The EU Energy Commissioner says we need to do much better on using technology to develop a green society for the future generations and while much has been achieved there is a lot to be done if we are to leave a better world for our children.
I have had the privilege of being the EU's Energy Commissioner for five years. And I have had the privilege of learning so much during this time.
It has indeed been a privilege, but at the same time, so much of what I have learned makes me truly fearful for the future of my children; let alone that of my grandchildren.
We see climate change quite literally happening around us. We see the polar ice melting year by year. We know that local climates are changing today, causing drought, hardship and poverty. We know that our actions are causing species extinction. We know that this is only the tip of the iceberg and that the window in which we have to act is short and is closing fast.
We know that if we do not act, we will leave a planet with widespread mass migration and the starvation of millions, if not billions, and a planet where wars are fought for water.
We used to fear that there were enough nuclear weapons on earth to destroy the planet. But now we know that there is enough oil, gas and coal to do pretty much the same job.
But whilst there are a lot of fossil fuels, they are in a handful of countries which have very little incentive to keep prices at reasonable levels. It is inevitable that global demand for energy will rapidly increase over the next decades as the developing world gets richer, something we should also rejoice at, and as the world's population grows to 9 billion, something that we should not.
If we do not act, do we really think that, decades from now, the EU will have a secure and reliable energy supply, and that our children and grandchildren will be meeting their energy needs at 70$, or 100$, or even 150$ per barrel?
Let us concentrate for a minute on the challenges facing us in practical terms.
T he IPCC believes that, in order to limit global warming to between 2-2.4°C above pre-industrial levels, the world needs to cut greenhouse gas emissions by between 50-85% compared to today. The G8 has, earlier this year, taken the most optimistic possible interpretation of this, concluding that we need to cut emissions by 50% by 2050. But, on a business-as-usual basis, global emissions are set to increase from just over 50 000 Gt today to more than 80,000 Gt in 2050, with most of the growth coming from the developing world.
So let us not ask at this conference whether Copenhagen will be successful. Let us not question whether it will be possible to ask our citizens to embrace the changes that will be needed if we are to secure a global agreement. But let us instead ask what needs to be done to deal with climate change and how to set a course to continue European leadership to show that it can, and will be done.
It is a simple fact that, to prevent climate change, the developed world, including the EU, will have to reduce its emissions by 80% by 2050 compared to today, probably more. And on top of this, the developed world will also have to contribute to paying for the cost of reducing emissions in the developing world. Indeed, given the huge cuts that will be needed in the developing world to prevent existing emissions levels from spiralling out of control, the argument that the EU can achieve its emissions cuts by investing elsewhere; somewhere and somehow cheaper, is nonsense. We will have to help the developing world to reduce its emissions in addition to our 80% cut at home, not instead of it.
We know that this is a global problem. Greenhouse gases know no borders and we are all emitters. But of course the responsibility is not evenly distributed. The map behind me illustrates this point well, showing the way the world would look, if country territories corresponded to the level of emissions of each country in 2004. We can see clearly, that we do need to make an effort to ensure that the burden of paying for reducing climate change must be fairly spread. We cannot ask Africa to pay for mitigating climate change that it has not and will not be responsible for.
So what does an 80% greenhouse gas reduction mean in practice for the EU?
Non-CO2 greenhouse gas emissions from agriculture and industry today make up about 20% of the EU's emissions. These can be reduced, but only to a limited extent; we certainly cannot simply "export" this problem. Emissions from air transport, maritime and large freight vehicles can be reduced through measures such as efficiency and biofuels, but will be tremendously difficult to eliminate. So in practice, these sectors will take up much, if not all, of the emissions that the EU will be able to emit in 2050.
So, it is an inescapable conclusion that by 2050, to meet our absolute and most basic obligations towards our children and grandchildren, the EU will need to have a zero-carbon electricity system, a zero-carbon road and rail transport system, and zero-carbon heating and cooling for our homes and businesses. Seen this way, we see the magnitude of the challenge before us, as illustrated in the graph behind me.
Let me quote a 14 year old girl named Severn Suzuku who silenced the United Nations for 5 minutes at the 1992 Rio Summit. She spoke of climate change and pollution, and then she said the following:
"In my life I have dreamt of seeing the great herds of wild animals, jungles and rain forests full of birds and butterflies, but now I wonder if they will even exist for my children to see. Did you have to worry about these things when you were my age?
All these things are happening in front of your eyes and you act as if we have all the time we want and all the solutions.
I am only a child and I do not have all the solutions. But I want you to realise, neither do you."
But these solutions can and must be found. With all of our determination, they will be. Indeed, we already have many of the solutions in front of us, we just need the determination to use and develop them.
Energy efficiency offers us huge possibilities to reduce our energy consumption, and to do so in a way that actually makes us richer as individuals and more competitive as industry. The EU is one of the world-leaders in seeking to harvest these energy savings, and many other countries are beginning to copy our legislation on labelling, eco-design and buildings. But we have only begun the investments that we need to make in energy efficiency and so much more needs to be done. If all our buildings need to be heated and cooled without producing carbon dioxide, for example, practically every single one of the55 million buildings currently in the EU will need to be deep refurbished in just 40 years and all new buildings will need to be practically zero-carbon.
And renewable energy technology, which has made massive strides, will need to further improve. Already today onshore wind, hydro, biomass and some large-scale PV is competitive with mainstream electricity prices. Offshore wind and smaller PV is making huge strides. 4th generation nuclear will be safer, and produces less waste.
But if we are to transform our whole energy system to be really zero-carbon in little more than one generation, we will need all of these technologies and more. We will need next generation biofuels, concentrated solar power, wave and tidal energy; all of which are showing great promise in the trails presently being financed by grants under the 7th Framework Programme.
And the cost of offshore wind and small-scale PV will need to be driven down. We will need new energy storage mechanisms and a smart grid. We will need carbon capture and storage to work, and to work effectively, competitively and safely.
It is therefore a simple fact that there is plenty of renewable energy available in Europe to give us all the energy we will ever need. We know this. But we need further technological development to enable us to use it easily, sustainably and competitively.
So, the challenges and opportunities are exciting and they are far from beyond us; as J.F. Kennedy famously said "Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings."
So where does the EU stand today, and where does it have to go?
I think that the EU has much to be proud of in the manner that it has reacted to the challenge of climate change and energy security over the last years.
We have been investing in renewable energy for over a decade now; the first EU Directive on renewable energy was adopted already in 2001 and the level of energy produced from the wind and sun in Europe has increased exponentially since then. Sixty per cent of the world’s wind capacity was installed in Europe at the end of 2007, and European companies had a global market share of 66 per cent of turbine sales. In other sectors, such as solar photovoltaic and some areas of bio-energy, we see a similar story.
Furthermore, the recently agreed 20-20-20 package is world-leading, and many countries are looking to copy us. But few, if any, have yet had the courage to actually do so. It provides the basis to put the EU in a place, by 2020, where an 80% greenhouse cut is really possible by 2050.
And above all, the EU has been leading by investing in technology.
Currently the EU invests 3b€ per year in low carbon energy research. The public sector represents 30%; 20% of that (6% of the total) at European level through the 7th framework Programmes, the remainder through support in the Member States. All of this support acts to catalyse investments by EU industry, which represents 70% of the total. And this has had spectacular results, in terms of technology, in terms of reducing greenhouse gas emissions, in terms of reducing our dependence on imported energy, and in terms of jobs. Let me share some of our successes with you.
In 1983 the EU framework programme took the risk to support the first 1MW windmill that the market broadly took up afterwards. In 1993 we financed the first demonstration of the 3.5 MW wind mill, and the same happened, giving EU industry a huge advantage that endures today. In 2006 we have brought turbines offshore, in the coasts of Scotland, investing in the demonstration of the world's first 5MW offshore windmill. With the recovery plan, we are now investing to give EU industry the edge in making offshore competitive and a European growth industry, financing large scale demonstration projects in North and Baltic seas.
And, we are already investing in the next generation; testing the world's first 7 MW windmill. It is fair to say that without EU support they may never have happened first in the EU, these projects are so big, and so were at the time so risky, they need European support.
In 2000 the EU supported the demonstration of the first European industrial scale concentrating solar power plant. The 11 MW solar thermal power plant at Sanlucar la Mayor in southern Spain represents an energy milestone. Inaugurated on 30 March 2007 by the Prime Minister of Andalucia, the plant is the world's first commercial solar thermal power plant based on tower and heliostat field technology that generates electricity in a stable and commercial way. It has huge potential.
A similar story can be told for PV. In 2005, the world production of photovoltaic modules was 1760 MW compared to 90 MW in 1996. Over the same period, the average module price has decreased from about €5/W to about €3/W. In Europe, the installed capacity has increased 35-fold in 10 years to reach 1800MW in 2005 and the average annual growth rate of about 35% in the past decade makes photovoltaics one of the fastest growing energy industries. The EU is now investing in the integration of PV panels in construction elements; this has major opportunities for reducing costs and giving EU industry another head start.
In the early 90's the EU supported the development of biodiesel technologies, which were deployed successfully in several Member States. In 2003 we supported the largest bio-ethanol demonstration fleet ever. Thanks to this, European biodiesel and bio-ethanol are now a competitive option in times of high oil prices. In 2007 we have embarked on the first industrial pilot projects of second generation biofuels. We are already planning the next step moving to bio-refineries and algae fuels. This will give us the transport and aviation biofuels that will replace oil.
These are just examples of the great things that we have already achieved with the limited means available today. We are also investing in wave, CCS, heating and cooling energies and tidal energy.
So let me focus for one minute on the opportunities facing the EU, not just the challenges.
Our low-carbon energy industry today, which exists quite simply because we have invested where others watched, has produced 1.4 million jobs, a figure that could double by 2020, and exports of a value of 3.7 b€.
We are exporting our 3, and 5 MW windmills. These probably would not have been developed in the EU were it not for our determination to take a risk by supporting these technologies before they were mature. We are exporting our leading-edge PV panel systems, our bio-gas plants, our biofuel expertise, and our concentrated solar technologies.
In 2002, Lord Stern's report predicted that renewable energy sectors would capture a global market of 500bn € by 2050. This is a huge figure and illustrates the opportunity for the EU. The production of low carbon energy, a technology driven industry, will without doubt be the world's largest industrial sector by mid-century. But what really brings home this point is the fact that the 500bn € market for renewable energy predicted by Lord Stern for 2050 will actually be reached by the end of this year, thirty years earlier than predicted.
The real question for us is therefore: "do we have the nerve, the determi nation, to build on our world-leading position that our initiative and courage has given us?"
We have to admit that Europe has not been good at seizing these opportunities in the past; we have created, and lost, to many technological advantages. This is however one that we must not allow to pass.
And the signs are good that we will indeed seize the opportunity.
Firstly, spending on energy technologies in the 7th Framework Programme will increase year-by-year until 2013 when we will be spending 400 million Euros on energy.
Secondly, the EU made a major commitment to invest in energy technology in the Energy Recovery Package for Europe. The Heads of State agreed to spend, over the next two years, an additional one billion Euros on carbon sequestration demonstration projects, 565 million Euros on cutting-edge offshore wind demonstration projects, and very large sums on catalysing the infrastructure necessary to bring the increasing levels of renewable energy to customers. The calls for these have been completed in record time and will give a real boost to this technology area in the EU.
Thirdly, in my view the most important element of the 20-20-20 initiative, the Commission has tabled and the European Council and Parliament has endorsed, the Strategic Technology Plan. The SET Plan proposes firstly that the EU needs to better coordinate its low carbon energy research, to ensure that we squeeze every cent of value out of the money we spend, and secondly, that we need to spend more.
The SET Plan has already led to real changes in the way that the EU pursues energy research. The Technology Platforms and Industrial Initiatives in Wind, Solar, Bio-energy, CCS, Nuclear, Smart Grids and Smart Cities are producing real results. They have led to the development of the carefully costed technology road-maps that will be discussed later today.
These represent a technology partnership between industry and citizens. They identify exactly what needs to be done to get the EU where it needs to be by 2020, what it will cost, and who should pay. They are unique in the world, and very, very important. But they are a process, not an end result. They need to be a dynamic tool; evolving as technology develops, and now need to have the courage to look as far ahead as 2050.
The second priority of the SET Plan highlighted the need for us to spend more. This is tough during a period of tight budgets, but this has to be one of our very highest priorities. Two weeks ago the Commission adopted the SET Plan Financing Communication, which concluded that the EU needs to at least double the amount that we spend on low carbon energy research; at EU, national and at industry level.
Discussions will now begin on agreeing this with the Council and European Parliament, and I am confident that, with enough determination, we will succeed in making this a reality.
Ladies and gentlemen, I quoted earlier Severn Suzuku. She finished her speech to the United Nations with these words:
"You are deciding what kind of a world we are growing up in. Parents should be able to comfort their children by saying "Everything's going to be all right. It's not the end of the world and we are doing the best that we can". But I don't think that you can say that to us any more. Are we even on your list of priorities? My dad always says you are what you do, not what you say. Well, what you do makes me cry at night. You grown ups say you love us. But I challenge you; please let your actions meet your words."
Well, 17 years later, we are listening. We are trying. And we must, and will, try harder.
So let us imagine how our European society will look in 2050 if we have the courage to invest massively today in low-carbon energy technology, and the determination to take the "dizzying leap" of committing that our energy economy will, by 2050, be carbon-free and act now to make it reality.
We will have a society where our air is clean.
We will use our energy wisely, and this care will teach us and our children to use the earth's other, scarce resources, wisely.
We will have better houses.
We will have better, saner, transport.
We will all be proud of what Europe has done to give future generations a planet that can measure up to the life that we enjoy.
We will no longer export in excess of 500 Euros per year for every EU man, woman and child to oil and gas supplying countries that we do today; instead choosing to invest at home in jobs.
And we will have an energy industry that is thriving, growing, and the envy of the world.
These, surely, are reasons to dare.
