Renewable energy will deliver real savings to EU citizens: E&Y report
- 11 June 2014
LONDON: European households could save up to €474 billion on energy costs over the next 40 years if the EU prioritizes a low carbon energy transition and promotes greater energy efficiency, new analysis from Ernst and Young highlights.
Macro economic impacts of the low carbon transition, which was commissioned by the European Climate Foundation, provides strong evidence in favor of the Clean Revolution.
Drawing on multiple reports, Ernst and Young recognizes if the EU moves to sustainable energy it will reduce its total fuel import bill by €518-550 billion annually, delivering fuel savings for consumers of up to €180 billion per year in 2050.
The analysts point to data from the European Commission which acknowledges that under a business-as-usual (BAU) scenario, energy infrastructure investments across all sectors of the economy would rise to €1000 billion per year over 2040-2050.
Similarly, Europe’s import dependency for oil is set to increase to almost 90% in 2050 as compared to the 74% in 2010, the Commission has noted.
In fact, current Commission projections estimate that due to the rising costs of fossil fuels, coupled with the need to update infrastructure, the after-tax electricity bill of EU consumers will have risen 43% from the 2005 level by 2030.
These findings have led Ernst and Young to remark that choosing to ignore the risks and continue with BAU will be "far from a 'comfortable' continuation of the present day situation".
Having evaluated the research to date, the report's authors believe by decarbonizing the energy market, the EU stands to benefit economically for two reasons.
Firstly, the move to renewable energy will make the bloc less vulnerable to fossil fuel price spikes and their negative impact on price stability. And secondly, because it is likely that the energy savings to EU consumers which result from decarbonization will be returned to the European economy through the purchase of goods and services originating from the member states.
Tom Brookes, Managing Director of the Energy Strategy Centre at the European Climate Foundation, said: “This synthesis of expert research makes clear the unparalleled opportunity energy efficiency and renewable energies offer to reduce Europe’s dependency on imported fuels."
“European consumers and European industry are looking to policymakers to consider this opportunity when deciding on the level of ambition of the EU’s climate and energy package for 2030”, Brookes continued.
2030 CLIMATE AND ENERGY FRAMEWORK
In January of this year the EU Commission suggested a proposed target for 2030 of 27% renewable energy, along with a 40% cut in greenhouse gas emissions below 1990 levels. But due to the crisis in Ukraine the EU Council has delayed a decision on these goals until October 2014.
Commenting on the Commission's proposal, Mark Kenber, CEO of The Climate Group, noted that “having a binding goal will help underpin investment in clean energy – something which an emission only target would not have done.”
He argued that the 2030 framework can act as a real driver for clean economic growth if member states commit wholeheartedly to the realization of the framework.
“However, governments and businesses must also see this figure not as a maximum to be reached but as a minimum to be surpassed,” the CEO observed.
The Ernst and Young literature review comes just a week after a report from leading management consultancy, Accenture, found that an interconnected EU renewable energy market would deliver saving of up to €20 billion each year.
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By Alana Ryan