Stavros Dimas
Member of the European Commission, Responsible for Environment

Renewable Energy Policy in the European Union

The Beijing International Renewable Energy Conference
Beijing, 7 November 2005

Your Excellencies,

Ladies and Gentlemen,

I would like to start by thanking the Chinese Government for hosting this Beijing International Renewable Energy Conference and for taking forward the progress made in Bonn last year.

I am very happy that this Conference is a joint endeavour of the Chinese Government, other stakeholders and the European Commission. It is a clear signal of the Commission's interest to work with China and other important partners in furthering global environmental issues such as renewable energy.

The World Summit for Sustainable Development in Johannesburg in 2002 made a fundamental step by acknowledging for the first time that renewable energy is a key factor in addressing climate change, poverty and more generally economic development.

Taking action on climate change is urgent. The scientific evidence is very clear - greenhouse gas emissions will peak within two decades and will then need to decline if we are to limit global warming to 2 degree C. In economic terms, we need to reconcile the challenge of climate change with rapid economic growth - to which all countries are entitled - and the resulting rise in energy demand.

While further measures to promote energy efficiency are certainly necessary and promising, a comprehensive and efficient energy policy must encompass energy supply. In this context, renewables are a key. Renewables offer a great opportunity of producing energy in a clean way. By definition, they do not alter the economic balance of the world.

This offers perspectives for developing and developed countries alike. Developing countries can have at their disposal an appropriate and sufficient amount of energy without the uncertainties and vulnerability related to the fluctuations of oil prices. It strengthens their self-reliance on energy supply and promote local economies as developing countries can exploit resources that they have already available in their territories, thus increasing ownership and creating more job opportunities.

Renewables are also an important source of technological innovation. As a major decentralized energy source, renewables also offer important potential savings in transmission and distribution costs. This makes it possible to leapfrog the expensive grid-based energy systems that have been used in Europe and the United States since the early 1900s. Again, renewable energy sources offer many solutions for providing millions of people with access to affordable energy.

The fact that this Conference is being held here in Beijing is very positive and very encouraging. It confirms that accelerating the uptake of renewable energy is no longer the sole business of developed countries, and that emerging economies also wish to play a leading role in creating the conditions for renewables to thrive. Further evidence of this is China's renewable energy law of 2004 that introduced a support scheme based on advanced feed-in tariffs.

The EU-China Partnership on Climate Change, which was agreed at the September EU-China Summit, and related EU-China agreements in the energy sector, provide an excellent basis for our future cooperation on combating climate change and on sustainable production and use of energy. These issues are closely related.

The clean development mechanism (CDM) under the Kyoto Protocol provides incentives for co-operation and technology transfer between industrialised and developing countries. Under suitable framework conditions, CDM offers great opportunities for investment in renewable energy here in China and in other parts of the world.

Just as the European Commission actively supported the Bonn Conference, it vigorously backs this 2005 follow-up conference. Our continued involvement, as well as that of many European Union Member States, shows our commitment to renewable energy and our willingness to strengthen the international co-operation in this area. We all stand to gain from working together in this area and assisting developing countries to benefit from their vast renewable energy sources.

EU renewables policy

The European Union has a comprehensive and target-based approach to renewable energy.

Since the late 1990s, the Union has been working towards a general indicative target of 12% as the share of renewable energy in primary energy consumption by 2010. Since 2003, the European Union has worked actively to reach two operational targets: 21% for electricity and 5.75% for biofuels. The target year is, once more, 2010.

6% of the energy and 12% of the electricity we consume today in the European Union already comes from renewable sources. Numbers should not be deceiving and give a wrong impression. If compared to the situation only a few years ago when the share of renewable energy was marginal, we could say that the European Union's approach works. And, moreover and more importantly, it is delivering substantial and sound economic and environmental results.

The renewable energy sector features amongst the fastest growing in the EU. Annual turnover has reached 15 billion euros and more than 200.000 jobs have been created. Europe counts more than 4.5 million green-power consumers.

There is, however, also another side of the coin. In fact, as the Commission stated in its Communication on Renewables in May 2004, a lot needs to be done in terms of Member States' support, public awareness and research in innovative technologies. The promotion of renewables is, in fact, not the same in all Member States.

Taking this all into consideration, the Commission wants to explore new areas of our renewable energy policy. Towards the end of this month, an ambitious Biomass Action Plan for the European Union will be adopted. This follows the conclusions drawn in the 2004 Communication that extra measures were required. It will list a range of actions on biomass, including renewable heating applications, to ensure that the general and operational targets are met by 2010.

The Commission has also reviewed the national support schemes designed and implemented by the European Union's Member States to accelerate the uptake of renewable electricity. The review highlights, for example, the effectiveness of the German and Spanish systems of feed-in tariffs. Nevertheless, cumbersome permitting systems prove to be the main obstacle to bringing more renewables on stream. Member States are being asked to focus in particular on removing this obstacle.

In parallel, the Commission is carrying out a scenario analysis to enable the European Union to set a new general target for renewable energy before 2007. The European Parliament recently called for an integrated approach to energy policies that will give renewables a 25% share by 2020. Considering climate change, issues of security of supply, and energy price volatility, I think the European Union should indeed seriously consider adopting this ambitious target. Nevertheless, the jury is still out and the Commission will report its findings early next year.

Let me however emphasise that even with such a new target, measures on energy demand remain central. Unless at the same time as boosting renewables there is an effort to increase energy efficiency, any increases in the use of renewables will be easily cancelled out by growing energy demand.

For this reason, I would like to mention one more initiative because of its particular relevance to the goals we are trying to achieve at this Conference.

The European Commission issued a Green Paper on energy efficiency in June 2005, identifying possibilities for cost-effective energy savings equivalent to 20% of the European Union's current energy use by 2020. An action plan on how to achieve these savings will be presented shortly and will identify guidelines for actions that should be taken by the European Union to become an energy-efficient economy. Measures will cover various aspects of our lives, including transport, housing and industry.

International cooperation

Let me now address shortly the international dimension. The European Union's internal efforts to promote renewable energy go hand on (is it not "in hand") hand with our willingness to enhance and strengthen international co-operation in this area. The European Union is well equipped to continue playing a key role through the many initiatives we are involved in. Let me just mention two examples.

Both favour the deployment of renewable energy technologies and are therefore highly relevant in our dialogue with developing countries.

The first is the European Union Energy Initiative, focusing on policy dialogue in parallel with specific partnerships and actions on access to energy and poverty alleviation. Renewable energy is a major focal area. Many developing country governments have acknowledged the European Union Energy Initiative as a major partner, including the recently established forum of African energy Ministers.

The Energy Initiative establishes the European Union Energy Facility, with a budget of 220 million €, that will become operational in 2006 and will act as a catalyst for concrete investments in energy services for those living under the poverty line. These funds will be in addition to the resources made available to developing countries through the European Union's 'Intelligent Energy - Europe' funding programme, through the 'Partnership and Dialogue Facility' and through several other actions by the Commission and European Union Member States.

The second example, outside the UN framework, is the Johannesburg Renewable Energy Coalition - the JREC -, which was kick-started by the European Union during the WSSD in 2002, is a broad platform where governments are working together to strengthen renewables.

To encourage the exchange of experience, we have reinforced our co-operation with the International Energy Agency. The plan is to develop the JREC Renewable Energy Policy and Measures Database into the largest online data repository of national renewable energy policies and related information. Our aim is to cover all 88 JREC countries, and the other major countries of the world, in time for the 2006 session of the UN's Sustainable Development Commission that will focus, as you know, on energy.

Since Bonn, we have also made considerable progress with our proposal for an innovative public/private funding mechanism for renewables.

The JREC Patient Capital Initiative follows up on a commitment by JREC member countries to identify and bridge financing gaps for renewable energy business developers and SMEs, in particular in developing countries. From the preliminary expressions of interest from governments, private investors and the European Investment Bank, it seems that a first closure of around 100 million euros is feasible by mid-2007. But much more work has to be done to make it happen. I am confident that this new mechanism will encourage the creation of north-south joint ventures and accelerate the much-needed transfer and development of renewable energy technologies in developing countries.

In addition to these dedicated partnerships, there is the European Union's research and development framework programme. The next programme starting in 2007 will put even more emphasis on international cooperation, in particular in the area of renewables and energy efficiency. It will continue to make funding available for scientists who want to take part in European research projects. This will give a further boost towards transferring renewable technologies and know-how to developing countries and achieving global sustainable development patterns.

Finally, and before concluding, let me again highlight the European Union's commitment to increasing aid to 0.56% of national income by 2010, with the objective of reaching 0.7% by 2015. By that time an estimated €84 billion will have to be allocated annually. This is a challenge that the European Union takes very seriously.

Conclusion - Beijing Declaration

I trust that the European Union's experience in establishing multi-country, multi-faceted, target-based programmes can provide some indications as to how renewables can be promoted at global level.

Renewable energy sources carry a real potential for local economic development and for communities under the poverty line.

This Conference can accelerate the deployment of renewable energy by giving a strong political signal, ensuring that the 14^th and 15^th sessions of the UN Commission for Sustainable Development deliver concrete results.

Let us work together over these two days to ensure that the Beijing Declaration produces tangible results.

Thank you.