Public funding for green energy in a context of crisis

1. Public funding for green energy in a context of crisis Sara Pérez Díaz 13/11/2014

2. Table of contents • Introduction • Renewable energy sources situation in Europe • European trade unions’ view of green energy • Supporting schemes in RES • Crisis and renewable energy source support • Future expectations Public funding for green energy in a context of crisis

3. Introduction • ETUI “Public funding for green energy in a context of crisis” • Partners • ISTAS, Spain • IRES, Italy • LRD, UK • Wuppertal Institute, Germany • Umea University, Sweden • Institute for the studies of societies and knowledge, Bulgary • General european overview and 6 country reports • June – December 2012 Public funding for green energy in a context of crisis

4. Renewable Energy Situation • 12.4% share renewable energy in gross final energy in 2010 • Increase of 60.2%, 1999-2009 • 19.8% share in electricity consumption • Economic activity (27-EU): 127 trillon € in 2010 • Photovoltaic sector followed by wind power and biomass • Germany followed by Italy, France and Sweden Public funding for green energy in a context of crisis

5. Employment • 1,148,600 jobs in the 27-EU in 2010 (Eurobserv’ER) • 22% increase on 2009 • 2011: 1.186.000 jobs. 3% increased. • By country • Germany: 361,360 jobs • France: 174,735 jobs • Italy: 108,150 jobs • Spain: 98,300 jobs • By technology • Biomass: 273,000 jobs • PV: 268,110 jobs • Wind power: 253,145 jobs • According to European Comission study: • Reaching 2020 targets: 2.8 millions jobs • 2030: 3.4 millions jobs Public funding for green energy in a context of crisis

6. Employment • 2030, 45% RE in final energy: 4.4 millions jobs (according the European Renewable Energy Council) Public funding for green energy in a context of crisis

7. European Trade Unions’ view • Ambitious climate change policies • Cut emissions by 25-40% by 2020 and 80-95% by 2050 (ETUC) • RES: independent, secure and distributed energy supply • European energy pact with public investment • European regulation should ensure RES national targets (ETUC) • Development of new jobs and just transition • Transition must creates decent new jobs • ETUC aims to develop transition programs to anticipated changes in employment patterns Public funding for green energy in a context of crisis

8. Support schemes • Most experience with supporting RES: electricity sector. • EU Directive 2001/77/EC, required MS to increase the share of RES • Electricity sector: feed in-tarif, feed in-premium and quota obligations. • Heating and cooling: investments grants, tax exemptions and obligations • Transport: combination of obligation with tax exemption Public funding for green energy in a context of crisis

9. Support schemes Public funding for green energy in a context of crisis

10. Support schemes • EU level: overall net support 35€ billions in 2010 • 2012: 42€ billions • Expenditures for electricity are dominant: mostly paid by final consumer (all countries studied) • 80% total energy subsidies in the EU-15 are paid to fossil fuels and nuclear energy. 19% to RES (European Enviroment Agency) • OECD more than 60€ billions in 2010 only fossil fuels. Public funding for green energy in a context of crisis

11. Support schemes • Few countries hold a mayor part of support expenditures (Ecofys). 2009 • Germany: almost 11 billions €; • Italy and Spain: 5 billions € • France: 3 billions € • Sweden and UK: less than 2 billions € Public funding for green energy in a context of crisis

12. Crisis and RES support • Financial new investments in RES significant lower in 2010 in Europe and North America. It’s growing in China and other emerging economies. • Biggest reductions: European solar and US wind • Sector has generally grown during the crisis. Growing share of RES and job creation • RES sector not very hit by economic crisis. Except Spanish case where thousands of jobs were lost • Lastest data after project closure may indicate that crisis consequences are still being suffered (e.g. 2011/2010 employment) Public funding for green energy in a context of crisis

13. Crisis and RES support • 2010 and 2011 some countries modified PV feed in tariff schemes: Czech Republic, Spain, France, Italy, UK and Germany • Rapid fall in cost of technology, too high retribution • Wind energy also affected by cutbacks: UK and Spain • Price of electricity: argument to modify and reduce economic incentives. Controversial issue. • Many countries suffering industry destruction Public funding for green energy in a context of crisis

14. Not only economic crisis Support schemes modifications not always as a consequence of economic crisis • Failure of Conventions on Climate Change • Other technologies decissions. Competitive market. Lobbies actions • Crisis at Fukushima. Nuclear decissions • Can benefit gas-fired generation more than RES • Effect of regulatory uncertainty on investment Public funding for green energy in a context of crisis

15. Crisis and industry leading role European Commission: Innovation Union Competitiveness report • Europe has historically been strong in RES technologies • Economic crisis has had a mobilisation effect on the United States and the rising Asian economies: now patents in green energy and environmental technologies are higher than EU. Public funding for green energy in a context of crisis

16. Future expectations • Support schemes continued to be justified • Abscence of internalisation of external costs • Removal of all subsidies for conventional generation • Support post-2020 • Technologies close to market: operative supports • Technologies in initial stage of development. R&D support • Trade Unions organizations regards RES sector as an economic oportunity in the context of crisis and as a source of jobs • iea world energy outlook 2013 “New policy scenario”: Global subsidies should doubled from 2012 to 2035. • 101 billion $ in 2012 / 220 billion $ in 2035 Public funding for green energy in a context of crisis

17. Future expectations • Further investment required in infrastructure, smart grids and storage: Italy and Germany • Regulatory changes risk national RES targets. • Need to analyze the social and economic impact on new regulatory changes • Making support schemes more market-oriented and exposing renewables to market price signals • No consensus level of support RES: national control or EU level benchmarks Public funding for green energy in a context of crisis

18. Future expectations • European Comission guidance RES support schemes: Best practice • Flexible support schemes (automatic reductions) • Periodic review and adjustment of support levels • Stable scheme financing. Avoid retroactive changes • Feed in premiums preference over feed-in tariffs • Simple and transparent administrative rules • Transparent and non-discriminatory cost allocation rules for grid access • Towards europeanisation: common methods for setting supports • Common cost elements and calculation methodology Public funding for green energy in a context of crisis

19. Thank you for your attention www.istas.net/greeneconomy sperez@istas.ccoo.es Public funding for green energy in a context of crisis