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Renewable energy advocates speaking at the SolarPower Summit on
10-11 May said they believe regulated taxes on electricity dampen
demand for renewable power.
Tariffs and levies on electricity accounted for 30% of the
average EU electricity bill in 2019, according to trade association
WindEurope.
Some energy bill charges go to paying for decarbonization and
renewable energy programs in member states, but panelists said
certain charges were interfering with the growth of the renewable
power that is a key driver of decarbonization.
Kristian Ruby, the secretary general of electricity transmission
trade body Eurelectric, called for a revision of the EU's Energy
Taxation Directive, which lays out the minimum excise duty rates
for fuel, transportation, and electricity. "We don't have a level
playing field today. We have a number of polluting sources that are
enjoying a free ride whereas electricity is heavily taxed and
heavily burdened," said Ruby.
Some other energy sectors are not as burdened as renewable
electricity. "For instance, if you have a gas stove at home. You're
getting gas into your home, you're burning it, and you're not
paying a carbon price for that. That needs to change. We need to
make sure that the polluters pay," Ruby said.
European Parliament member Jutta Paulus, speaking during a
separate panel, also supported taxing higher-carbon energy sources
rather than carbon-free electricity. "We have to take off taxes,
surcharges, whatever we have put on electricity in order to make it
make it the most efficient, and we have to put all these levy
surcharges and so forth on carbon fuels," said Paulus.
This, she said, would allow an easier energy transition for the
power, heating, cooling, and transportation sectors.
Electricity demand spike
A 150% increase in electricity consumption is expected as a
result of the 55% emissions cuts target and other EU climate goals,
according to Ørsted Head of Regulatory Affairs Ulrik Stridbæk.
"Getting rid of fossil fuels in our current electricity system
is going to be the least of our challenges. The biggest challenge
is to meet this enormous new demand," he told the online SolarPower
summit.
As a result of more demand for renewable electricity, end-users
may wind up competing for it. "I think there's a puzzle still to
cover … which is the volume we're going to need, and the fact that
we're all going to need it at the same time," said Marco Mensink,
director general of the European Chemical Industry Council.
This is a major issue for the electric vehicle sector and
industrial users of large amounts of energy, said Mensink. "They
need electric chargers to electrify the automotive sector, and then
the electricity is simply not there for industry," he said.
Industry's green hydrogen demand could put A further strain on
renewable electricity supplies. "One of the things we're going to
need that is good and underrated is a bit of orchestration on who
gets what first, and when," said Mensink.
Missed connections
The European Commission is planning to require member states to
use a greater share of renewables to meet electricity demand.
It aims to double today's required levels of 32% to 65% by 2030
under a revision of the Renewable Energy Directive (RED II),
according to a September communication to the EU's
governing bodies. Trade body SolarPower Europe has called for an
80% share.
Distribution grids, energy storage, and smart girds are needed
to enable this massive scale-up. "Regardless of whether we're
talking 65% electrification or even 80% or more, by 2050 we are
looking at very, very steep curves. That's why we're talking about
an electric decade," said Eurelectric's Ruby.
Upgrading and expanding the transmission network would require
€400 billion ($483 billion) over the next decade. Already, 30% of
the existing grid is over 40 years old, Ruby added.
Wind and solar today are providing the cheapest electricity in
history, said SolarPower Europe CEO Walburga Hemetsberger.
But Europe's cheap wind and solar power aren't as useful "if we
don't have the grid that will take those renewables to the
consumer," said Giles Dickson, CEO of WindEurope.
A lack of interconnectors and smart grids, whether onshore and
offshore, restrains new wind generation, he noted.
Posted 12 May 2021 by Cristina Brooks, Senior Journalist, Climate and Sustainability
