“We need a clear political target”
new energy: You have been in office as EWEA’s CEO since April. When you we’re first introduced as CEO you said “I want to turn the crisis facing the wind industry today into an opportunity”. With six months under your belt, where does the industry stand right now?
Thomas Becker: It would be very difficult and probably untrue to say that we have passed the worst point of the crisis already. I think however, that there are small signs on the horizon that the industry is improving. I know when you are working at companies experiencing firing rounds every day that must sound strange coming from someone who works in Brussels. But I think my perspective is a little bit broader from my position.
Seen from that perspective there are some signs that things are improving again. It has definitely come to the attention of the political level, both in Germany and in other major countries in Europe, that the wind industry is a vivid and strong industrial branch with work and export opportunities. And it is a branch, which provides energy security and limits the emission of CO2. At the height of the crisis that was not clear to the broader part of the political lever in Brussels as well as in national governments. Now we see some small tendencies that the political level is afraid of jeopardizing this industry just to save a few bucks here and now. I get the impression that there are some interesting developments in ordering turbines especially coming from emerging markets. Let’s say, we’re still in a deep crisis and are facing tough challenges, not least political instability. But we are still seeing some small positive signs, which are not all my achievement!
ne: After the general elections in Germany two things seem certain. Angela Merkel is going to continue as Germany’s chancellor and there will definitely be changes to the current Renewable Energy Act. How much will the German situation affect European politics and what can we expect on that front?
Becker: In the election campaign it was difficult for Angela Merkel to go against her own party. Listening to the ongoing debate in Germany you sometimes get the impression that renewable energy has caused economic crisis in Europe, that support schemes for renewable energies are the sole reasons behind it. That’s a strange thing to see. Angela Merkel is one of the politicians able to see through all this and who is not of that opinion. She is someone to say, if we want renewable energy and stop being dependent on coal and nuclear any longer, then we have to create a renewable energy industry. It’s a political goal.. The EU is sending 1.4 billion Euros net out of the EU every single day in order to import fossil fuels and maintain our demand for energy. For that reason alone the political level should be saying ‘we want wind turbines’. I’m convinced that the new German coalition government, irrespective of who will partner the Christian democrats, will not jeopardize an industry with 250 000 direct workplaces. If you multiply those jobs by the factor ten, you get 2.5 million employees who are indirectly dependent on the wind industry. In other words more than 1.5 percent of the European workforce is employed in our industry. I think there will be minor adjustments but overall the change towards renewable energies is not at risk.
ne: Across Europe there are wind energy projects – onshore and offshore – that are being put on hold due to financial uncertainty. Another reason why EWEA Offshore 2013 takes place in Frankfurt?
Becker: Frankfurt was chosen long time ago. But it fits well in the sense, that access to capital in the wind sector is becoming more and more difficult because of some political uncertainty. The higher the level of uncertainty, the higher the degree of caution among investors. Some of the larger insurance companies in the United Kingdom and Switzerland are pondering plans to insure against political uncertainty in Europe, which I find quite interesting. The lack of financing is not down to a lack of capital in the financial markets, it’s a reluctance towards financing caused by political uncertainty. If you look at Spain for instance you see the government implementing retroactive measures. That is outrageous. Imagine the government would go to the car industry, telling them they are not supported any longer and additionally asking them to repay the subsidies they have received in the last five years. That would lead to a revolution probably.
ne: Compared to the fossil and nuclear industry, the renewables seem like an easy target…
Becker: Just look at the European banks during the economic crisis, a lot of them had to be bailed out with taxpayer’s money. It’s hard to imagine that someone is going to ask them to pay that money back now. Sometimes the EU or the national governments react to certain things that are happening in the market. If they want renewable energy they need to act now and create a framework in which renewables can develop. At a certain stage renewable energy will compete with conventional energies, especially if you have a price on carbon emissions. Onshore wind energy is already becoming competitive with fossil fuels, and is cheaper than new nuclear.
ne: Recently EWEA signed an open letter to the EU and national energy ministers, calling for binding renewable targets for 2030. Has there been any answer yet and what are your expectations?
Becker: Unfortunately the British government has the idea of meeting their ambitious CO2 targets by relying mostly on nuclear energy. Therefore they’re strongly opposed to combined CO2, renewables and energy efficiency targets such as those we had for 2020. They argue CO2 targets will suffice and market forces will provide the necessary adjustments, enabling them to sneak in nuclear power again. They have managed to assemble a group of countries and companies to pray that message, creating a strong front in Brussels that shares this viewpoint. We made this joint announcement in order to counter this movement. The question is: What has been driving the renewable energies in Europe so far? Has it been the CO2 targets or the Emission Trading System? No. Has it been energy efficiency? No. Has it been the target of meeting a certain renewables percentage by 2020? Yes. According to different member countries and investors, the sole thing that has the most influence on the development of renewable energy during the last five years has been the clear political message to have 20 percent renewables in the energy mix by 2020. This message gives the investors security and confidence to react on. For that reason we need a clear political target, endorsed by Brussels and national governments, saying by 2030 we will be at a certain ambitious percentage of renewables in the energy mix. Then the whole investor side will start working.
ne: What are the chances for and fast agreement on those targets?
Becker: I hope that the president of the EU commission, José Manuel Barroso, is willing to take a lead on that, since the EU already invested a lot of political capital in the 2020 targets. He must promote doing the same thing for the 2030 targets, especially as he has plenty to show for it. The implementation of the 2020 targets has definitely paid dividends. Moreover it would show real determination from the EU, something that has been lacking recently. My real worry is, that because of the Euro crisis and the British skepticism, the power is shifting away from the commission and back to the EU Council of Ministers. But I still hope that the European leaders by March 2014 will sit down and say: This one we won’t let go. The technical implementation might take a little bit longer, but the principal decision will hopefully be taken in March.
ne: At the Riffgat project Germany and the Netherlands had a well-documented dispute over the course of the border between their respective countries. Is there too much competition and not enough collaboration between the EU member states?
Becker: Energy is such a vital and interconnected part of modern life that it should definitely feature more prominently in the EU policy and treaties. I think it’s obvious that the energy sector should be handled by a common voice in the EU. Since there is no integrated supergrid in Europe the ‘energy waste’ we have is quite substantial. A supergrid would make electricity prices cheaper. That notion definitely has some support among the member countries and within the EU commission. You could take the electricity from where it is produced at a given hour to where it is needed at a given hour. And you could bring it there quickly, thereby reducing the waste factor and potentially save large amounts of money. Moreover, it would be a huge signal towards the rest of the world having put in place such a transnational system. Everybody would probably come and copy us. It’s a shame really that the political level hasn’t taken the decision to give up parts of the national sovereignty in that respect. The current setup doesn’t really correspond to Europe’s actual needs.
ne: 2013 is drawing to a close. What are the challenges and opportunities for the industry in 2014?
Becker: From a Brussels perspective it’s definitely the 2030 process and what comes out of it. What will be the new directives and regulations? That’s probably the single most important challenge for the upcoming year. Personally, I will try to point out that nuclear and fossil energy is more subsidized than renewables and wind in particular. It’s a myth that wind can only prevail if it is subsidized by taxpayer’s money. If our competitors like coal and nuclear were not so highly subsidized – directly and indirectly – we would have no problem whatsoever with competing on direct prices. That is a case I will strongly try to make.