February 5, 2008
Many countries have an intense debate about their opportunities to meet the new obligations in the EU Climate and Energy Package, especially the part that deals with the required quota of renewable fuels. Sweden and Latvia has lobbied heavily claiming that they already have done so much and already have a high share. Poland has dug their heels into the ground, wishing to expand, rather than reduce, the use of coal. Some of the reactions are clearly rhetorical to show the own voters that “we are defending your interests”. But where are the real winners and losers?
Start at the right end
First observation is that the targets can be met with two actions. One is to increase the use of renewable fuels, the other is to reduce the use of energy by improving energy efficiency. That is why it is such a pity that the Commission has dropped the 20% target for energy efficiency improvements.
Firstly because energy efficiency is the cheaper way to improve the system, secondly because a lower energy intensity opens for use of fuels with lower density, thirdly because of the leverage effect efficiency improvements have on fulfilment of the target. Sweden and Latvia, for example can meet their target without adding one more kWh of renewables if they instead go for full efficiency improvement with 20%, see diagram below!
Two sorts of stress
Extending the analysis we find two sorts of stress on the countries. One has to do with the domestic capacity mainly competence and sites. There are several countries that have to ramp up their markets considerably to be able to meet the requirements. Here measured by the times their market will have to grow (the x-axis). Together they do not represent a big volume of the entire market, but would certainly be interesting for the more skilled countries (and their companies) to woo.
The second stress is the financial for those countries that will have a high share of the total European market (the Y-axis)t. Nor surprise these are also the big countries in Europe and they already have a domestic market to lean on. A further analysis, for anyone to do, would be to consider if e.g. ,
· Spain should go for more wind and
· the German market for PV could be used as inspiration and as suppliers.
One country stands out as special having both types of stress and that is the UK!
Remains to be seen in the process to come if countries will spend their best efforts to act for improvement of the energy systems and, as Mr Barroso has put it, make European Industry the leaders of the climate business, or to fight of the requirements and challenge the U.S. for the championship in backwardness.Hans Nilsson