The EU has set ambitious targets for reducing greenhouse gas emissions and increasing the share of renewables, but current market and regulatory conditions create obstacles to deliver on their ambitions. A new study from DTU shows that citizens can be part of the solutions by partly financing renewable energy.
The green energy transition is a challenge all over the world. Countries, cities and companies express a willingness to act, but there is still an ‘investment gap’ to meet the ambitious goals of GHG emission reductions and renewable energy consumption.
The legislation in several European countries prevents current efforts to increase investments renewable energy generation. The Energy Union of the EU represents the governance framework to support national regulation in this area, and with the right action, the EU’s objectives can move a significant step closer.
EU citizens can help -finance renewable energy
A new study from DTU concludes, that EU citizens are willing and financially capable to collectively invest in future wind energy developments administered by community-based entities. Their aggregated financial investments have the potential to bridge the investment gap to meet Europe’s 2030 renewable energy target.
Cristian Pons-Seres de Brauwer, a PhD researcher at DTU Wind Energy, has investigated the extent by which European citizens can contribute in realising Europe’s renewable energy target through the financing of community-administered wind energy developments across the EU-27 (+ UK). The study has been recently published in the leading journal Renewable and Sustainable Energy Reviews. The research suggests that every fifth EU citizen would be willing to invest in the development of community-run wind farms.
We can therefore see that there is a substantial potential for citizen-financed renewable energy to expedite Europe’s green energy transition,” says Cristian Pons-Seres de Brauwer, first author of the paper.
Read more here.
Stimulation is required
According to estimates, in the current decade approx. € 380 billion annually is needed to achieve the EU’s climate and energy goals in 2030. Estimates show that in 2018 there was a lack of investment of € 179 billion. In other words, additional funds must be mobilised to close this investment gap in the coming years.
“The problem is not the lack of money to invest – our study actually shows that there is indeed a lot of money to invest – the problem is the regulatory framework to allocate public financial support. The lack of investment is the manifestation stemming from a regulatory problem,” says Cristian Pons-Seres de Brauwer.
"The results of the Study indicate that citizens financing community-administered wind farm development can mobilise investments of up to € 176 billion under current market conditions (i.e. without any state aid or subsidy scheme). This could potentially halve the investment gap that the EU has reported" says Cristian Pons-Seres de Brauwer.
However, it requires that citizens are "supported" to do so – among other things through appropriate investment conditions and enabling legislation.
In light of the EU's ambition to have citizens "take ownership of the energy transition, benefit from new technologies, and participate actively in the market", Member States must transpose EU legislation on citizen-driven forms of renewable energy generation into national enabling frameworks by June 2021, as per the governance framework of the EU’s “Clean Energy Package’ (CEP). However, legislative efforts will remain handicapped without an empirically validated knowledge base. This may lead to misguided policies hindering citizen-financed community wind energy.
"Our study addressed this 'knowledge resource 'gap' through an empirical analysis that substantiates the need for easily accessible, risk-insured community investment options and revenue mechanisms to unlock citizens' financial participation in wind energy," Cristian Pons-Seres de Brauwer explains.
Listen to a podcast on the subject:
Citizen finance: 176 billion Euros for renewables (podbean.com)