In March 2007, EU leaders committed themselves to achieving 20% renewable energy use by 2020, a pledge that was followed up on 23 January by Commission proposals that featured differentiated targets for each member state based on GDP (see EurActiv's LinksDossier and related coverage).
A 10% mandatory increase in biofuels for transport was also included in the proposals.
Advocates of renewable energy tend to agree that renewables like solar, wind, hydro and biomass can easily contribute 20% or more to the EU's energy mix by 2020 as long as certain conditions are met.
Industries and homes need to use energy more efficiently in order to take pressure off the EU's growing energy demand. And conditions for accessing electricity grids need to be improved so that power generation is no longer dominated by relatively few large plants but spread to an increasing number of smaller electricity producers.
But sceptics say that a shift towards decentralised power generation with a high share of renewables raises numerous concerns, in particular with respect to the stability of electricity grids and the quality of the power that flows through those grids.
* Renewables - an unreliable source
Renewables are an unreliable replacement for electricity generated by fossil or nuclear fuels, since energy sources like the wind and the sun can be neither controlled nor stored, say opponents of an overly ambitious push for renewable energies.
Grid safety concerns are also frequently raised: if wind energy output, for example, suddenly increases dramatically over a short period of time, grids can become overloaded and shut down, leading to blackouts. On the other hand, renewables may not be able to respond quickly enough to sudden increases in demand, causing losses or significant decreases in power flows.
But the renewables industry argues that these issues can be largely resolved through grid restructuring, better coordination and safety upgrades, with any remaining obstacles to be addressed by further research and development.
Researchers at the University of Kassel in Germany, for example, have developed the concept of a Combined Power Plantexternal . Using a combination of renewable energies as well as hydro pumps that store excess wind energy in the form of water in storage lakes, the researchers claim that renewables could, by 2050, deliver all of Germany's power needs without any major concerns over supply disruptions.
* What price tag?
Beyond technology and grid safety concerns, the financing of renewables is set to remain a hot topic in 2008, with the Commission expected to put forward details about how the EU will be able to finance its 'strategic energy technologies' .
At present, there are wide discrepancies between member states in terms of how renewble energies are financed. Germany and Spain, for example, have seen a 'boom' in solar and wind installations, which benefit from state support through guaranteed feed-in tariffs. The UK, on the other hand, has not provided renewables manufacturers and consumers with these kinds of incentives, leading to a significantly lower level of renewable energy development in that country.
The Commission, as part of its 23 January proposals, widened the scope of what is permissible under EU state aid rules in terms of subsidising renewable energies.
But 'it is vital that current efforts to drive forward the internal energy market are not negated by ring-fencing up to 35% of the EU electricity market via non-market [renewables]-support schemes,' argues Eurelectric, the electricity industry association, echoing concerns that the renewables industry may become 'subsidy addicted'.
Eurelectric is pushing for greater use of cross-border trading in renewable guarantee of origin (GO) certificates in order to stimulate what it calls 'market-compatible mechanisms' for achieving a low-carbon economy.
But doing away with support schemes at this stage would spell disaster for the EU's solar industry, says Winfried Hoffman, president of the European Photovoltaic Industry Association (EPIA). Hoffman is confident that, in the coming decade, consumers should benefit from 'dramatic price drops' for solar panels, signalling an end to the need for subsidies.
His views are echoed by other representatives in the renewables industry, who say that state support is needed in the short term and that, in the absence of a truly competitive internal energy market, GO trading simply favours large incumbent energy firms who can afford the higher upfront investment costs necessary to participate in the schemes.
Modalities for GO trading were also included in the Commission's proposal, although initial plans for mandatory trading were taken out of the final text.
* A heated debate
The issue of whether or not renewables can 'deliver' will be the focus of a debate during the 21-22 February European Business Summit (EBSexternal ) in Brussels. Speakers will include members of the European Commission and the International Energy Agency (IEA), as well as a representatives of research institutes and the private sector.