Ensuring secure and affordable energy
“Ending poverty and ensuring sustainability are the defining challenges of our time. Energy is central to both of them.” World Bank Group, President Jim Yong Kim
Europe’s industrial competitiveness and the overall functioning of society as such are dependent on reliable energy supply. One of the biggest challenges that the EU is currently facing is ensuring safe, secure and sustainable energy that is both economically viable and available to end users at affordable prices. The entire sector in EU member states, covering extraction, generation and distribution, directly employs about 1.6 million people and channels an added €250 billion to the economy. The EU countries are well aware of the benefits of coordinated action in this highly strategic field. This has led to establishing certain common rules and goals, although the project of the Energy Union is still a work in progress.
Renewables and efficiency for more stable economic growth
The energy sector could seek to contribute to economic growth stability by achieving lower energy price levels. From the point of view of economic development, long-term energy efficiency should not create obstacles for stable and sustainable economic growth. In other words, meeting energy security and environmental preservation goals should not have negative impacts on GDP dynamics.
Renewable energy and energy efficiency are critical not only for combatting climate change, but also for creating new economic opportunities, since investment in this field has the potential to stimulate economic growth. Insulating houses, installing new energy-saving equipment, renovating buildings and carrying out energy audits: all these activities stimulate economic growth. The use of renewable energy will satisfy the low energy needs of these buildings, thereby reducing CO2 emissions. The energy performance of buildings directive requires EU Member States to set up a system of energy performance certificates for buildings.
The role of the EU
The current EU objective is for 20% of the energy consumed in the European Union in 2020 to come from renewable sources (and at least 27% by 2030). Promotion of this objective throughout Europe has led to a spectacular increase in the production capacity of renewable energy sources. By 2020, the renewables and energy efficiency sector are expected to employ over 4 million people across the EU.
In this period of transition to a world without fossil fuels the main question for Europe is considered to be whether long-term challenges shall be met on a supranational level or what form of European cooperation the Member States will agree on for future decisions regarding public funds allocation and investment plans into technologies of the future. Should the role of the EU just be one of overall coordination? Or, in some cases, can it financially support certain projects which are essential but involve too many economic risks for businesses and countries alone?
The EU continues to invest enormously in diversifying its energy sources and energy routes. In 2014, global investments in renewable energy increased by 17% to $270.2 billion. Renewable energy excluding large hydro energy plants accounted for 48% of new generating capacity installed globally in 2014, and the share of renewables in global electricity generation increased to 9.1%. This is equivalent to avoided greenhouse gas emissions of some 1.3 gigatonnes annually.
In 2014, the share of renewable energy in the gross final energy consumption in the EU equaled 15.3%. In the same year, EU invested in renewable energy around $66 billion. The increase in renewables sends a strong message of opportunity to world leaders and delegates, who are negotiating towards a new, universal agreement on climate change, scheduled to be reached in Paris by the end of 2015 and to come into effect in 2020.
- Energy sector as strategic economic field,
- Stable economic growth,
- Renewable energy and energy efficiency,
- Investments in energy efficiency and renewable energy.
- EU Member States,
- Third countries (especially EU energy suppliers)
- International Financial institutions (IFIs),
- Public sector,
- Private stakeholders.
- What is the role of energy sector in overall economy and in the economic development?
- How does the energy sector contribute to stable economic growth?
- How do renewable energy development and energy efficiency contribute to economic growth and to reducing CO2 emissions ?
- Should the role of the EU just be one of overall coordination? Or can the EU financially support certain projects that are strategic but involve too many economic risks for businesses and countries alone?