Cash-strapped companies that built too many coal and gas plants are lobbying strongly against tough EU targets
Europe’s top ten energy utilities which shunned renewables are trying to protect loss-making fossil-fuelled plants by derailing tough binding targets for wind and solar, Greenpeace said in a report today.
The report says that the EU’s biggest power companies, which generate over half of the power in Europe, draw on non-hydro renewables for just 4% of their output and are now saddled with uneconomic fossil fuel-powered plants following a decade of overinvestment in coal and gas.
“Having missed the train of the renewables revolution, energy companies are now trying to derail it by putting pressure on EU governments to turn back,” said Greenpeace’s transport and policy director Franziska Achterberg.
Greenpeace said cash-strapped power utilities are opposing targets to increase the share of renewables and reduce energy consumption, two major strands of the EU’s package of energy and climate policies for 2030 that will be discussed this year by member state governments.
In January, the European Commission proposed an EU-wide target to use renewable sources for 27% of its energy by 2030, which would translate into a 45% use of wind, solar and hydro for electricity generation.
Environmental groups such as Greenpeace say this aim is far too low if Europe to meet a longer-term target to decarbonise its power sector by 2050 and lead by example at UN climate talks.
EU’s top 20 utilities have lost over half a trillion euros in share value since 2008, according to some calculations, as 85 GW of new capacity built since the onset of the financial crisis has become increasingly uneconomic because of sliding wholesale electrcity prices and relatively high gas prices.
A recent boom in renewables generation, many of which is at household and community level and is outside the control of large utilities, has also helped to depress wholesale electricity prices and the profits of traditional utilities.
And even newer coal-fired power plants could become increasingly marginal if the costs of their main raw material rises and the cost of carbon credits and meeting new regulations increases.
Greenpeace said any generators have added to their problems by failing to adapt to policy changes such as deregulation, phase-outs of nuclear energy, support for renewable energy, and stricter regulation on air pollution and carbon emissions.
“Without steering from Europe’s politicians, energy companies that are stuck in the past will probably cling to their failing business models and continue ignoring the promising signs of change, to the detriment of their customers and their shareholders,” it added.
Some power utilities have attacked renewable energy policies even though some companies, such as Iberdrola, E.ON and Enel are estimated to have made a total of €4-5 billion in annual earnings from their renewables businesses, the report added.
The group that lobbies behalf of Europe’s utilities, Eurelectric, includes generators that have diversified strongly in favour of renewables, and others that have a large concentration of gas, coal and nuclear power plants.
Greenpeace said utilities least in favour of tough renewables targets include members of the so-called ‘Magritte Group’ – RWE, E.ON, Enel, Vattenfall, Iberdrola, CEZ, OMV, GDF Suez, Eni and Fortum.