Brussels, Belgium — ESI-AFRICA.COM — 30 January 2011 – The European Union looks set to overhaul the way renewable energy projects and power grids are financed, launching a new type of infrastructure bond and converging the EU’s tangle of overlapping subsidies.
European leaders will meet in Brussels on 4 February for a summit to reconcile an EU goal of getting 20% energy from renewable sources by 2020, with a debt crisis that has driven several EU countries to the brink of insolvency.
EU energy commissioner Guenther Oettinger highlighted the difficulties ahead.
“Don’t kid yourself “’ we don’t have the machine to print new money, he told a European Parliament hearing here. “The European Investment Bank can help us, but they are not a charitable organisation. Member states need to look at this in an innovative manner.”
The plans to harmonise national subsidies for renewable energy in the long term has caused worries in Germany, where generous subsidies have led to a surge in green power which now faces a national overhaul. The Netherlands and Spain, where wind and solar power have boomed, are also overhauling support schemes.
A draft strategy paper on financing renewables seen by Reuters yesterday estimates that the EU could save 10 billion Euros (US$13.7 billion) a year by harmonising such schemes.
Typically, EU states support renewable projects at a national level via a complex toolbox of quotas, grants, tax exemptions and feed-in tariffs.
“We need a greater convergence of national support schemes and we need to move to a pan-European trade in renewable energy,” says the draft to be launched next week. “Billions of Euros could be saved if member states treated renewable energy as a commodity in a single European market,” it added.
Leaders at the summit are expected to give EU energy commissioner Guenther Oettinger a mandate to explore innovative ways of financing useful energy projects that companies have ignored or blocked in their quest for profits.