Editor's note

International Internet Magazine. Baltic States news & analytics Wednesday, 16.01.2019, 12:40

Transition to renewable energy: new Baltic States agenda

Eugene Eteris, BC, Riga/Copenhagen, 12.01.2018.Print version

The EU's objective is to consolidate the industrial basis for renewables in the member states and to gather industry support to facilitate growth opportunities for clean energy transition. First high-level meeting on connections among renewables, clean energy, industrial competitiveness and innovation took place in Brussels this January.

The European Commission in its proposal "Clean Energy for All Europeans" suggested further support for industries in the states to take advantage of the growth opportunities arising from renewable energy transition. Three main spheres are covered by the EU's proposal: renewables, batteries, and construction. For example proposal for the renewables is aimed at create the EU "renewable energy industry", including SMEs and renewable energy associations. 


Main objectives on renewables

The objectives on renewables are to strengthen the EU states' industrial basis and the European value chain for renewable energy technologies, including issues of system integration of renewables. Similarities and differences, strengths and weaknesses across the EU states in sustainable competitiveness should be taken into account in order to build a complementary strategy across sectors and across the value chain among the EU states.

At the same time, the states shall identify key sectors and segments of the value chain where the EU industries could be at the same time competitive at global scale to enter new markets.

With this in mind, the member states shall be aimed at: idetifying global trends that may affect their position as European/global leader in renewables; catering synergies across renewable energy technologies and sectors with integrated European approach to "industrial renewables"; designing industrial policy initiatives in addressing common gaps and needs across technology sectors to improve the technologies' competitiveness (e.g. in access to risk finance for innovation or specific regulatory issues).

Source: Commission press release on "Clean Energy for All Europeans" in: 



Activating the Baltic States' renewable energy

European Commissioner for Climate Action and Energy, Miguel Arias Cañete underlined that the member states have to consolidate their industrial basis for renewables in order to gather industry support for the growth opportunities of the clean energy transition.

That means that politicians, economists, CEOs and industry leaders, including SMEs in the Baltic States have to organise "fruitful dialogues" focussing on reinforcing competitiveness of the renewable energy industry's value chain. Besides, the role of science, research, innovation and trade policy strategies shall be at the center of politico-economic decisions.

The Baltic States are advised to take part in the EU high-level meetings, in public events around three sections of the "Clean Energy Initiative"; some will be organised during the EU Industry Days on 22-23 February 2018. This will also serve as a spring board to assert EU industrial leadership in low carbon energy technologies to be showcased in the 9th Clean Energy ministerial meeting and the 3rd Mission Innovation meetings in Malmö and Copenhagen during 22-25 May 2018.

Source: Commission's website "EU Clean Energy Industrial Competitiveness and Innovation Forum", in: https://ec.europa.eu/info/news/launch-eu-clean-energy-industrial-competitiveness-and-innovation-forum-renewables-2018-jan-08_en?pk_campaign=ENERNewsletterJanuary2018


Facing challenges global market share of EU companies. enewables

The EU renewable energy industry faces two important challenges: first, in the rapidly developing global market for renewables, the share of European investments in the development of renewable energy technologies in Europe has diminished from 45% to 18% of global renewable energy investment during 2011-16.

At the same time, the international market for renewables is developing rapidly; in line with it, the EU market for renewable power is expected to grow by 510 GW of new renewable energy capacity up to 2030, whilst the global market for renewables is expected to be between 5000-6000 GW. Similar developments can be found in renewables' deployment in heating/cooling and the transport sectors.

Second, EU's global leadership in key energy technologies is facing increasing competition from other regions with consequental decline of EU companies in the global market. it

EU's global leadership in key energy technologies is facing increasing competition from other regions. For example, the global market share of EU manufacturing companies of solar PV modules and wind turbines continues to decline even though in other parts of the global value chain the EU states continue to lead.

At the same time, ocean energy, concentrated solar power plants and biogas installations around the world continue to rely on European technologies. It requires a strong European market to retain these technology leadership among the EU states. Whilst advanced manufacturing capacity is a necessary condition to ensure that the EU continues to innovate in energy- and manufacturing technologies, it is also becoming evident that with lowering technology costs the share of added value and associated job opportunities is shifting to the downstream sectors. 

Simultaneously, upstream R&D, inventions and patents as well as breakthrough technologies and new business models are key elements along the value chain to gain the share of new global markets. For example, in 2015, European companies were holding about 30% of all renewable energy patents; its share has declined in the past years.


The role of EU funding

The EU’s Horizon 2020 decided to invest over €10 billion in clean energy research and innovation during 2014-20, of which an estimated €3 billion are for renewables. Industries, the research community, the EU states and the Commission have also worked and continue building synergies in the framework of the European Strategic Energy Technology (SET) Plan.

Costs and performance targets in renewable technology will be finalised during 2020-30.

It is important to mention that the European Commission is currently chairing, in cooperation with the Nordic EU states (through "Clean Energy" ministerial meetings and "Mission Innovation") in order to double state-directed clean energy research and development investment in the period 2015-21.

The Commission is also in the preparatory phase for the development of the ninth research framework programme (FP9), as the successor of the current Horizon 2020 Programme for Research and Innovation in order to include renewable energy into FP9 framework. 


Trade in renewables

Since 2011, the global market for renewables has rapidly expanded: the EU cooperates currently with 174 countries on renewable energy targets. EU trade flows in the energy sector have increased: thus, in 2015, the sum of import and export was more than two times higher than it was in 2000, with an average increase of 7% each year. This is particularly due to the growing relationship with China and other countries in western Asia and northern Africa. These trade links complement the already established partnerships with the United States and other countries, mainly Russia and Switzerland.

Based on the available data, the value of EU exports exceeded the value of imports, indicating a positive trade balance for most renewable energy technologies.

On the other side, in the solar PV sector (the EU imports modules, but exports manufacturing equipment and inverters) the EU has a negative trade balance. The EU exports in energy sector differr over time: between 2000 and 2015, exports to countries in North America have seen a decrease of 32%, although a reduction from 29% to 19% in the United States.

In contrast, in the same period, the share of European exports to western Asia and northern Africa increased by 35%.

In addition to issues affecting trade in goods, there are questions concerning EU companies' efforts in establishing renewable energy contracts and projects worldwide.

For example, subsidized financial support to third-country competitors (either directly via extremely favourable loans or indirectly via more opaque financial support measures) puts EU companies in an unfavourable competitive position with clear impact on their global market share.

In this context, the European Commission tries to update existing or develop new trading agreements that – in many cases – can includes specific stipulations for energy technologies. 

Furthermore, the European Commission has established energy policy dialogues with non-EU countries to exchange information on policies to support renewable energy markets.

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