EU Scenarios for a Sustainable RES Strategy - The Sustainability of Renewable Energy in Europe - page 114

Chapter 5
EU Scenarios for a Sustainable RES Strategy

5.1 Introduction

The development of renewable energy source (RES) fits in a global context of in-
creasing attention to climate change and energy security issues. Recent analyses of
energy scenarios (European Commission 2009 ; European Commission 2014 ; IEA
2014a ) show the possibility for the global energy system of a transition on the long
term towards a model of production and consumption increasingly based on RES.
In this chapter, we propose our RES development scenario for the EU in order to
achieve RES amount by 2030 at lower costs than those expected by the European
Commission. Consistent with economic theory, our results suggest that EU policy
makers should follow purely a logic of cost minimization for the EU as a whole, ac-
cording to which EU countries with lower prices (levelized cost of energy (LCOE) 1 )
of production should produce more and vice versa. Indeed, it is conceivable that this
could spur some opportunistic behavior: countries with higher costs would try to
reduce their allocation but this will increase the cost for the whole EU; so they can
try to negotiate some compensation. The decoupling between RES and cost share at
the country level leads us to strongly affirm that cooperation among EU countries is
essential to achieve the sustainable development of RES. To this aim, it is appropri-
ate to devise a radically new energy and environmental policy. Given that the objec-
tives are challenging at a global level, even EU policies should be equally challeng-
ing. In other words, it is time to conceive the EU as a single “Nation” facing the
environmental issue and indeed, it is necessary to have a unique European policy
supporting RES production. This implies to overcome the fragmentation of 28 local
policies. According to most of the literature, we advocate price driven instruments
rather than quantity driven instruments to support RES development. Such policies
leave each country free to choose the suitable mix of RES. It should be kept in mind
that some RES are disadvantageous compared to other RES, given the differences in
the natural endowments of countries. This implies that the RES should be produced

1 See Chap. 3, Sect. 3.3 of this topic.