Nov 25 2009
Delivering a Zero Emissions Power Sector: Policy Challenges
By Simon Skillings
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Creating a virtually zero emission EU power sector by around 2030 will require transformational change:
Climate science suggests increasing urgency in the need to reduce carbon emissions;
It is widely accepted that the power sector will play a key role in decarbonising the overall economy: the crucial technologies are already available to create a carbon free power sector and this, in turn, will create electrification options to decarbonise other sectors;
Current momentum behaviour appears to be a long way from that required to deliver a zero carbon power sector over the necessary timescales and some major changes will be needed to the market and regulatory framework.
High level conclusions
E3G has initiated a work programme to drive forward this agenda. This E3G working paper sets out the high level conclusions of our initial engagement process with stakeholders who are close to the policy debate, and the key questions and issues it has raised. Emerging findings include:
Amid much discussion by stakeholders and policy-makers, there is considerable confusion about what needs to be delivered and by when, yet this seems an essential requirement to engender momentum into the political process.
This issue is clouded by the strong ‘optimism bias’ from advocates of a particular technology and from policy makers who assume that their policies will inevitably deliver the desired outcomes. Yet all experience of deployment projects for new/complex technologies suggests that these are plagued by cost and timescale overruns. It is crucial to recognise the risk that policies might fail to deliver desired outcomes.
Delivering transformational change in power sector policy therefore seems to depend critically on a broad acceptance that ‘carbon targets are too important to miss’ and enough money needs to be invested to leave only a small residual risk of failure.
We cannot afford to put all our ‘eggs’ in one delivery ‘basket’. The challenge is therefore to create a roadmap which drives forward a range of technical options and does not at this stage exclude the possibility of any longer term low carbon fuel mix.
The policy landscape across the EU is complex and the potential need for reform is significant. While the ability to drive through key changes will depend on the political opportunities that arise, clearly action at EU level is needed to reinforce the future carbon constraint and associated carbon price; mandate delivery of energy efficiency targets; fund energy efficiency deployment strategies; identify and fund new strategic interconnectors with potential to access significant renewable energy resource; fund smart grid pilot projects; and establish common framework for regulating networks to deliver smart grid. Action by key Member States could provide: deployment strategies for energy efficiency; reform of the regulatory framework to deliver smart grid; and reform of the electricity wholesale market to drive forward investment in low carbon generation.