European Economic and Social Committee says national renewable energy subsidies have led to high costs and partly wrong price signals; EU consultative body recommends adoption of EU-wide measures specific to each renewable technology

Allison Oesterle

BRUSSELS , December 17, 2012 (press release) – National subsidies intended to support the market roll out of renewable energies have led to high costs and partly wrong price signals. In order to achieve the EU's 2050 climate objectives they should be replaced by EU-wide targeted measures tailored to each renewable technology, in conjunction with an EU CO2 reduction target after 2020 said the European Economic and Social Committee in its opinion adopted at the plenary session today.

"The EU-wide subsidies that we are calling for should be limited in time, until renewable technologies become competitive", said Ulla Sirkeinen (Employers' Group, Finland), rapporteur for the opinion.

In order to ensure the cost-effective promotion of renewable energy beyond the 2020, the EESC is opting for a flexible system of EU-wide common support schemes, "tailored to each renewable technology's maturity and differing circumstances".

However, until the internal energy market is completed, "support schemes should be tailored to each electricity price area or Member State", said Ms Sirkeinen. This would also foster cooperation and trade in renewable energy, which is essential for the completion of the internal energy market.

The opinion "Renewable energy: a major player in the European energy market" pointed to the shortcomings of existing national schemes. Some have undergone changes over time and hence sometimes lacked predictability, transparency and cost-efficiency. This has done little to create the environment that is needed for viable long-term investments in renewables, said the EESC.

Looking beyond 2020, the EESC recommended greater focus on weaning consumers off carbon fuels.

To achieve the EU's 80% CO2 reduction target by 2050, renewable energy goals should be replaced by a general greenhouse gas emission target, said the EESC. This should be accompanied by setting "a balanced carbon price which would drive efficiency measures, R&D and investment, without stifling the economy", said Ms Sirkeinen.

In a related opinion, drawn up by Pierre-Jean Coulon, the EESC advocated the swift connection of EU energy islands, a fundamental step towards increased security of supply and therefore stronger growth and solidarity, whilst reducing price differences across the EU.

"'An energy island' is a cost for all. This cost must be evaluated and reduced by a comprehensive policy action", said Mr Coulon. He asked the European Commission to carry out an assessment to measure the cost of non-Europe in the energy sector.

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