Europe’s electricity regime: restoration or thorough transition

Abstract

Concerns about climate change, diminishing social acceptance of traditional fuels, and technological innovations have led several countries to pursue energy transition strategies, typically by massive diffusion of renewable electricity supplies. The German ‘Energiewende’ has been successful so far in terms of deploying renewable power, mainly by applying particular feed-in tariffs, and by bundling public, academic, industrial and political support. So far though, only few EU member states proceed with a similar transition. In March 2014 CEOs of Europe’s major energy companies publicly opposed a fast and thorough transformation of electricity supplies to become fully renewable. In April 2014 the European Commission published new state aid guidelines, generally mandating renewable energy support mechanisms (premiums, tenders) of lesser performance than regularly adjusted, specific feed-in tariffs. The new guidelines are likely to be pernicious for the fast deployment of renewable electricity supplies. In light of these challenges, this position paper highlights two implications of power sector transitions. First, the engineering-economics theory of power generation systems needs fundamental revision, mainly since a growing share of power sources no longer function on command. Second, and based on the experience in Germany, the paper sketches out a strategy for a thorough transition of the power sector, which, in the end, also entails normative judgements. Deep changes in energy systems and associated ways of living require societal consensus building based on ethical considerations.

Keywords

• electricity industry transition;
• renewable electricity support;
• Energiewende;
• polluter pays principle;
• EU energy state aid guidelines