Europe's 20% ambitions

Since the European Council meeting last week, we now have a 20% target by 2020, or actually 3 targets: 20% reduction in greenhouse gasses, 20% primary energy savings against baseline and a binding 20% target for renewables for the EU. However, it's the member states, not the EU who will build this renewable capacity. The 20% renewable target is a grand aggregate of national targets, using various technologies, none of which have been defined except for the clause that national targets can be differentiated.

In the energy sector, we have prior experience with the EU Council adopting a binding target for its member states as a group through the burden-sharing agreement in the Kyoto protocol. According to the European Environmental Agency in its report on Greenhouse Gas Emission Trends, the EU is actually set on a course to meet its 8% Kyoto target by 2010, but if we look at the numbers, the EU-15 will have reduced its emissions by 4.6%, with a further 0.8% coming from sinks and 2.6% from acquiring emission reductions outside the EU, primarily through the Clean Development Mechanism. The fact that one can meet an 8% binding reduction target by an actual reduction of 4.6% demonstrates the flexibility offered by aggregate targets.

But in the case of the Kyoto commitment, the EU target was the aggregate of defined national targets. For the renewable target (as for the other targets), these national targets have not been defined, and therefore, it's unclear who will contribute what? For renewables, this promises to be a difficult debate, since according to the EU's own impact assessment, renewable energy represents currently only a 6.5% share of the EU's primary energy mix, up from 5.4% in 1997. An increase to 20% by 2020 certainly shows the right level of ambition - it represents a factor 6.5 acceleration in growth for a sector that is already growing fast since a decade. The technical capacity to design, manufacture and install renewable systems needs to be developed.

Some major countries, such as Germany, Spain and UK will need to fuel this growth, but let's look at the sectors where the growth will need to come from.

The transport sector needs to contribute minimum 10%, embedding a larger share of the burden in the package on renewable electricity and heat in the package.

Renewable electricity already contributes around 20%, primarily through biomas, hydropower and wind. Here, there is a lot of room for growth, but electricity is less than 20% of final energy use, though around 40% of primary energy consumption. We may see a change of the energy accounting framework in the coming years.

Renewable heat is the big variable. Its contribution depends on its definition. The plan has great expectations from biomass. But the economics of heat compete with the economics of insulation. And insulating buildings is one of the most cost-effective measures for CO2 reduction. For example, district heating systems require a minimum density of heat demand per square km. And capital intensive solutions for heating a building require a minimum heat demand to earn a payback.

It's good to be ambitious in sustainable energy policy, but if ambition moves too far from reality, it only leads to frustration, disappointment and creativity with numbers.