significant, structural transformation due to the transition to a green, low-carbon, resourceefficient economy. By 2025, 1 million jobs will be created in renewables and energy efficiency alone.”
Given that the price of fossil fuels depends on many factors that cannot be predicted, “it is reasonable that the EU should move towards decoupling its energy future from price fluctuations. But a balance must be found between the need to invest in new, lower emission but capital-intensive infrastructure and the need to disengage energy security from carbon intensive energy sources with inherent price unpredictability,” he added.