By Giles Dickson, CEO of WindEurope
Europe wants to be the first climate neutral continent by 2050. This requires an unprecedented transformation of the way we produce and consume things, get around and generally lead our lives. In 2050 Europe’s energy system will look totally different. Fossil fuels will have largely disappeared. Most of the economy will be electrified – with cheap renewables. And wind will be half of Europe’s electricity. WindEurope CEO Giles Dickson explains how the EU’s Fit-for-55 package can accelerate this process.
Hats off to the European Commission on their “Fit-for55 Package”. It acknowledges the need to accelerate the build out of renewable energies and strengthens the role of renewables-based electrification. As it stands, electricity accounts for only 25% of the energy consumed in Europe. The Commission say direct electrification will cover 57% of final EU energy demand by 2050. Another 18% will be indirectly electrified with renewable hydrogen and its derivates.
Total electricity production will need to more than double to 6,800 TWh by 2050. Most of it will be renewable. And wind energy will be Europe’s most important source of electricity, providing 50% of all electricity consumed in the EU by 2050.
Such an energy system, based on large-scale electrification, will reduce total energy demand by more than 50%. It will also be cheaper than the existing energy system, especially when considering the external effects of fossil fuels on pollution and human health.
The Fit-for-55-package translates the EU’s intermediary objective – reducing greenhouse gas emissions by 55% by 2030 – into legislation. To get there, the European Commission proposed higher targets for renewables and energy efficiency. For these new targets the EU now aims to build 30 GW of new wind farms each year up to 2030. That’s double the 15 GW of new wind per year that WindEurope expects for the period 2021-2025.
That’s good for jobs and growth in Europe’s wind industry. We stand ready to invest in new jobs and new production facilities. By the end of the decade, WindEurope expects 150,000 additional jobs in wind across Europe.
But new targets alone won’t be enough to deliver the wind energy capacity Europe needs. Today the problem for wind energy development is not technology, finance or costs. It is permitting. Europe is not permitting enough new wind farms to meet its existing renewable energy targets, not to speak of the revised 30 GW pa target. Permitting rules are too complex, procedures are too slow and permitting authorities don’t have enough staff to process the permit applications. Raising the EU 2030 renewable energy target is purely academic if we do not address the remaining bottlenecks, especially permitting.
The Fit-for-55-package on its own doesn’t solve the problem. The Renewable Energy Directive sets deadlines for how quickly permitting decisions should be taken. But the EU also needs to guide and support Member States on how to simplify their permitting rules and procedures so they can meet these deadlines. It is excellent that the Commission has now committed to issue such guidance in 2022. It will be really useful to identify and disseminate the good permitting practices that are out there. It will help empower national authorities to tackle their existing bottlenecks in permitting.
Europe also needs to capitalise on the growing corporate demand for renewables-based electrification. Here Power Purchase Agreements (PPAs) are key.
The European Commission’s Fit-for-55-package strengthens PPAs and reinforces the need to remove barriers to them. Crucially, the Fit for 55 Package also acknowledges the importance of Guarantees of Origins (GOs) that make electricity from renewable energy traceable and are therefore indispensable to the development of corporate PPAs. Only with GOs can companies prove to their customers that their products are made from 100% renewable electricity. The ‘Fit for 55 Package’ mandates Member States to issue GOs to renewable electricity producers, irrespective of whether the renewable energy projects receive Government support. This legislative change will further support the uptake of PPAs.
The time industry players were sceptical of renewables is over. Today they are knocking at our doors. They want us to help them decarbonise their industrial processes. And we stand ready to provide them with the cheap and clean electricity they need. The time is right to electrify Europe with wind energy.