Philip Lowe took up his current appointment as Director-General of the Energy DG in February 2010. He joined the European Commission in 1973 and held a range of senior posts as Chef de Cabinet and Director in the fields of regional development, agriculture, transport and administration. In 1997, he became Director-General of the Development DG, after which in September 2002, he was Director-General of the Competition DG. He read Politics, Philosophy and Economics at St John's College, Oxford and has an MSc from London Business School.
Q1. Europe has made great strides in the renewables space. Can you share some of the successful policies as well as what some of the economic benefits are for countries furthering growth in renewable energy sources?
Phillip Lowe: First and foremost, developing new sources of low-carbon energy is crucial to mitigate global warming and to avoid the massive costs of climate change and pollution. It can also help us reduce our dependence on outside producers and volatile oil and gas prices. In addition, at a time of economic uncertainty, the renewable energy technology industry is one which keeps on growing, providing jobs and developing new technologies.
The EU has supported renewable energy through policy, legislation, funding and research since the 1980s. Our policies have finally started to bear fruit. When we first set indicative national renewable energy targets for 2010, these were not met. The EU thus agreed on stronger rules and set legally binding national targets for each Member State adding up to a share of 20 percent in the EU as a whole. Every Member State has to reach individual targets for the overall share of renewable energy in energy consumption. In addition, in the transport sector, all Member States have to reach the same target of a 10 percent share of renewable energy. Our latest reports show that these are likely to be met and exceeded if Member States fully implement their national renewable energy action plans and if financing instruments are improved.
As renewable technologies have matured, production of renewable energy has risen steadily, and costs have come down. Today European companies dominate the global renewable energy manufacturing sector, employing over 1.5 million people with a turnover of over 50 billion euros. With continued strong growth the sector could provide another million jobs by 2020 and double or even triple its turnover.
Q2. With Europe split over the future of nuclear power post-Fukushima, what does this portend for nuclear as a clean source of energy for the world?
PL: The severity of the Fukushima accident was a shock to us all. It is only natural that it made us take another look at the pros and cons of the production of nuclear power as such and consider what we can do to make sure that an accident of this scale could not happen.
As EU Member States are free to decide what their energy mix will look like, responses to the Fukushima accident differ from one Member State to another. Germany decided to abandon nuclear power by 2022. So far, no other Member State has decided to follow the German nuclear phase-out. In Italy, the government plans to reintroduce nuclear energy were disapproved at the recent referendum. But other EU nuclear energy producers have not changed substantially their plans to build new nuclear power plants.
Also, to my knowledge major global nuclear actors have not announced any significant changes in their policies. China has reconfirmed its ambitious nuclear programme. So it seems that nuclear energy is here to stay. Therefore it is crucial that we do everything in our power to keep the nuclear production in the world safe.
In the EU safety has always been an overriding priority in the nuclear policy. After the Fukushima accident, the EU took immediate action and launched comprehensive EU-wide safety and risk assessment. Moreover, by mid-2012 the Commission intends to present a proposal for the review of the EU nuclear safety legal framework.
International cooperation on nuclear safety which will strengthen the safety culture and emergency preparedness worldwide is more important than ever. The EU considers that all other countries operating nuclear power plants should carry out similar safety and risk assessments as soon as possible in order to strengthen nuclear safety worldwide. Thus we will continue and enhance our cooperation with international players in this field.
Q3. What are some of the strategies employed by the EU to reduce consumer demand/usage of energy, and what energy efficiency lessons can Singapore and the rest of Asia learn from the EU?
PL: There is a vast amount of untapped potential to save energy in the EU. The same is true about the ASEAN countries, as your energy demand will start to grow rapidly in the coming decades. Enhancing energy efficiency would reduce greenhouse gas emissions, ensure the availability of resources, and last but not least, save money for individuals and businesses alike.
Our efforts in this field have taught us that the best way to achieve our energy efficiency goals is to first mobilise public opinion, decision-makers and market operators and then we have to put in place a legal framework which sets clear targets and rules on how to achieve them.
The EU has committed itself to reducing drastically our emissions and achieving the objective to reduce our primary energy demand by 20 percent by 2020. To get there, in March, we tabled an Energy Efficiency Plan which was followed in June by a legislative proposal that translates the key actions of this plan into legally binding measures.
As public spending accounts for a large part of EU GDP and publicly owned or occupied buildings represent about 12 percent by area of the EU building stock, public sector will have an obligation to purchase only energy-efficient buildings, products and services. This will push the market uptake of energy-efficient products and services. Public sector will also have a leading role in the transformation of the existing building stock towards better energy performing buildings.
We work together with industry. Large companies are required to undertake energy audits every three years to become more aware of energy-saving possibilities. Energy efficiency levels of new energy generation capacities have to be monitored. As a basis for a sound planning of efficient heating and cooling infrastructures, including the recovery of waste heat, national heating and cooling plans will be established.
We are also getting good results through minimum energy efficiency requirements for all energy related products and a compulsory energy labelling system for household appliances that we have put in place.
Q4. How would the current economic crisis in EU impact cleantech investment and R&D? Do you think this will affect the 2020 target of reaching a 20 percent share of energy from renewable sources and a 10 percent share of renewable energy specifically in the transport sector?
PL: Indeed, the targets of 20 percent renewable energy for 2020 and a 10 percent share of renewable energy specifically in the transport sector are very ambitious. But I am convinced that the decision to invest massively both in research and technology is a wise one and that we will achieve our targets in 2020 and, what's even more important, these wise investments of today will form the best pillars for future even more ambitious renewables targets for 2050.
It is true that similarly to all economic sectors renewable energy sector was affected by the financial crisis, but on a lesser extent. Investments in new renewable energy production capacity continued, banks kept their confidence in the sector, providing financing for new projects. Our stable regulatory environment, as well as the support measures put in place by national governments has given investors the confidence they need.
We have taken several important steps to stimulate and secure investments in technology and infrastructure projects in the energy sector. In 2009 the European Commission launched the European Energy Programme for Recovery. This programme must provide rapid and efficient solutions to the current economic crisis and help to respond to the new energy challenges. A budget of almost 4 billion euros has been invested to gas and electricity interconnections, offshore wind energy and CO2 capture and storage.
At the end of 2009, the European Commission also launched public-private partnerships with European industry with 7.2 billion euros to be invested from 2011 to 2014 in energy efficient buildings, green cars and other innovative technologies. In 2009 also Europe's Strategic Energy Technology Plan was launched. This plan has clearly identified R&D priorities for low carbon technologies until 2020.
In spring 2011 the European Commission launched a technology platform for biofuels for aviation, together with the main market actors in Europe. This platform aims at introducing third generation biofuels in large amounts into the fast growing demand for aviation fuels. This technology platform should also deliver a strong contribution for renewable fuels in the transport sector.
Q5. Given the EU's energy market integration and regulatory convergence experience, what advice do you have for ASEAN, which is looking to establish an integrated energy market as a long-term goal?
PL: The process of opening and integrating Europe's energy markets started more than 10 years ago. It has been a step-by-step process, accompanied by several legislative packages.
We believe that creating a fully integrated market of 500 million EU consumers where electricity and gas can be traded freely across the borders will help us ensure the security of supply, create good conditions to invest in infrastructure and new technologies, boost the development of renewables. Open and fair competition gives more choice and better services to the consumers and helps keep the prices down. In addition, it will give us more muscle to promote our policies and defend our positions at the negotiations on international arena.
ASEAN countries have 600 million consumers and by opening up their markets they could gain similar benefits.
I believe energy is one of the most complex challenges in the world today. You cannot create a functioning single market if there is no infrastructure to transport electricity and gas across the national borders. You cannot find investments in the infrastructure if market barriers are in the way of fair trade across the borders. You cannot develop solar and wind energy to their full potential if the infrastructure and market rules are not able to take into account the variable nature of the renewables. The costs of renewables will go down making low-carbon energy competitive only when the markets are big enough to allow large-scale use of renewables.
To be able to solve individual energy issues one should always keep in mind the complex picture.
Today, ASEAN countries have very different market models. I think that to integrate these models is a long and time-consuming process which will involve a lot of regulatory work. I also believe that involving all the stakeholders from the beginning, especially when you take technical decisions is of key importance.