Centre for European Reform (CER)—Written evidence
Centre for European Reform (CER)—Written evidence 1. Energy is central to climate change mitigation. Over three quarters of the EU-27’s greenhouse gas emissions come from the production and use of energy. Energy is also central to the economy, fuelling industry and providing substantial employment. 2. There is a need for substantial investment in modernising and upgrading energy infrastructure. In the UK alone, the government estimates that around £200 billion of investment will be required for energy infrastructure by 2002. There is also the import cost of energy. The European Union’s energy import bill in 2010 was €355 billion. 3. Low-carbon energy may eventually become cheaper than high-carbon energy (particularly when indirect costs and energy security factors are taken into account). But it is currently more expensive. So there is potential conflict between the need for decarbonisation and the need for economic growth and improved competitiveness. 4. However, there are solutions to this potential conflict: -
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much greater efficiency in both energy use and energy supply; expansion of renewable energy; expansion of nuclear and demonstration of carbon capture and storage (CCS) as necessary low-carbon bridge technologies; overhaul of the Emissions Trading System (ETS) to make it an effective market signal, combined with border tax adjustments to avoid negative impacts on European competitiveness; sensible investment in energy R&D.
Energy Efficiency 5. EU countries have agreed to reduce the amount of energy they consume by 20 per cent by 2020.This target is not binding – unlike the other two in the EU’s climate change package (to reduce greenhouse gas emissions by 20 per cent and increase energy from renewables to 20 per cent, both by 2020). The EU should not spend too much time arguing about whether the energy efficiency target should be made binding. Instead, it should tighten up existing laws, and spend more of its existing budget on energy efficiency programmes. 6. The EU should tighten standards for the use of energy in buildings, electronic appliances and cars. And it should have the power to set minimum standards and remove the most energy inefficient vehicles from the market – as it has already done for products like washing machines and refrigerators. 7. Europe wastes massive amounts of energy because most power stations do not capture and use the heat they produce when they generate electricity. EU countries should quickly move to combined heat-and-power (CHP) systems. This should cover fossil fuel power stations, biomass power stations and nuclear power stations. 58