EU Report: costs and subsidies energy technology

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A presented report from the EU ‘Progress towards completing the Internal Energy Market‘ shows the total value of public interventions in energy in the EU were €122 billion.

It estimates on external costs across power generation technologies. Not all costs can be reflected in market prices.

Think of costs of environmental and health impacts and the costs of climate change. It puts the figure of external costs of the EU’s energy mix in 2012 at between €150 and 310 billion.

Success of current policies

  • wholesale electricity prices declined by one-third and wholesale gas prices remained stable between 2008 and 2012
  • consumers have more choice when it comes to picking an energy supplier
  • many missing infrastructure links between EU (28) countries have been built or are under construction
  • cross-border trade in gas and electricity between EU countries has increased. Gas pipelines are also being used more efficiently thanks to common rules on the use of gas networks
  • EU legislation makes sure that energy companies cannot exclude competitors from access to pipelines or withhold the construction of important infrastructure. EU rules also guarantee fair trading on wholesale markets and prevent price manipulation.

Need to be done

  • more investments in infrastructure including smart grids. In gas, these investments should focus on ending the isolation of the Baltic States and diversifying suppliers for countries in Eastern Europe. In electricity, investments should focus on linking the grids of the Iberian Peninsula, the Baltic region, and Ireland and the United Kingdom.
  • the implementation of a set of simple, harmonised rules across Europe for gas and electricity trading
  • government intervention should only happen when secure energy flows cannot be guaranteed by the market
  • a stronger emphasis on regional cooperation to bring faster results and to better address local needs
  • consumers should become more active players in the energy market (i.e. through smart meters that allow them to monitor and adjust their energy consumption)
  • retail and wholesale markets should be better linked so that lower wholesale prices lead to lower consumer prices

Link to the report




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