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Poorly planned renewables cost EU €122bn

Lack of power interconnections and badly located renewable energy capacity have cost the EU $140bn (€122bn), according to the World Economic Forum.

Low interconnection capacity and poor cooperation between countries on renewables cost $40bn, a report published during the forum’s annual meeting in Davos on Tuesday indicates.

Countries’ wish to maintain national sovereignty over energy policy and market problems such as generous solar incentives in Germany have led to suboptimal deployment of renewable energy resources, according to the study.

The EU could have saved a further $100bn if each member state had invested in the renewable energy source that it can most efficiently deploy, the report states.

Germany installed 600% more solar photovoltaic capacity than Spain despite the southern country getting around 65% more solar irradiation. By contrast, Spain has installed a comparatively large amount of wind capacity at 23GW despite having less wind than northern member states.

The report warns that a lack of coordination among countries’ energy plans has caused significant overcapacity.

EU leaders in October set an indicative interconnection target of 15% by 2030. The Commission is expected to produce a paper next month on how the existing 10% target for 2020 can best be achieved.

Regulators should seek to harmonise incentives across borders and boost interconnections, the report recommends. It calls on policymakers to focus renewables incentives on fewer, less costly technologies, such as onshore wind.

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Issue 39