EU climate strategy

 By Peter Ward

Europe has a chance of achieving a low-carbon future. All member nations of the European Union have agreed on the need to hit emission goals, and encourage the use of renewables and cleaner fuel supplies in the future. But at this crucial stage, one misstep could be damaging for years to come…

The E.U. has set a goal of reducing greenhouse gas emissions by 80-95 percent, when compared to the levels of 1990, by the year 2050. To achieve this, investments have been made in low-carbon technologies, renewable energy, energy efficiency and grid infrastructure. But if a consumer is paying their electricity bill and the money is helping keep a dirty power plant open, then those investments become less impactful, and the goals of 2050 less attainable.

Coalition calls

As the E.U. debates reforming the Electricity Market Design, a coalition of energy companies and association operating in Europe has called on the commission to make any new legislation consistent with E.U. energy and climate policy.
The coalition launched an initiative called Make Power Clean, in an attempt to promote an EU electricity market that can deliver cleaner power across the region.
A letter, signed by the likes of Eni, Shell, WindEurope, Siemens, and Total, praises the proposal to introduce a carbon eligibility criterion, but urges the commission to ensure that undue compensation doesn’t end up being paid to the highest polluting power plants.
“Our electricity bills should not support the operation of the most polluting power plants, given that cleaner supply options are available. This would clearly contradict EU climate and energy policy objectives and would go against the best interest of European consumers,” the letter reads.
“As proposed by the European Commission, making the eligibility for capacity mechanisms conditional to a 550g CO2/kWh carbon criterion is transparent and in line with the European Investment Bank’s investment rules. It is also technology neutral: plants with higher CO2 emissions will still be able to operate in the market, simply paying for their emissions in the frame of the EU Emission Trading Scheme (ETS),” it continues.

Make Power Clean infographic for #Support550 campaign

Capacity mechanisms

In short, the Make Power Clean movement wants to ensure that only the cleaner technologies are eligible for capacity remuneration mechanisms. Right now, the least clean power plants are eligible for public money, something which is putting the goals of the Paris agreement in jeopardy.
The EU ETS is a cap and trade system, where a limit is set on the total amount of greenhouse gases that can be emitted by installations. Over time, the cap is reduced as total emissions fall. However, companies are also able to trade emission allowances, meaning they can buy or receive permission to produce more emission. There is a limit on the number of allowances available in order to ensure they have a value.
But there is a concern that the ETS is not truly reflecting the environmental costs of coal-based power plants, and as such is not providing the encouragement for power generators to move towards lower carbon solutions such as natural gas.
“The carbon criterion would complement the ETS. The ongoing ETS reform is critical to deliver a meaningful carbon price signal to drive the switch towards lower carbon power generation,” the letter states. “Europe’s Emission Trading Scheme puts a price on carbon, while the criterion prevents capacity mechanisms from rewarding the highest emitting plants.”

Coal plants phased out

One of the associations that signed the letter, WindEurope, which acts on behalf of the wind power industry in Europe, believes coal power plants must be phased out quickly if the EU is to meet its goals. “Action must now be taken to accelerate the phase-out of coal power plants. Getting rid of these inefficient and inflexible plants is also a precondition to ensure the proper functioning of a power system running with 50 percent of variable renewables by 2030,” the association wrote in a statement.
Europe has set itself ambitious goals with the Paris agreement, but the level of ambition doesn’t make them any less important. If the region is going to achieve those goals and make a dent in emissions big enough to reduce the effects of climate change, it must be consistent in its methods. That is the reason why companies and organizations have called for a more flexible, secure and sustainable electricity market—to give the climate agreements the best fighting chance.

SEE MORE: Nuclear energy in Europe by Luca Longo

about the author
Peter Ward
Business and technology reporter based in New York. MA in Business Journalism at Columbia University Journalism School 2013. Five years experience reporting in the U.S., the U.K., and the Middle East.