The EU 2030 Renewable Energy Vision - Can It Be More Ambitious?

Abstract

Setting a renewable energy (RE) target necessitates a comprehensive assessment of its impacts on the energy system and at the macroeconomic level in the European Union (EU). The decision of the EU about the renewable energy target is based on such impact assessments. We postulate that the EU could be more ambitious with respect to the RE target without endangering economic growth in the EU. We review fifteen impact assessment studies of the EU’s energy transition in this paper. We classify and interpret the modelling used in these studies and their results, apply descriptive statistics and analysis, and show how model features and input parameters influence the impacts of different shares of renewable energies (RE) on the energy system and the wider economy. The variety of input factors and modelling approaches used explain the diverging results of the assessments. There are two crucial criteria to measure the impact: First, gross domestic product (GDP), which is the best indicator of overall change. GDP considers fossil fuel imports, prices, domestic additional generation and investments, and shows the resulting impacts of changes in these factors on welfare in monetary units. Second, energy system costs indicate what it costs to achieve a target and how efficiently this is done. We conclude that the European Union could feasibly increase its share of renewables without any negative impact on the economy, especially in the light of recent cost developments.

Keywords: Renewables, Economic impacts, Energy policy, Impact assessment, Energy transition

JEL Classification: O11, E69