This month, the European Commission published development roadmaps for seven key low carbon technologies. Thy relate to wind, solar, bioenergy, CCS, nuclear technologies, as well as smart grids and energy efficiency, for the period 2010 and 2020. 

There is a long-standing policy debate over how best to spur innovation in low-carbon technologies. One option is to let markets ‘pull’ technology development along. According to this reasoning, if governments ensure there is a credible price for CO₂ and other greenhouse gases, then companies will start to develop new technologies with lower emissions in response to this market signal. The other possibility is for governments to use a policy ‘push’ and pay directly for early-stage R&D into new and promising technologies.

The roadmaps follow the publication of a EU Strategic Energy Technology Plan in 2007. It outlined a vision where the EU enjoyed global leadership in a range of low-carbon technologies. Each roadmap has been developed by the Commission in consultation with the relevant industries, and attempts to describe, step by step, how each technology should develop over the next decade in order to fulfil the vision of the SET Plan. Development in each of the technology areas is backed by an European Industrial Initiative, which is a public-private partnership working in each of the low-carbon technology areas.

In practice, governments usually opt for a combination of the two. The SET Plan was the EU’s policy push for low technologies, accompanying the market pull of the carbon and renewable energy targets included in the Climate and Energy Package it unveiled in the same year.

While the Climate and Energy Package and its 20/20/20 targets have successfully made it into EU law, the SET Plan has arguably been somewhat neglected by comparison. The Commission’s new communication implicitly acknowledges this by speaking of the need for the SET Plan now to be ‘taken forward to implementation’.

But implementation costs money and, critically, the Commission’s new roadmaps don’t come with any new funding plans attached. The Commission calls on Member States to dig deeper into their own pockets to fund energy R&D – a recommendation that is unlikely to receive a warm welcome from treasuries across Europe as they seek to recover their battered public finances – and proposes to use the European Investment Bank’s lending power to fund research in promising areas.

The communication also refers to the role of other countries in developing low-carbon technologies. As with other areas of international climate negotiations, there are large inequalities in the distribution of low-carbon innovation. While the EU can justifiably point to its global climate leadership committing early to substantial emission reductions (at least, compared to other developed countries), the US is leading the pack in terms of its expenditure on developing low-carbon technologies, from biofuels to smart grids. A number of international negotiations are in progress to improve coordination between developed countries and sure that they all pull their weight when it comes to energy R&D; another set of negotiations again are discussing how developing countries can access these new technologies.

As reported by EurActiv, it is not only global cooperation that lies behind the SET Plan: there is something of a technology race occurring between different developed countries, with potentially large future gains available to countries who lead the development of new low-carbon technologies. The IEA this week released its technology road map for CCS that envisages an investment of US$6 trillion by 2050. Companies who are successful in developing CCS technologies now will be able to profit from this economic activity in future. Similar arguments apply to other low-carbon technologies like renewable generation and low-emissions vehicles.

There is no question that low-carbon technologies will be vital during the twnty-first century: without them mitigating climate change will be intolerably expensive. How many of those technologies will be European in origin depends in no small part on whether the Commission succeeds in finding R&D funding at a scale that matches its R&D vision.

Ice sculpture in Darling Harbour. Image by Kirsten Spry.

There are only a few months left until leaders of the international community convene in Copenhagen to agree upon a replacement for the Kyoto Protocol. Prime Minister Rudd has already declared that Australia will not go to the convention empty-handed. So far, Australia’s climate change legislation has faced some hurdles with its CPRS bill. However, with the recent approval of the renewable energy target, there is hope that Rudd will be able to keep his promise.

Following the defeat of Prime Minister Rudd’s Carbon Pollution Reduction Scheme (CPRS) 42-30 by the Senate on August 13th, the Renewable Energy Target was split from Rudd’s controversial carbon trading legislation. The new legislation – calling for a 20 per cent renewable energy target – was subsequently approved when brought before the Senate again last Friday.

This new target matches the renewable energy target set by the European Union and means that, within a decade, all Australian households could be powered by renewable energy. While the Greens argue that this renewable energy target should be 30 per cent, it is huge increase from the 8 per cent target in place prior to the bill’s approval.

Upon the failure of Rudd’s CPRS scheme, Minister of Water and Climate Change, Penny Wong, vowed to bring the legislation up for a vote once more in three months time.

“I urge those opposite who have become supporters of renewable energy in recent times to join the bigger fight, the bigger fight against climate change, and I urge them to support when the government next presents the carbon pollution reduction scheme,” says Wong.

With the approval of the new renewable energy targets, Australia is guaranteed at least some legislation on hand in Copenhagen. However, the Rudd government faces an uphill battle in the months ahead to get their carbon trading scheme through.

With one failure already on its books, the carbon trading legislation will need re-tooling over the course of the next three months in order to stand a chance at success.

In its current form, the proposed legislation faced several opponents who will make the same claims in the next round of votes if their concerns are not appeased. These opponents included the Greens, Conservatives and independent senators who blocked the emissions trade scheme due to its impact on the economy, environment, and on jobs for Australians.

With so many groups to appease, can Rudd make the necessary adjustments in time to get his carbon trading legislation through parliament? The timing might be short, but the Opposition has already begun drafting amendments for the bill and Government continues to have talks with the coal industry.

It may be impossible to please every opponent, but hopefully by mid-November, some form of consensus will be reached on an emissions trading scheme for Australia, allowing Rudd to bring a solid example of Australia’s commitment to combat climate change with him to Copenhagen.

Wind turbines beside a road in northern France.

France is known for nuclear energy, but it seems that the winds of change are gathering momentum.  The vast majority of the electricity generated in France comes from its 59 nuclear reactors.   The country has not historically been considered a global leader in renewable energy, but France has taken some bold steps recently to support growth in this industry.
By 2020, the French government plans to generate 23 % of its electricity from renewable energy sources.  France now exceeds Denmark in aggregate wind energy capacity after adding 950 MW in 2008.  France currently has 3400 MW of wind power generation and plans to increase this to 25000 MW by 2020.

The above table gives the total installed wind energy capacity for France according to the Global Wind Energy Council.  With the annual growth rate around 38 % and new wind capacity represents 60 % of all new generation installed in the country last year.  France is now the fourth largest market in Europe after Germany, Spain, and Italy.
The policy framework to encourage wind energy growth has been in place since 2002.  Initially, a tariff of 8.2 euro cents per kWh of wind generated energy was offered to producers for a period of ten years.  Yet, in July 2005, the law was amended to stipulate that in order to be eligible, wind farms have to be built in special Wind Power Development Zones (ZDE).  The ZDEs are defined at the regional level based on electrical production potential, grid connection capacity, and landscape protection.

The concept of ZDEs may be a good one, but it has slowed up legislation and development in the past few years.  The feed-in tariff in the ZDE was reaffirmed in a decree signed on 17th November 2008, after the previous decree was cancelled by the Conseil d’Etat, the highest administrative court, in August 2008.  The French Syndicat des énergies renouvelables (SER) suggested a wind power generation target of 25 GW by 2020, including 6 GW offshore wind power.  This has been adopted by the National Assembly and should be adopted by the Senate in the coming months and passed into functional law by the end of 2009.
As the wind power sector grows, France is taking a close look at protecting the environment, but also at the workforce.  According to the French Agency for Environment and Energy Management, the wind industry in France currently employs 7000 people.  The SER goes on to claim that by 2020, at projected growth rates, the wind energy sector could represent 60000 direct jobs in France.

Wind energy companies are taking note and seizing opportunities.  For example, Vestas just announced an opening of a new office in Paris, La Défense.  Nicolas Wolf, General Manager of Vestas France, explains, “In 2008 alone, we have almost doubled the wind capacity delivered in France compared to the year before, and in the past three years we have doubled the number of employees in our country. It is extremely important for Vestas to be established in Paris in order to continue supporting the growth and the development that we have experienced in the past years.”

There are still several barriers that remain and hinder development of wind energy throughout France.  Some examples include: slow authorization; inadequate grid connection capacity; and zones in which installations are forbidden.  A 2007 study issued by the Ministry of Industry and Economy indicates that 9 weeks are necessary to notify applicants that the application process has been launched and a farther 22 for the process to be completed.   Preparation for the first offshore wind farm in France began with government financing in 2005, but long authorization has delayed construction until the end of 2009 or 2010.

Overcoming existing obstacles to wind energy development is certainly the key to France realizing its wind energy potential.  According to a report authored by A.R. Laali and M. Benard for l’Electricité de France, France appears to have the second largest wind energy potential in Europe, after the United Kingdom.  The biggest potential for growth in the coming years is in the north and northeast of the country.  The winds may be blowing slowly, but they are blowing surely for increased wind power throughout France.

Everyone has groaned in this recession, and with good reason, but on the political front environmentalists groaned a little harder. 2008  seemed a good year as Governments began to cast their eyes towards more comprehensive policy approaches to tackling Climate Change. But green dreams received a shock to the system as the recession hit and political capital for environmental projects dropped as fast (and not surprisingly) as the stock markets.

To some, the decline in enthusiasm was not unreasonable, governments are judged on short time frames between elections and restoring economic growth as easily and risk-free as possible is always going to take precedent over potentially expensive policy initiatives on Climate change. Canada’s Environment minister Jim Prentice confirmed as much when he said the Government would not pursue environmental policy to the detriment of the economy. But in Ontario, there is a bold exception to this pattern, Ontario has announced not merely that it will fight the recession (as everyone is doing), or that it will include some green measures (as some are doing) but that in the Green Energy Act, it will fight the recession by putting environmental measures as the solution, not an added bonus, not a burden.

Everything about this act is remarkable, but let’s start with its timing; the bill, currently in process, was proposed on 28^th February, the heart of the recession. The brainchild of Ontario’s Premier Dalton McGuinty and Deputy Premier George Smitherman the bill has a threefold purpose:

1. To arrest rising unemployment in Ontario by creating 50,000 “green” jobs within three years

2. A large scale effort to stimulate the renewable energy industry

3. To implement conservation and energy savings measures across Ontario.

Although the bill uses many of the usual approaches, certain aspects mark it out as exceptional, other than its timing. A core strength of the bill, is its comprehensive approach, rather than pass a number of small policy initiatives  to tackle certain environmental issues sector by sector, the Green Energy Act is a head on approach. Take for example conservation: the bill would require mandatory energy audits of properties and conservation targets for utility companies – and conservation is only one part of the bill.

The holistic approach has advantages over the smaller one, while introducing change at a greater rate gives the economy less time to adjust, it also underscores the Ontario Government’s resolve to make the environment a core part of the Ontario;s future economy, providing a clear vision of the future will be vital to encourage investment.

This is powerfully underlined in the most radical part of the bill, the “right to connect”, which would make it mandatory for utilities companies to connect to the grid, renewable energy projects ( subject to economic and technical requirements).

As George Vegh, a Toronto energy lawyer, writes:

“The most important thing about the Green Energy Act is that it is not about energy as a supply resource; it is about energy as a contributor to environmental and social outcomes”

This is embodied in the “right to connect”, this framed in deliberate terms to underlines the potential for the individuals to participate, it could precipitate a paradigm shift in the way Governments approach energy in the 21^st century, favouring decentralised grids, even at the likely at least in the short term higher energy costs, from the expense of expanding and presumably upgrading the grid, to the loss of economy of scale power supplies.

The bill would also entail greater regulation in the demand for conservation measure, while not all targets will necessarily be mandatory, the bill’s demand for wide-reaching regulation would see direct intervention of the Government in key markets such as property and the growing shift in values that underline public policy that increasingly see energy issues as public values.

The bill unsurprisingly is not without its critics, Terence Corcoran, provides a vociferous overview of its implications. Regardless of whether you agree with him, Corcoran underlines some salient details about this bill. Some of the important aspects are whether strong decentralisation of power utilities are desirable or whether they will be harder to regulate their upkeep and maintenance, more prone to regional weather variations could make them less efficient. Most importantly is that energy costs will significantly rise, from connection to grid costs, potential instability in renewable markets, such as steel shortages to weather problems creating downturns in electricity, backups will probably be required. Explaining Ontario’s decision to press ahead with a nuclear power plant. Whether the added regulation is the best way to promote energy conservation and to what extent economic growth is truly compatible with environmental policy.

While these remain key issues, nothing should detract from this bill it is a landmark in legislation, and a further example of the capacity of State legislation to tackle Climate Change at a serious level. It should not be forgotten, Ontario has already targeted a 15% reduction in GHG emissions by 2020, the phasing out of coal by 2014 and in 2008 already sources 25% of its energy from renewable sources . It is perhaps another reminder of Prime Minister Harper’s failure to address Climate change on a national level, that has led to a slew of state initiatives, of which Ontario is a leader.