BAKGRUNN (fra Kommisjonens rapport av 14.10.2020)

Introduction

The goal of the European Green Deal, Europe’s new growth strategy, is to transform the European Union (EU)into a modern, resource-efficient and competitive economy, which is climate neutral by 2050. The EU’s economy will need to become sustainable, while making the transition just and inclusive for everyone. The Commission’s recent proposal to cut greenhouse gas emissions by at least 55% by 2030 sets Europe on that responsible path. Today, energy production and use account for more than 75% of the EU’s greenhouse gas emissions. The delivery of the EU’s climate goals will require us to rethink our policies for clean energy supply across the economy. For the energy system, this means a steep decarbonisation and an integrated energy system largely based on renewable energy. By 2030 already, the EU renewable electricity production is set to at least double from today’s levels of 32% to around 65% or more and by 2050, more than 80% of electricity will be coming from renewable energy sources.

Achieving these 2030 and 2050 targets requires a major transformation of the energy system. This however depends heavily on uptake of new clean technologies and increased investments in the needed solutions and infrastructure. However, as well as the business models, skills, and changes in behaviour to develop and use them. Industry lies at the heart of this social and economic change. The New Industrial Strategy for Europe gives European industry a central role in the twin green and digital transitions. Considering the EU’s large domestic market, accelerating the transition will help modernise the whole EU economy and increasing the opportunities for the EU’s global clean technologies leadership.

This first annual progress report on competitiveness aims to assess the state of the clean energy technologies and the EU clean energy industry’s competitiveness to see if their development is on track to deliver the green transition and the EU’s long-term climate goals. This competitiveness assessment is also particularly crucial for the economic recovery from the COVID-19 pandemic, as outlined in the ‘Next Generation EU’ communication. Improved competitiveness has the potential to mitigate the short- and medium-term economic and social impact of the crisis, while also addressing the longer-term challenge of the green and digital transitions in a socially fair manner. Both in the context of the crisis, but also in the long run, improved competitiveness can address energy poverty concerns, reducing the cost of energy production and the cost of energy efficiency investments.

It is possible to ascertain the clean energy technology needs for achieving the 2030 and 2050 targets on the basis of the impact assessment referred to in the European Commission’s Climate Target Plan scenarios. In particular, the EU is expected to invest in renewable electricity, notably offshore energy (in particular wind) and solar energy . This large increase in the share of variable renewables also implies an increase in storage and in the ability to use electricity in transport and industry, especially through batteries and hydrogen, and requires major investments in smart grid technologies. On this basis, the present report focuses on the six technologies mentioned above, most of which are at the heart of the EU flagship initiatives aimed at fostering reforms and investments to support a robust recovery based on twin green and digital transition. The remaining clean and low-carbon energy technologies included in the scenarios are analysed in the staff working document with the title ‘Clean Energy Transition – Technologies and Innovations Report’ (CETTIR) that accompanies this report.

For the purpose of this report, competitiveness in the clean energy sector is defined as the capacity to produce and use affordable, reliable and accessible clean energy through clean energy technologies, and compete in energy technology markets, with the overall aim of bringing benefits to the EU economy and people. 

Competitiveness cannot be captured by a single indicator. Therefore, this report proposes a set of widely accepted indicators that may be used for this purpose (see table 1 below) capturing the entire energy system (generation, transmission and consumption) and analysed at three levels (technology, value chain and global market).

Table 1 Grid of indicators to monitor progress in competitiveness

Competitiveness of EU clean energy industry

1. Technology analysis Current situation and outlook

2. Value chain analysis of the energy technology sector

3. Global market analysis

Capacity installed, generation

(today and in 2050)

Turnover

Trade (imports, exports)

Cost / Levelised cost of energy (LCoE)

(today and in 2050)

Gross value added growth

Annual, % change

Global market leaders vs. EU market leaders

(market share)

Public R&I funding

Number of companies in the supply chain, incl. EU market leaders

Resource efficiency and dependence

Private R&I funding

Employment

Real Unit Energy Cost

Patenting trends

Energy intensity / labour

productivity

Level of scientific Publications

Community Production

Annual production values

Analysis of competitiveness of the clean energy sector can be further developed and deepened over time, and future competitiveness reports may focus on different angles. For example by looking in more detail at policies and instruments to support R&I and competitiveness at the Member State level, how these contribute to the Energy Union and the Green Deal objectives, looking at competitiveness at subsector, national or regional level, or by analysing the synergies and trade-offs with environmental or social impacts, in line with the European Green Deal objectives.

Given the lack of data for a wide range of competitiveness indicators, some approximations of a more indirect nature are used (e.g. the level of investment). The Commission calls on Member States and stakeholders to work together in the context of the National Energy and Climate Plans (NECPs) and the Strategic Energy Technology plan to continue developing a common approach to assessing and boosting the competitiveness of the Energy Union. This is also important for the national recovery and resilience plans that will be prepared under the Recovery and Resilience Facility.