Climate News of the Week Roundup: China Smashes Germany’s Solar Installation Record While Europe is Content With Low Ambition

This week’s roundup features the European Commission’s proposals for post-2020 climate and energy policy, the new German government’s plans to overhaul the renewable energy law, studies on the benefits of renewables and efficiency in Europe and Germany, solar installation figures from China, India and Japan, ambitious solar plans in Kenya, a report saying that Obama’s executive authority on climate policy goes quite far, an HBSC report saying that ambitious climate policy could halve the value of coal companies’ assets, a study saying that climate change could increase the frequency of devastating El Niños, and more.

EU Energy and climate goals for 2030. The European Commission this Wednesday published its proposals for the EU’s post-2020 climate and energy framework. It also put up a detailed Q&A here. Headlines are:

  • An emission reduction target for 2030 of “at least” 40% that is to be achieved domestically, that is, without use of emission credits from abroad. According to the Commission’s impact assessment the EU will get to -32% or 33% even under “business as usual”;
  • A renewables target of 27% that is supposedly binding, but not to be broken down into targets for the member states, which begs the question how exactly the bindingness is supposed work.
  • Not even a non-binding target for energy efficiency.
  • The EU emission trading system is to get a “market stability reserve” from 2021 to even out imbalances between supply and demand (details here).

What is a “fair” contribution of the EU to the 2°C limit? Based on an analysis of several dozen effort sharing proposals, Niklas Höhne says that an emission reduction of 40% by 2030 is at the very, very low end of the range of what would be a fair EU contribution to achieving the 2°C target. -50% would be closer to the mid-range.

EU carbon buffer could add 13 euros to 2019-2030 CO2 price. Point Carbon estimates (subscription required) that the market stability reserve could make the EU carbon price average around 40 euros between 2019 and 2030.

Efficiency and renewables make Europe competitive, EU study says. While the climate policy discussion keeps being dominated by fears of high costs, a key reason for the lack of ambition in the Commission’s proposals, EurActiv this week reported an a new study that concludes that renewables “help reduce fuel import costs and contribute to improving the energy trade balance”, having avoided €30 billion of fuel imports in 2010.

Climb-Down in Climate Protection? EU Facing a Far-Reaching Decision in Aviation Policy. Discussing another area where the EU is backtracking, Jochen Luhmann from the Wuppertal Institute postulates that the EU’s caving in the fight over the inclusion of aviation in the EU ETS is relegating it to the status of a provincial power. The EU is effectively abandoning its approach to adopt legislation with an international reach.

First Information on Key Points of Reform of German Renewables Law. On the very same day as the announcement of the Commission’s 2030 proposals in Brussels the German government was discussing the reform of Germany’s renewable energy law. Matthias Lang and Ulrich Mutschler from the German Energy Blog summarise the main contents. In a nutshell, expansion caps and support cuts. In addition to the already existing “breathing cap” on solar PV installations a similar cap is now to be put on onshore wind installations. “Breathing cap” means that if the new annual target of 2.5GW is exceeded, the feed-in tariff will be reduced more strongly than anyway envisaged. In addition, most renewables installations are to be forced to directly market their electricity and the feed-in surcharge is to be levied on electricity produced for own consumption.

Many German energy experts commented rather negatively on the plans. Main points of criticism are:

– The largest lever to control the renewables surcharge (and to reduce emissions), the low emission price in the EU ETS, is not even mentioned.
– Onshore wind is the cheapest renewable option, capping its expansion to contain costs is therefore nonsensical. Especially since at the same time expensive offshore wind is supposed to be expanded significantly, although less ambitiously than according to previous plans.
– Requiring operators to directly market their electricity increases the investment risk and thus the cost of capital.
– Levying the renewables surcharge on self-consumed electricity from renewables and cogeneration puts a break on the the very technologies that should be promoted.

Prof. Olav Hohmeyer posits (article in German) that 50% renewables could be achieved by 2022 without a strong increase of the feed-in surcharge. Decreasing the expansion speed is in his view merely an “optical effect” to calm down consumers. In reality, the aim is in his view to protect the business of fossil plant operators for as long as possible.

Jürgen Döschner from WDR public radio similarly posits (article in German) that that economy minister Sigmar Gabriel wants to put an end to the citizen-led energy transition.

Craig Morris estimates that the intended policy changes will lead to Germany missing its targets and suspects that Gabriel mostly has an eye on near-term political gain. “In reality, politicians are jumping on the cost bandwagon because costs are going to stabilize now anyway, so no matter what the politicians do, they will be successful and can claim responsibility for the successful outcome. It’s like roosters crowing that they brought the sun up.”

Germany to miss 40% climate target on lignite use – expert. As for missing targets, as if on cue, Montel News talked to Andreas Löschel from the Centre for European Economic Research (ZEW). He expects German lignite use will stay high thanks to the dysfunctional ETS and that Germany will miss its target to reduce emissions by 40% below 1990 levels by 2020.

Federal German energy policy sets wrong incentives. covers (article in German) a new study that concludes that a decentralised power market design would not be more expensive than a centralised one that concentrates renewable energy installations where yields are best. What would be lost in terms of yield would be gained in terms of less need for grid expansion and storage. In addition, there would be less difference between winner and loser regions.

Investment in energy efficiency necessary and profitable. The German Institute for Economic Research (DIW) concludes (press release in German) that German GDP could be 1% higher in the long-term if Germany made use of its efficiency potential.

China lifts 2014 solar PV installation target to 14GW. Given the lack of European ambition, the renewable investment music is increasingly playing elsewhere. Giles Parkinson from reneweconomy reports that China just increased its 2014 target for new solar PV from 12 to 14 GW, after a world record of 9.5 GW (est.) last year. The previous German record was 7.5 GW.

China’s 12GW solar market outstripped all expectations in 2013. Bloomberg New Energy Finance says China may even have installed 12-14 of solar last year.

Beijing bans new refining, steel, coal power to curb pollution. Pressure on Chinese politicians to deal with their pollution problems seems to have gotten quite high. Reuters reports that the city of Beijing will ban the construction of new oil refining, steel, cement and thermal power plants as well as the expansion of existing projects.

India Almost Doubled Its Solar Power In 2013 With Big Plans For More. Ari Phillips from ClimateProgress reports that India added just over 1GW of solar to its grid last year, nearly doubling its capacity to 2.18GW. India aims to have 20GW installed by 2022.

Japan adds nearly 4 GW of PV capacity. Edgar Meza from pv magazine reports that Japan’s Ministry of Economy, Trade and Industry (METI) has reported the installation of 3,993 MW of PV capacity in the country between April 1 and October 31, 2013. Total installed capacity reached about 11 GW at the end of October.

Kenya to generate over half of its electricity through solar power by 2016. Gitonga Njeru from the Guardian reports that the Kenyan government plans to invest US$1.2bn jointly with private companies to build solar power plants across the country.

Changes for Obama climate goals do not need congressional OK: report. Valerie Volcovici from Planet.Ark covers a new report by business people, energy experts and former politicians that has 200 recommendations how Obama can use executive authority to advance his climate agenda.

Value of coal assets ‘could be halved’ if world goes low-carbon. Why some people dislike climate policy: John McGarrity from RTCC reports that according to new analysis by investment bank HSBC strong climate policy could sharply cut the value of coal companies’ assets.

Scientists warn of El Nino ‘devastation’ if global temperatures rise. Tom Radford from RTCC reports on new research that says that climate change could increase the frequency of severe El Niño events, which would create severe problems for the USA, Indonesia and Australia.

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