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Accelerating renewable energy development for reduction of energy dependence of Europe

organised by the Innovative Business Centre in cooperation with the Energy Watch Group at the European Energy Security Forum 2014


26 September 2014

Session 1



We have seen that several support mechanisms and forward looking initiatives exist in the diverse fields of renewable energy, yet, there are still substantial obstacles and barriers for further development of renewables both in financial terms and attitudes.

In my short presentation I look at some of the challenges and give a few examples to show the need for re-contextualization of the renewable energy agenda and making clear links with various issues like energy efficiency, energy security, environment, climate change mitigation, not to forget energy poverty and wellbeing.

I point to some of the interlinkages, highlight possible synergies and call for establishing or reinforcing the policy links among these issues. The geographical scope of the paper is mainly Europe with an outlook to regional (Eastern-Central Europe) or country level aspects.


The EU has committed itself to a low carbon economy, which implies a much greater need for renewable sources of energy. The use renewables is also crucial for reducing the EU’s dependence on energy imports (EU dependency increased from less than 40 % of gross energy consumption in the 1980s to reach 53.4 % by 2012), and its vulnerability to price increases. According to the Commission estimates, by moving towards a low carbon economy EU could save € 175-320 billion annually in fuel costs over the next 40 years.

However, we all see that the current energy and climate framework with 3 interlinked targets on energy efficiency, greenhouse gas reduction and renewable energy) is at risk of being consolidated into a single emission reduction target. This would likely result in an uncertain future for the EU’s renewables sector and other low-carbon technologies. These projects in general face a danger of cost overruns, operational and regulatory risks, problems of carbon price and weather variability, public acceptance. Renewables are associated with very significant investment needs and long payback times. Besides, these projects have the added risk of uncertain load factor due to grid integration challenges. Hence, spreading renewables is highly challenging from a policy point of view.

Focus of my speech is on a coherent policy framework and appropriate financing.

I argue that the foreseen reform of climate and energy policy in itself would not provide sufficient motivation to all member states, business, households and other actors for a wide-scale sustainable energy use.

To give you 2 examples from my country, according to a recent study, 75 – 85% of households in Hungary do not have any savings; 80% of those households planning energy related investments would not take a bank loan to cover the investment costs.

If we look at the allocation of renewables-related development funds in the country, mayor distortions occur, as well.

The link between renewables, climate change mitigation and energy efficiency is obvious. There are other, seemingly unrelated aspects, too. Here I would like to highlight the importance of combining green energy efforts with the alleviation of energy poverty. To put it simply, energy (or fuel) poverty occurs when a household is unable to heat its home or afford to use energy services at an adequate level which hampers the fulfillment of other basic needs of individuals. Based on estimates from EPEE (European fuel poverty and energy efficiency) project, 50-125 million EU citizens are affected.


As the map below shows, a main aspect of energy poverty is manifest across the EU.

% of households unable to afford to keep their home adequately warm


Source: EU Fuel Poverty Network

To flag some of the multiple consequences of energy poverty: across the EU as a whole, 9.8% of the population are unable to keep their home adequately warm, 15.5% live in homes that are damp, rotting or leaking, and 8.9% are behind on payments for utility bills (results of recent Fuel Poverty research based on 2011 data from the Eurostat SILC survey). In addition, energy poverty is associated with a wide range of physical and mental illnesses. According to a recent study, only in Hungary, 5000 deaths per year can be associated with non-adequately heated homes.
If we take a closer look at the characteristics of energy poor households (regardless of the exact definition or threshold) we can see that – besides other features – these households usually inhabit buildings with bad energetic characteristics (including panel blocks in Eastern-Central Europe).

If we look at former energy poverty alleviation strategies across Europe based on income or energy prices (subsidies, tariff policies) have often turned out to be contraproductive and become a burden for public budgets.

It is only when synergies between building efficiency, social welfare and climate mitigation was recognised that the policy efforts have accelerated in parts of Europe (e.g. Energy Performance of Buildings Directive, energy-efficient refurbishments). Studies focusing on Eastern Central Europe show that efficiency improvements and sustainable energy investments would enable many households to escape energy poverty, yet due to their unfavourable financial situation households cannot take the necessary investments and thus this potential synergy remains unexploited in the region.

Another striking example is that while in many countries households are incentivised to use sustainable energy, in my country, the payment of the utility bills are subsidised – mostly providing a driver for higher consumption of imported gas instead of shaping attitude towards energy savings, improved efficiency and greener sources.

This brings me to the issue of financing low carbon investments.


Renewable energy investments, according to recent data from Hungary, are mainly concentrated to upper middle class living environments, as they need a remarkable contribution from the households themselves. This characteristic cuts off low income households from being beneficiaries of renewable subsidies, as well as from harvesting the energy and cost advantages of such investments. Very simply we can say, that most of the public money spent on household energy efficiency and small-scale renewable investments is finally allocated to, and supports middle or high income households, and thus these subsidies are widening the gap between low and high income groups.


The presentation does not allow me to address the issue in its complexity, yet I see an opportunity for vulnerably groups in mainstreaming the ESCO (Energy Service Company) financial model. An other important issue is creating specialized programmes for low income households, marginalized groups – like the Roma community in Central and Eastern Europe, or immigration groups in the West – and financially extremely fluctuating and vulnerable families. In this environment very often the simple electrification of the buildings is not established yet, so cheap, affordable and low tech renewable solutions might move those households from the 19th to the 21st  century.


In my presentation I argued that separate energy policy goals might not lead to wished results. There is a need to show co-benefits of renewables in terms of social and economic aspects. I used energy poverty as an example show that linking different policy goals is likely to tip the cost-benefit balance and help mobilise efforts of the stakeholders in all fields.

As for renewables, possible directions, steps include:

  • developing a common understanding of related concepts, indicators
  • further improving relevant research and establish a proper science-policy interface
  • developing methodologies to quantify co-benefits and co-costs
  • establishing specified, well targeted programmes for disseminating the benefits of energy efficiency and renewable investments for our most needy fellow citizens .

On that basis, further and better targeted incentives can be drawn for the wider use of renewables, which not only help boosting the economy and improving employment in the EU, but also brings about substantial benefits for the environment and the whole society.

To conclude, I argue that the new climate and energy policy has to be comprehensive combining renewable energy target with further aspects in order to bring a socially just transition.













Conference on the role of renewables for EU’s energy security

organised by AEBIOM

22 SEPT 2014



Being personally committed to the energy transition issue, it’s a pleasure to join you at today’s conference. Europe’s energy policy has seen profound changes in the last decades, but it is currently facing a new situation with multiple challenges. Although energy mixes and choices around energy in member states may vary, we have three common and distinct policy objectives: limiting the environmental impact of energy production, transport and use, ensuring a reliable and uninterrupted supply of energy as well as making energy affordable for every citizen and fighting against energy povertyIn my speech I will focus on this threefold challenge that Europe’s energy policy needs to tackle and argue for a need to smartly reframe the renewables agenda by closely linking sustainability, energy security and social aspects.

First, lets have a closer look at the sustainability and climate change aspects of the energy policy agenda. I quote the Intergovernmental Panel on Climate Change (AR5): “The world now has a rough deadline for action on climate change. Nations need to take aggressive action in the next 15 years to cut carbon emissions, in order to forestall the worst effects of global warming.”

This means that the world is (again) being warned of an ecological or climate tipping point by the UN. I say, it might be already late or we might delay too long in reacting to these risks and may see irreversible changes in all parts of the environmental system. Hence, its time for urgent action at all levels (from governments to individuals). We need substantial and sustained reductions of GHG emissions and other environmental impacts related to energy.

If we look at the level of ambition of the EU’s 2030 Climate and Energy Package as it stands, even if discussions are on-going on its details, it is clearly insufficient.

We need more. (Of course, we also have to look beyond Europe’s borders and prevent outsourcing carbon emissions and footprint to other parts of the world.)


However, this is only part of the overall picture. We all sense that energy security and is now higher and higher on the agenda, an issue that has clear linkages with renewables.

Yet, even if there is currently much political will around energy security, providing clear opportunities for you, renewables stakeholders, there are also some threats that I would like to point out.

In the 2030 Climate and Energy Package we have to thrive for much more (at least a 45% share for renewables) than the numbers currently discussed and I will only support a deal that has this ambition.

Beyond ambitious and binding goals at the European level we have to define specific targets at the level of member states, together with well designed, result-oriented and conditional support schemes.


Besides, energy security as a new buzzword and umbrella concept might provide an opportunity for the fossil fuel (e.g. shale gas) or nuclear lobby, which, if successful, can delay the genuinely sustainable energy transition alternatives in the EU. I personally am fully convinced that energy efficiency in combination with a nuclear free energy supply and a rapidly growing share of renewables is the direction we should move towards.

This would also make national and European energy systems less dependent on external sources, less vulnerable and more resilient in an energy crisis situation.


Furthermore, I warn decision makers not to throw out the baby with the bathwater and let go the achievements the EU has made in environment and climate-protection. Sustainability goals and new investments (physical and intellectual) in climate-friendly technologies using energy from various renewable sources need to remain an inherent part of future energy policy in the EU.

In some regions of the European Union (mainly in Eastern-Central Europe and the Mediterranean member states), the issues I have mentioned are accompanied by a third challenge, namely the extensive problem of energy poverty.


Hence, making energy affordable for each and every member of the European society and making sustainable technologies available for all are of utmost importance. (This is also valid at global scale – according to the International Energy Agency estimates provided in the World Energy Outlook, 1,8 billion people lack access to electricity and in some regions, particularly in sub-Saharan Africa and developing Asia, energy poverty either stagnated or worsened as population growth outpaced energy access efforts.)


In Europe itself, it is estimated that 50-125 million EU citizens are affected by energy (or fuel) poverty meaning that these households are unable to heat their home or afford to use energy services at an adequate level. Many households are unable to escape energy poverty and are basically excluded from existing energy modernization programmes (e.g. insulation and improving heating efficiency of homes) due to their unfavourable financial situation.

In my view, at the European level, efforts should be concentrated on providing programs for low-income households to reach energy savings and to help them to get access to renewable energy investments. The latter would allow them to diversify their own energy sources and to build energy autonomy at household level.

We need programmes that do not require an own contribution from disadvantaged households, as savings that they will be able to achieve via energy modernization will cover their loan instalments. We also need low-cost micro projects targeted at the most vulnerable groups.



To sum up, I am convinced that the future European energy policy can only be successful if it integrates and provides solutions for all the above challenges.

Based on our geopolitical position, we, member states and stakeholders in Europe need to deepen our cooperation, aim at an energy transition along the lines of improved affordability, security and sustainability of our energy system.

Energy savings, efficiency and sustainable sources have to be fundamental elements of a renewed, common European energy policy. Here I stress the need for strong cooperation with the energy efficiency community. Supporting each others’ ambitions and exploiting synergies are crucial.


I also argue for a decentralized energy system which requires clearly different developments, investments and infrastructural priorities than a traditional energy network. We have to apply a participatory approach, as vast local use of renewables turns consumers to “prosumers”.

It’s essential to give regional answers for system regulation challenges in order to open up the possibility for higher shares of renewables in some Member States.

We also need to look beyond our borders. Creating linkages, better integration with our neighbors would be a chance of spreading renewables technology and know-how, in addition to helping the sustainable development of these regions.


In conclusion, we need to build on the momentum of the energy security efforts, and we definitely need to a more ambitious Climate and Energy Package that provides proper incentives, brings about behavior change and at the same time, provides benefits for the widest public. Mainstreaming sustainable technologies, new solutions should follow with a view to reducing disparities in the EU.

We should look far beyond progress in terms of infrastructures, systems, technologies and also aim for providing better services and beyond all, improving accessibility to these in the widest sense.

These are the preconditions for boosting investments in renewables.


As a member of the European Parliament I wanted demonstrate that in the EP we have forward looking ideas. As for the next steps (e.g. upcoming decision on energy policy priorities and short-term measures) the European Parliament wishes to play an active role and be as much involved as possible. Here I would like to mention that we are currently working on a European Energy Security Strategy where I act as shadow rapporteur and I aim for integrating the above thoughts and elements into this Strategy.

Nevertheless, I am here also to hear your opinion, your contributions and to gain new insights.

I wish ourselves a fruitful conference, a lively exchange of views. I hope we keep looking for new solutions together.




Carbonbrief.org – tipping elements 




COM paper http://ec.europa.eu/europe2020/pdf/energy2_en.pdf

EEA Technical report No 5/2013 Achieving energy efficiency through behaviour change: what does it take?